By Kevin McCallum
THE PRESS DEMOCRAT
Santa Rosa voters will get to decide this fall whether they want to raise taxes to bail out their cash-strapped city or require its leaders to make further cuts to balance the budget.
In a unanimous vote, the City Council agreed to place a ¼-cent sales tax on the Nov. 2 ballot, a measure expected to raise $6 million a year.
Despite concerns about the lack of recent pay concessions from employees, the regressive nature of sale taxes and the additional burden on taxpayers, the council agreed that the measure was the only option that had a good chance of winning passage by the voters in the fall.
“We are holding our nose to support a sales tax,” Mayor Susan Gorin said.
The vote was the second time in the same evening that a previously divided council came together to support an item unanimously. The council also approved a new city manager on a 7-0 vote.
Vice-mayor Gary Wysocky had been vocal about his concerns about asking voters to shoulder more taxes when the proposal would raise more funds than the city needed. The current budget calls for bridging the $3.8 million gap in the $109 million general fund spending plan with $1.3 million in additional revenue such as a sales tax and $2.5 million from employee concessions. He also questioned why more employee groups have yet to agree to concessions.
“We need a shared sacrifice,” he said.
But he grudgingly agreed to support the measure on the condition that some of the more unpopular cuts to city services would be restored if it passed.
“It pains me to take this to ballot with no other choices, but I will let the people decide,” Wysocky said. “I know I don’t have the votes, and we need to balance the budget.”
He pledged to make sure that if the measure passes, the city would restore funding for homeless shelters and keep the city pools and senior centers open.
“We need to show some leadership,” he said.
Prior to the council debate, the members heard from the city’s departing chief financial officer, David Heath. He told them that in the past two years the city general fund had shrunk by about $30 million and 180 positions, may of them unfilled.
Sales tax revenues have been sliding for 15 consecutive quarters, and property taxes are taking a beating from lower property values, he said.
On the concession front, Heath noted that the city is instituting a two-tiered pension system to save money, and some employees are paying a greater percentage of their health insurance premiums and have gone years without salary increases.
Winning salary cuts from employee groups has been challenging, but progress is being made, Heath said.
“It’s been a long slog,” he said. “We’re at the table right now, and people slowly but surely are agreeing to take reductions.”
Several speakers expressed concern about the regressive nature of the sales tax.
“I think this tax is going to hit the people that can least afford it,” said Hans Dippel, a candidate for City Council.
Councilman John Sawyer reminded citizens that the council wasn’t imposing a tax, but giving the voters an option for avoiding more severe cuts to city services.
“We are not taxing people, we are placing it on the ballot. That’s what democracy is all about,” Sawyer said.
But Gorin made a passionate plea that people understand the city’s financial situation. She recounted how the city was already facing significant budget challenges two years ago, but was dissuaded from putting the sales tax measure on the ballot that year at the request of the advocates for the SMART commuter rail, who didn’t want it to compete with their own tax measure.
“We gulped because we had already been through two years of budget cutting,” Gorin said.
The city stepped aside, but can’t afford to this time, Gorin said. If approved by the voters, Santa Rosa’s sales tax would rise to 9.5 percent. The ¼-cent levy would expire after eight years. Passage requires a simple majority approval from voters.
“To deal with the economic disaster that we are facing right now, we need it,” Gorin said.