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Santa Rosa voters face November sales tax decision

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.





19 Responses to “Santa Rosa voters face November sales tax decision”

  1. Jerry D says:

    LOL – the City Council has spent like it wasn’t their money (and it wasn’t), outrageous salaries, paying unions big contracts (to win votes) and they have put us the taxpaying citizens out to dry. Now they want us to bail them out – so they can go back to the status qoe. No responsibility with OUR MONEY!

    Just think back – the 1/4 cent to pay for the rail system. Well WHERE IS IT?

    VOTE NO ON ANY NEW TAXES

  2. Average Joe says:

    Bad link Scott, all those employees work for San Francisco City when I looked into it. I believe the article but, just not the averages of who is getting the $$. Did you notice they brought back the retired Finance Director? I would guess to spike his pay in PERS again or just to take care of their buddy.

    Scott P says:
    August 3, 2010 at 12:03 am

    In 2008 Calendar year, the city of Santa Rosa had 304 employees that made more than $100,000.

    http://www.sfgate.com/cgi-bin/article.cgi?f=/g/a/2009/02/03/santarosapay2008.DTL

    The top 100 employees pay range from $160,000 – $260,000. 83 of 100 are in the Police or Fire Department.

    The city needs this tax to pay for their exhorbitant salaries and guaranteed pensions.

    Don’t be stupid. Just say no.

  3. Scott P says:

    In 2008 Calendar year, the city of Santa Rosa had 304 employees that made more than $100,000.

    http://www.sfgate.com/cgi-bin/article.cgi?f=/g/a/2009/02/03/santarosapay2008.DTL

    The top 100 employees pay range from $160,000 – $260,000. 83 of 100 are in the Police or Fire Department.

    The city needs this tax to pay for their exhorbitant salaries and guaranteed pensions.

    Don’t be stupid. Just say no.

  4. Joanna Schaefer says:

    This city has spent far too long failing to exercise fiscal responsibility. Planning for the future is a necessity. This city council needs to get its budget in order before it asks the citizens to help make their job easier. There is still waste that needs to be cut from the budget. I made the decision months ago that I could no longer sit back and watch the city fall into ruin. That is why I am running for city council.

  5. Jamie says:

    The decision is easy. Just say no.

  6. Jay says:

    I own a small corporation and pay zero income taxes (income to the corporation) – As do most corporations.

    Why? Because they’re run at a loss and it is incredibly difficult to make an “income” in a corporation.

    Taxes that evil corporations pay;

    1) Payroll tax (it is an onerous level of taxation) but employees don’t realize it because they don’t pay it.

    2) SSI. Did you know that companies have to match? of course not, most people are too busy worried about corps not paying income tax.

    3) County property tax. Yup. Buy a copier, and the county taxes you, separate from sales tax.

    4) City tax. Yup. the more revenue (important word there) you have, the more you pay. (that’s not even income related, its revenue related)

    5) EDD… Don’t get me started.

    6) UI, training tax, etc…

    The next time someone wants to say corporations pay no taxes, you need to understand this; corporations pay MOST of what you use.

    I suppose that if you just paid attention to “income tax” on a corporation everyone could continue to wallow in the ignorance of where your roads, services, parks, etc., come from.

    Oh, and they create jobs too. And for the record, 99.999999999999999999% of corporations aren’t leaking oil in the gulf – they’re regular people who usually love what they do and are respectful to their environment and fellow man.

  7. trickle down poverty says:

    Ask John Kerry, Tim Gietner, and Charlie Rangle about their taxes, then ask yourself why some on this site only focus on corporations-the boogyman of liberals.

  8. Lyn says:

    >>It wrong to pass a sales tax increase when the city mismanages our money.<<

    Agree. Better to change the current occupants of city hall. But the people have to be paying attention for that to happen. So far, they aren't.

  9. Richard Canini says:

    TARP, troubled [toxic] asset relief program, is a federal government program that purchases troubled real estate.

    The City of Santa Rosa lost more than a million dollars on its toxic real estate: the AT&T building.

    Why should the federal government purchases Santa Rosa’s toxic assets when the city council can coerce its citizens to tax themselves?

    It wrong to pass a sales tax increase when the city mismanages our money.

  10. Lyn says:

    At speech I attended about 18 months ago, Mayor Gorin, to her credit, acknowledged the city had signed contracts with public employee unions the city could not afford.

    Yet, here we are in the midst of a budget crisis and the city’s effort correct the problem has been at best half-hearted. A couple of scheduled raised were deferred. Future pensions have been reduced, slightly, but remain unsustainable in anything other than a fairyland economy.

    As NY Times columnist Thomas Friedman said recently, “Being a politician for the last 60 years has been easy; it’s been mostly about giving things to people. That’s changed. Going forward it will be about taking things away.”

    It’s long past time for reality to intrude on city hall.

  11. Zuma says:

    Santa Rosa has more than enough revenue!

    Tax and Spend is not the answer!

    How many city employees were paid in salary and bennies over 75,000 last year?

  12. Todd johnson says:

    Now we can only post if we support higher taxes ….good job comrade

  13. Richard Canini says:

    FROM MOTHER JONES:
    “Exxon’s Income Tax: $0 [UPDATED]
    — By Adam Weinstein
    [UPDATE: ExxonMobil's spokesman contacted Mother Jones to dispute this story, offering additional information concerning its US income tax liabilities for 2009. That information had been added to the end of this post.]

    So, good news and bad news. The good news is, oil megacorporation ExxonMobil had such a profitable year in 2009, it contributed $15 billion to the world’s tax coffers.

    The bad news: Not a cent of that went to the IRS.

    ExxonMobil, the world’s second-largest company, says it actually paid out 47 percent of its profits in taxes, but not to the good ol’ capitalist US of A. Says Forbes in a report on all the taxes of the US’s top 25 firms (with added emphasis):”

    Why should the federal government tax corporation when cities can convince their citizens to tax themselves?

    It is wrong to increase the sales tax while wealthy corporations pay no tax at all.

  14. Dan says:

    We have a city that for decades has been unable or unwilling to exercise the fiscal discipline necessary to keep it’s spending under control. The typical response by city officials is to seek additional funds rather than curbing their unending thirst for spending. It’s pretty obvious the city and our elected officials lack the ability to bring spending in line with available revenues. Wouldn’t it be great if the rest of us could simply tax our neighbors every time we overspent our budget? I say we tell Mayor Gorin and the rest of the council “no more taxes” until they have demonstrated an ability to exercise the same level of financial restraint the rest of us do on a daily basis.

  15. Lyn says:

    >>ExxonMobil paid no federal income tax in 2009.<<

    That's not what an Exxon rep says. From Mother Jones no less:

    "It is incorrect to say that ExxonMobil did not pay any U.S. income tax in 2009. In fact, we expect a significant U.S. federal income tax liability for 2009, although our tax return will not be filed until later this year [as of April]. Our tax installments overpaid our 2008 U.S. federal income taxes and we used that excess in part to pay our 2009 estimated taxes. The amount stated in our 10-K filing with the SEC, which Chris [Christopher Helman, who originally reported on this story for Forbes] told me he based his story on, includes expenses or credits recorded during 2009, and can represent items from previous years or expectations for subsequent years. It is not our actual tax bill."

    Exxon declines to break out US income taxes by individual year, but they claim to have paid $44 billion to the IRS between 2005-2009. Plus, of course add many billions more in other taxes.

    This story has Sherry Sherrod written all over it.

  16. Richard Canini says:

    ExxonMobil paid no federal income tax in 2009. (Updated)

    exxon-mobilLast week, Forbes magazine published what the top U.S. corporations paid in taxes last year. “Most egregious,” Forbes notes, is General Electric, which “generated $10.3 billion in pretax income, but ended up owing nothing to Uncle Sam. In fact, it recorded a tax benefit of $1.1 billion.” Big Oil giant Exxon Mobil, which last year reported a record $45.2 billion profit, paid the most taxes of any corporation, but none of it went to the IRS:

    Exxon tries to limit the tax pain with the help of 20 wholly owned subsidiaries domiciled in the Bahamas, Bermuda and the Cayman Islands that (legally) shelter the cash flow from operations in the likes of Angola, Azerbaijan and Abu Dhabi. No wonder that of $15 billion in income taxes last year, Exxon paid none of it to Uncle Sam, and has tens of billions in earnings permanently reinvested overseas.

    Why should the federal government tax corporation when cities can convince their citizens to tax themselves?

  17. Richard Canini says:

    (Reuters) – Most U.S. and foreign corporations doing business in the United States avoid paying any federal income taxes, despite trillions of dollars worth of sales, a government study released on Tuesday said.

    Why should the federal government tax corporation when cities can convince their citizens to tax themselves?

  18. Lyn says:

    While the subject of Exxon’s taxes is far afield from the topic at hand, the idea that they paid no incomes taxes struck me as unlikely.

    According to Exxon public documents, in 2009 they paid $15 billion in income taxes, $26 billion in sales-based taxes, and $34 billion in other taxes and duties. Now, Exxon is primarily a foreign company. Most of its business operations are overseas, so I imagine that’s where most of its taxes are paid. Seems reasonable to me.

    In any case, the implication that Exxon earned $19 billion and paid no taxes is false.

    Now, can we return to the subject?

  19. Richard Canini says:

    Bernie Sanders,Independent U.S. Senator from Vermont wrote: “In 2009, Exxon Mobil, the most profitable corporation in history made $19 billion in profits and not only paid no federal income tax — they actually received a $156 million refund from the government.”

    Where are our senators on this issue? Are they with us or the corporations?

    Why should the federal government tax corporation when cities can convince their citizens to tax themselves?

    Passing a sales tax increase will reduce the need to tax wealthy corporations. It is wrong to increase the sales tax while wealthy corporations pay not tax at all.