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Petaluma weighs sales, hotel tax hikes

By LORI A. CARTER
THE PRESS DEMOCRAT

Like many Sonoma County cities over the past several years, Petaluma has dramatically cut spending as revenues slid and costs climbed.

City workers make do with reduced supplies, older equipment and fewer coworkers. They have taken pay cuts, given up raises and seen entire departments outsourced.

Residents have watched the city’s pothole-riddled roads further deteriorate, broken street lights go unrepaired, parks grow weedy, maintenance put off. Specialized units in the police department, like DARE and school resource officers, have been pulled back to patrol functions.

City Councilwoman Tiffany Renee said the time has come to stop simply cutting, cutting, cutting.

“It’s a matter of seeing if people want to continue with the status quo of budget cuts and rundown infrastructure or if we want to bootstrap ourselves up and take care of ourselves,” she said.

Renee supports asking Petaluma voters to approve a sales-tax measure on the November ballot.

Similarly, Councilwoman Teresa Barrett supports increasing the city’s transient-occupancy tax.

Either tax could have a difficult time passing, some political observers say, given the belt-tightening everyday citizens also have had to endure and at least two statewide tax hikes expected to be on the ballot.

The council will discuss the tax issues at a special meeting June 25 at City Hall. The deadline is Aug. 10 to put an item on the November ballot.

“We’ve tried very hard to insulate the community from the cuts in services and to do our best to make ends meet,” Renee said. “We’re not able to insulate the community as much anymore. We have to go to the community and let them know what’s on the horizon in terms of the impact.”

Petaluma’s sales tax is 8 percent, among the lowest in the county with Cloverdale and Windsor.

Sonoma voters just approved a half-percent increase to 8.5 percent. Santa Rosa, Rohnert Park and Cotati are all at 8.5 percent.

Sebastopol’s tax is 8.25 percent, but voters will be asked in November to increase that to 8.75 percent. Healdsburg will ask its residents for a half-cent increase, to 8.5 percent.

Renee said the city needs to look at a minimum of a half-percent tax increase — but she said she may suggest a 1 percent tax to make up for the loss of redevelopment funds to the state.

A 1 percent tax increase would add another $1 to a $100 purchase, or $300 on a $30,000 purchase.

Councilman Mike Healy and Mayor David Glass said they aren’t completely sold on the idea of a sales-tax increase, especially if there is organized opposition as the lodging industry has promised with a hotel tax increase. Councilman Mike Harris, the board’s only Republican, said he won’t support raising taxes.

Barrett said a TOT increase, a nightly tax on lodgers at hotels, motels, inns and campgrounds, must be part of the discussion.

A two-percentage point increase to the TOT would bring in about $200,000 a year. A sales-tax increase could bring in more than $2 million.

“Some on the council could be dragged along if we reach closure with the bargaining units on a second-tier pension,” Healy said. “If we can’t do that, I don’t think it would stand a snowball’s chance.”

Bargaining continues with all of the city’s employee unions, although no agreements have been reached on concessions to existing pay and benefits or longer-term savings on pensions.

Brian Sobel, a political consultant and a former Petaluma council member, said voters may support a quarter-cent tax with an expiration date — but only with a promise of how the money will be spent.

“The key to getting a sales tax passed is to carefully articulate the needs and how the money is going to be expended,” he said. “But I’d recommend anyone wanting to do a sales tax increase poll Petaluma.

“There’s a tolerance level for everything. You may find a quarter-cent is fine but a half-cent is a deal-killer.”





6 Responses to “Petaluma weighs sales, hotel tax hikes”

  1. Petaluma Dave says:

    Petaluma like so many other cities in California cannot manage the tax monies they have been given.

    Instead of spending on street repairs and the maintenance of public property, they has spent big time on city employee salaries, benefits and pensions. This is particularly true with police and fire pensions and salaries.

    Just take a look at the percentage of the city budget that goes toward personnel costs to see what I am talking about.

    Inspite of what gunboat Renee and councilman Barrett want, lower taxes, not tax increases will help Petaluma turn the local economy around.

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  2. BigDogatPlay says:

    I was in the greater Phoenix Arizona area this past week on business. It is a major metropolitan area with all the problems and issues that are normally associated with that a vast metro area. The streets are in nearly immaculate condition; from the freeways down to the smallest residential areas. The state sales tax is 6.6%, TOT is much lower than here, and government is run lean without endless layers of bureaucracy as we find here in Petaluma, Sonoma County and across California.

    I came home to Petaluma and just driving up Sonoma Mountain Parkway my teeth were chattering from all the haphazard broken and patched asphalt.

    As to David Keller’s opinion…. if you personally feel you are not taxed enough, please feel free to write a check and pay more. Also please feel free to stop being involved with so called public interest advocacy groups that actively engage in costly (to the city) litigation over every new proposal that comes down the road. You, sir, are not only part of the problem but your call to simply raise taxes more is merely a paean to yet bigger, more wasteful government that delivers less service while consuming more treasure.

    To the esteemed city council…. open the budget to full sunshine, let the public see where the money is actually being spent, and for what. Appoint a blue ribbon commission of real Petaluma residents, not yayhoos with an agenda (such as Messrs. Keller, Maguire and their ilk) to make honest recommendations on honest, meaningful cuts.

    If you choose, however, to follow Mr. Keller’s advice all I can say is go ahead and see what happens at the next election.

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  3. Over Easy says:

    In reality there have been VERY few cuts to the city’s personnel budget. The overall expenditure for city manpower, fully burdened, has decreased less than 2%! Virtually nothing!

    These two Council Persons quip these STUPID sound bites as if they are facts. IT’S A JOKE! It is time for leadership, Vote these two out!

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  4. Kim says:

    Thank You Jim! You have an AMEN here! These people are typical tax and spend progressives.

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  5. Jim says:

    Yeah, governments ALWAYS need more revenue. As schools aggressively seek to increase enrollment in year-round “free” meals for everyone, as Petaluma Police officers continue to make $90,000+ (not including massive pensions and benefits), as the counsel spends millions on legal fees to fight new business while AT THE SAME TIME proposing to increase sales tax because collections are too low, as they continue to spend more than they take in on unnecessary expenses like redundant departments staffed with unnecessary employees….

    yep, the ONLY answer is MORE “revenue”.

    Too bad the voters keep putting idiots in the city government. If Petaluma has the lowest sales tax in the county, wouldn’t you think that people would shop there instead of Rohnert Park to save money? Luckily the elected dopes blocked Target for over a decade, are blocking Freidmans, etc. Imagine how much sales tax revenue would be generated if there was actually somewhere to shop in Petaluma. But hey, the counsel knows what they’re doing. Tiffany Ranee saved the city from terrorist attacks by keeping out the WWII boat (not to mention keeping out the people who would have spent money in downtown when they came to see it). This is the kind of genius who think more revenue is the answer.

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  6. David Keller says:

    I believe that an increase in our local sales tax and TOT (bed tax) are both warranted and necessary. We want and need our local government services, and we’ll have to pay for them equitably. No one is coming to our rescue except ourselves.

    As a country, we’ve defunded public services for 40 years. Prop 13 brought important property taxes controls, but set up unfair taxes: corporate and long-term property owners avoid paying equally for services received vs. new owners. As a result of this and other revenue constraints, the services that made California great have suffered: our public universities and schools, parks, research, environment, transportation systems and roads, health care.

    Since governments couldn’t rely on property taxes as much, they’ve used sales taxes (a regressive tax) and income taxes to make up the differences. That has taken a hit as well in the past few years of depression.

    New sales tax revenues from Regency and Deer Creek malls will cost dearly: a large percentage of “new sales” come from our City’s existing businesses, with store closures and bankruptcies. The city’s new costs for the malls – additional police, fire and emergency medical services, road maintenance – will eat up most or all of the “new” sales tax revenues. The City won’t get its former share of redevelopment property taxes either.

    The new malls are not a budget cure. Nor are pension and personnel cuts enough to balance a budget and provide for meaningful city services. The last time I looked, no hotels advertise their total price with all the local fees and taxes added in, so it’s unclear why local hotels would oppose a bed tax that could be used for tourism promotion. There’s no functional competitive advantage to having or not having a TOT tax, except for the good consequences of providing better local services for their guests.

    The knee-jerk “no new taxes” true believers don’t have a credible plan other than to defund government, destroy public services and public institutions, kill unions and privatize everything. Like ‘trickle-down economics,’ it doesn’t work.

    Petaluma needs more revenue: a 1/2 to 1% sales tax and TOT increases are the right thing to do.

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