Road repairs will benefit from Petaluma’s added sale tax dollars. (CRISSY PASCUAL/ARGUS-COURIER STAFF)

Your sales tax dollars at work

Town’s 9.5% tax charge is among the many highest within the county, and can generate $13.6 million

For the primary time in a few years, Petalumans won’t be required to conform to a gross sales tax enhance on ballots subsequent month. That is very uncommon.

Over the previous twenty years, a number of county and metropolis gross sales tax measures have been proposed to fund an more and more various vary of public providers in Sonoma County. Most have handed and the vast majority of voters appear content material to spend a little bit extra on the issues they purchase if it helps maintain some authorities program.

However these extra home gross sales taxes are starkly regressive, widening societal inequalities because the burden of paying them falls disproportionately on lower-income households who spend a a lot bigger share of their earnings on taxable items. Wealthier households spend the majority of their earnings on non-taxable providers.

Nevertheless, with California’s outdated tax components for financing native authorities providers now not sustainable, the development of elevated gross sales tax motion reveals no signal of abating. When you do not fail to qualify as a consequence of an absence of qualifying signatures, a quarter-cent poll to fund native childcare providers might be in your poll subsequent week.

California imposes a base gross sales tax of seven.25% on retailers for the privilege of promoting bodily property, with most income going to the state’s basic fund. 1 % of the gross sales tax is allotted to amassing cities of their jurisdictions. Traditionally, cities have principally relied on primary property and gross sales tax provisions to fund municipal providers.

To counteract the growing prices of public service, this tax construction stimulated cities to draw new retail growth and thus enhance gross sales tax income. Petaluma’s approval of Goal and Friedman’s dwelling enchancment malls, whereas serving to native customers scale back their must journey out of city to make purchases, additionally bolstered its tax base to fund metropolis providers.

Like cities, counties have discovered it more and more tough to fund public providers. Consequently, Sonoma County has enacted a number of new gross sales tax additions lately.

To broaden Freeway 101, voters in 2004 authorised a quarter-cent gross sales tax and it labored. The ultimate a part of the freeway enlargement undertaking by way of Central Petaluma was formally devoted two months in the past.

In 2006, county voters enthusiastically renewed a quarter-cent gross sales tax measure designed to completely protect Sonoma County farming and open house. Subsequent grants to the Open House District secured the acquisition and enlargement of a number of provincial parks, together with Helen Putnam and Tolay within the Southern District.

In 2008, because the Nice Recession started, county voters authorised a quarter-cent tax to construct and function a SMART passenger rail service that was utilized by 3,000 passengers daily of the week till the pandemic halved that quantity. The present tax expires in 7 years, however with voters in 2020 overwhelmingly rejecting the proposed tax renewal, the company has an enormous leap in overcoming voter resistance to a tax extension. The development of a second, long-delayed practice station in Petaluma could assist in that effort.

In 2016, a 1/8-cent gross sales tax was authorised to broaden opening hours and refurbish amenities at county libraries, together with Petaluma. Two years later, voters authorised one other 1/8-cent tax to spice up county and metropolis parks. Petaluma’s $850,000 allocation for this fiscal 12 months is used to enhance pedestrian and bike paths, construct baseball fields, and enhance park upkeep.

In 2020, county voters handed the renewal of the quarter-year highway tax, which, along with repairing county roads, has dedicated $630,000 this 12 months to Petaluma for its avenue upkeep tasks. Voters that 12 months additionally authorised a brand new quarter-cent tax to broaden psychological well being providers and scale back homelessness within the county. Of that tax income, Petaluma County has given almost half one million {dollars} this 12 months to fund the brand new SAFE Cell Disaster Response Group.

2020 was additionally the 12 months Ptaluma voters had been requested to make an essential determination. Being the one full-service metropolis in Sonoma County with none devoted extra gross sales tax, it was on the level of monetary meltdown.

Its streets had been routinely rated the worst of any metropolis within the Bay Space and parks and different public amenities had been in disarray. Town had lowered a 3rd of its workforce after the Nice Recession principally in public security. Whereas requires service have skyrocketed, Petaluma’s workers scarcity has made 911 response time for police, hearth and medical calls far slower than business requirements.

Moreover, the town was going through an enormous price range shortfall of US$6.4 million that will quickly require extra drastic cuts.

Traditionally, Petaluma voters have been immune to any tax measures. However with the bottom tax charge of any metropolis within the prefecture, one thing needed to be achieved.

In a historic election, a big majority of voters authorised a general-purpose gross sales tax of 1 cent, making this metropolis’s tax charge of 9.5% among the many highest within the county and this 12 months it’ll generate $13.6 million.

Practically half of the tax income is used to offset the town’s multi-million annual price range shortfall, thus sustaining present primary providers and applications.

Different cash was used to revive most of the jobs that had been minimize through the Nice Recession, together with three cops. Price of dwelling changes have additionally been restored to make sure the town stays aggressive within the broader labor market by preserving salaries and advantages per surrounding communities.

With the additional tax income, the town final 12 months floated $20 million in bonds that started funding a number of avenue restore tasks. A bond of an analogous measurement is scheduled for 2024 to lift $15 million for a brand new hearth station and $5 million for extra avenue work.

However with an estimated $141 million in deferred upkeep of the town’s 400 miles of crumbling streets, nobody ought to view the brand new tax as a panacea. Whereas such challenges stay, Petaluma is in a significantly better monetary place in the present day than it was two years in the past.

Petaluma’s 1% gross sales tax, like all different taxes, is extremely regressive. However within the absence of any significant motion in Sacramento to enact a extra equitable tax system for municipalities, we’ll simply need to stay with it.

(John Burns is a former writer of Petaluma Argus-Courier. He will be contacted at [email protected])

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