Petaluma considers sales tax hike to close budget gap

<p>Petaluma officials are considering asking residents to approve a quarter-cent sales tax for public safety, but the recession and a possible competing state tax could hamper its success.</p><!-- Nothing to do. The paragraph has already been output --><p>During a mid-year review of city finances Monday, City Council members discussed a number of options for dealing with anticipated shortfalls, expected to be $2.2 million next fiscal year.</p><p>Increasing the sales tax to 8 percent would generate more than $2 million, supplementing police and fire department budgets. The item could go before voters at the next scheduled election in June 2010, or perhaps later that year in November.</p><p>But the worsening economy and a 1.5-percent sales tax increase proposed by Gov. Arnold Schwarzenegger could make Petaluma voters reluctant to approve a local sales tax.</p><p>Mayor Pam Torliatt said Petaluma officials would need to gauge voter support before embarking on a campaign that could end in defeat. She reminded colleagues of the 2003 utility tax initiative to raise money for roads that failed by a 2-1 margin.</p><p>"If there's support I certainly would help move that forward in the community," Torliatt said Monday of the sales tax increase. "If there isn't, it could end up being money spent without getting somewhere."</p><p>Petaluma has struggled with finances over the past year, laying off 25 employees and slashing services from parks to public works to save more than $3 million.</p><p>Despite the reductions, the city is facing a $1.6 million mid-year deficit brought on by declining sales and property tax revenue that is expected to grow before the fiscal year ends June 30.</p><p>City Manager John Brown is expected to propose additional reductions, including consolidating services and cutting salaries. He'll ask department heads to trim up to 15 percent by this summer.</p><p>But he said cuts alone won't solve long-term problems. The city faces continued deficits and has used much of its reserves.</p><p>A sales or parcel tax tied to public safety could help the city remain solvent, he said.</p><p>Brown also raised the possibility of an admissions tax on events such as stock car races and increasing franchise fees. Torliatt said she would favor a slight increase in bed taxes on hotel guests.</p><p>Brown is expected to present a plan to the City Council sometime this spring.</p><p>"We're going to be beating the bushes over the next several months to make sure the city is getting the maximum from fees and taxes," Brown said.</p><p>The idea of a quarter-cent public safety tax in Petaluma first surfaced about four years ago. At the time, Councilmen Keith Canevaro and Mike O'Brien said it would enable the city to hire 20 more police officers and firefighters.</p><p>Despite polling that O'Brien said showed strong support for the increase, the tax never made the ballot. O'Brien said Canevaro's early departure from the council and criticism from anti-tax corners killed the initiative.</p><p>This week community activist Dick Sharke of the McDowell Drug Task Force raised the issue again. He said the police department is shorthanded and needs a cash infusion to get more officers. Sharke called for a public safety tax, which appeared to have some council support.</p><p>Councilman Mike Healy said taxes for specific purposes generally require a two-thirds majority, but a public safety tax initiative could be written to need only a simple majority.</p><p>Healy said Petalumans have historically been unwilling to tax themselves, but strong support in the city for Measure Q, the commuter rail measure, could be cause for optimism.</p><p>Six years ago, Santa Rosa voters overwhelmingly passed a quarter-cent sales tax increase to beef up police and fire and fund anti-gang programs.</p><p>"It would not be an easy thing to pass," Healy said Tuesday. "But on the other hand, if people see a real public need, they could be willing to go there."</p><p>You can reach Staff Writer Paul Payne at 762-7297 or paul.payne@pressdemocrat.com.</p>