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Backing sales tax hike, Petaluma council orders informal polling first

Published: Tuesday, June 26, 2012 at 8:16 a.m.
Last Modified: Tuesday, June 26, 2012 at 8:16 a.m.

Petaluma City Council members on Monday expressed support for seeking an increase in the sales tax but first want to see if city employees, civic groups and the community would support a November ballot measure on it.

Informal polling will occur within the next three weeks, with council members and City Manager John Brown reporting their findings at the July 16 meeting. A ballot measure must be approved by Aug. 6 for the election.

Most council members said they would vote to place a tax measure on the ballot but questioned how much of an increase voters might support, how long a potential tax should be in place and whether any tax would pass.

The sales tax question was thornier for the council than that of increasing the city’s transient occupancy tax, commonly called the hotel tax.

Faced with opposition Monday from hotel, inn and campground owners — virtually every sector of Petaluma’s lodging industry — council members quickly rejected the idea of adding 2 percent to the 10 percent hotel tax.

Raising Petaluma’s hotel tax to 12 percent would bring in about $270,000 more a year.

Petaluma receives about $10 million annually from the state in sales tax revenue. Increasing the existing 8 percent sales tax rate by a half a percentage point would generate an additional $5 million a year. A quarter-percentage-point increase would net half that.

Earlier this month, Sonoma voters approved a five-year, half-a-percentage-point sales tax increase by a wide margin.

But Petaluma council members weren’t so convinced their voters would follow suit.

Gabe Kearney was “apprehensive” about pushing it. Teresa Barrett said a sales tax is her “least favorite” levy. Mike Healy said voters are “mad at government.” Chris Albertson said they may be “tilting at windmills.” Mike Harris said residents are “hurting out there.”

Mayor David Glass was reluctant to support another ballot measure that would compete with a recently qualified parcel tax to fund city parks. Vice Mayor Tiffany Renee said a quarter-percentage-point tax hike would provide a “drop in the bucket” toward the city’s financial needs.

Department heads presented a list of $117 million worth of projects or programs they could restore with extra funds, some one-time needs and some annual commitments.

Responding to a drop in sales- and property-tax revenues, Petaluma has cut its general fund spending from $48 million in 2008 to $32.5 million this year.

The council appeared to support seeking a general tax, one with no specific purpose but with identified priorities. Such a tax must be approved by a two-thirds majority of the council and a simple majority of voters.

A specific tax would need majority council approval and two-thirds approval by voters.

You can reach Staff Writer Lori A. Carter at 762-7297 or lori.carter@pressdemocrat.com.

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