Petaluma needs a tax increase
On Jan. 1, many people will resolve to spend less and save more. Whether it’s for a long overdue home maintenance project or for that dream vacation, they will go through the ritual of austerity to achieve their goals.
The city of Petaluma has been surviving under austerity measures for a decade now. The necessary frugality put in place during the recession has persisted as maintenance on city buildings continues to be deferred, streets continue to crumble and eliminated staff positions have not been replaced.
Unlike a fiscally savvy household, the city does not have the option of spending less and saving more. Under the austerity regime, all the fat on the budget has been trimmed, so there is really no room for less spending. And saving more is not an option since an increasing amount of the city’s budget will go toward mandatory pension costs.
To stave off a deficit, the only other option is to increase revenue, and the most effective tool municipalities have to increase revenue is by raising taxes.
City council members signaled an openness to discussing a tax measure in the new year, with a possible ballot measure in 2020. It will likely be the most important action the city takes in the next two years as a successful ballot measure will mean the difference between a thriving city and on that is on life support. There is no room for failure.
For starters, the city needs to decide on which revenue measure would likely pass, and ample polling will help. To actually chip away at the budget shortfall, a sales tax increase could do the most work. Other taxes on niche industries like real estate and hospitality could help eat into the deficit and allow for a more palatable sales tax.
If the city decides to pursue a sales tax measure, which it should, the next step is to determine the amount, length and purpose. In 2014 Measure Q would have raised sales tax in Petaluma by one cent, with no end date, for general city services. Voters overwhelmingly rejected it.
Also in 2014, Measure Q was not backed by all seven council members. Mayor David Glass and Mayor-elect Teresa Barrett opposed the measure. Whatever the council proposes should have the backing of all the elected officials in order to have a chance to pass.
After the polling to determine the best possible tax proposal, and necessary compromises to receive the backing of the full council, the next step is a robust campaign. Since a tax measure would likely help the police and fire departments, the unions that represent those workers should be out in front campaigning for it. Other stakeholder groups that benefit from the city having a stable budget, really every resident, should also get behind the campaign.
Finally, the city needs to get the measure on the ballot. The city could call a special election and place the tax measure on the ballot in 2019, but it would cost more than combining it with the general election in 2020.
The most logical action would be to craft the measure in 2019 and place it on the ballot in March or November 2020. It will be a presidential election year and would benefit from what is expected to be a huge voter turnout.
For the new year, we hope the city resolves to take a hard look at increasing revenues. Now is the time to start the conversation.