Proposed City Sales Tax Increase Debated at "Non-Advocacy" Town Hall

Citizens spoke on both sides Tuesday ofthe proposed half-cent Healdsburg sales tax increase on the Nov. 6 ballot.

The sales tax increase, if approved by voters, would raise the city's sales tax from its current 8 percent to 8.5 percent for 10 years.

Residents, speaking after a PowerPoint presentation by City Manager Marjie Pettus, had different views of whether the sales tax increase was necessary.

Ray Holley, an area writer and public relations consultant, said he supported the measure.

"It costs more to do business in Healdsburg and it always will," said the former Healdsburg Tribune editor. "And it costs more to live here. That’s a choice we make."

Holley's comments appeared to be a response to several points raised by Tim Meinken, the only one of six candidates for Healdsburg City Council who opposes the increase.

Meinken said he thinks the sales tax increase will be a deterrent to business.

"What about the loss of revenue from sales at the automobile dealers in town," he asked, characterizing the business at the dealers as the largest source of tax revenue for the city. Pettus disputed that characterization.

Meinken also questioned whether the city had fully looked at revenue alternatives, a question that Pettus responded to quickly.

"If you don't attend budget meetings, it's difficult to appreciate how much time is spent in looking for savings," she said. "We'll continue to look for ways to streamline organization because that's the responsible thing to do."

The sales tax increase is expected to generate an estimated $1 million in added annual revenue over the term of the tax increase.

The city budget has an estimated $800,000 deficit in this year's general fund, largely due to the impact of the loss of state redevelopment funds over the past year, Pettus said.

Pettus said the loss of redevelopment money means, in part, that the city must pay for necessary services that were offset by redevelopment grants. Pettus estimated that difference at about $500,000 a year.

However, Pettus pointed out in response to a question from the audience that the estimated $1 million of annual revenue would not simply "plug the hole" in the general fund budget.

"There needs to be a public process to determine how the [tax] income is used," she said.

 "If Measure V fails, I can't tell you what the City Council will do, but I can tell you what I would recommend: balanced cuts, balanced reductions in service and personnel," she said.

Barely a dozen people were scattered in the folding chairs of the City Council chambers at City Hall Tuesday night when Pettus began her PowerPoint presentation. Ten minutes later, that number had doubled.

The community meeting was called by the city to explain the measure, not to advocate for it, as Pettus made clear at the outset.

"It is not supposed to be a forum where we discuss the merits or conduct advocacy for the measure," she said.

The measure is described in a city document at this URL and attached to this story.

A "yes" vote on Measure V means approval of the half-cent sales tax; a "no" vote means rejection of it.

If approved, the new 8.5 percent sales tax in Healdsburg, which would go into effect on April 1, 2013, would be in line with the sales tax rate in Santa Rosa, Rohnert Park, Sonoma and Cotati.

If Proposition 30, a state-wide tax of a quarter cent, is approved, the tax rate in Healdsburg and other cities above would rise to 8.75 percent.

Sebastopol is also considering a half-cent sales tax hike (Measure Y)  in the November election.

Petaluma and Windsor retain an 8 percent sales tax rate for now.

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