Thursday, June 29, 2017

[Sonoma County] County, Windsor facing sales tax limit, says Grand Jury

Sonoma County taxpayers might think it’s ‘good news’ that the county has “run out of runway” to increase any local sales taxes, but the newest Grand Jury report, released last week, also finds that the county has $750 million in unmet funding needs over the next five years.
That means the ‘bad news’ is further efforts to reduce the county’s unfunded pension liabilities, fix more roads, help the homeless or provide universal pre-school opportunities could be greatly curtailed.
A looming sales tax cap also could limit all incorporated cities from asking their voters to OK any city-specific tax as well.
Local jurisdictions under state law are allowed to raise any local sales tax by two percent over the current statewide rate of 7.25 percent. Most rates in the county and cities now stand at 8.125 percent, with Sebastopol (8.875) and Cotati (9.125) the highest.
The Town of Windsor has never levied a town-specific sales tax increase and the rate is currently set at 8.125 percent, the same as the county and most other cities.
About 28 percent ($4 million) of the town’s general fund comes from sales tax proceeds, said Camille Kazarian, assistant town manager. “Local cities only get about one percent of the sales tax that gets collected. In Windsor, we try to keep our taxes lower than most (other cities) and we try to keep our services high.”
Town leaders have not discussed any future sales tax increases and just completed a new balanced budget for the new fiscal year.
Local governments rely heavily on property and sales taxes to support their general funds. With property tax rates frozen by Prop. 13, county supervisors and city councils have asked voters over recent years to approve a series of sales or special tax increases.
Among these taxes now pushing the cap are Measure M county transportation levies, open space preservation, library support and SMART train funding.
A vote to add a half-cent to the county’s sales tax for parks operations was defeated last November while a 1/8th cent library tax was approved.
In their latest report, the Civil Grand Jury said, “without further revenues or large cuts to current expenditures, citizens and their elected officials will confront difficult choices between reallocating resources and deferring priorities indefinitely.”
The study of the sales tax limitations was one of eight investigations included in the grand jury’s annual report.
Other topics covered included the loss of the county’s composting services, a review of the new groundwater rules, inspections of county detention facilities and practices, available health services for children and maternal cases, Santa Rosa’s homelessness problems and two other more local reports.
In its own budget, the county’s Board of Supervisors listed $150 million in needed new funding for each of the next five years. This total includes reducing pension liabilities ($23 million), added road repairs ($24-31 million), deferred maintenance on county facilities ($23-32 million), expanded homelessness services ($11 million) and universal pre-school facilities ($29 million.)
Local counties may petition the state legislature to increase the local sales tax cap above the current two percent. (San Mateo and Monterey counties have done so.)
If Cotati, with the highest sales tax, or any other local jurisdiction won voter approval for a new sales tax at or above 1/8th of a cent, it would freeze all other jurisdiction’s sales tax limits under current state law.
In a key recommendation, the Grand Jury said “the Sonoma County Board of Supervisors (should) develop a formal process to work with cities, independent special districts and JPAs to coordinate future sales tax measures to ensure sales tax revenues are maximized across all jurisdictions.
June 27, 2017
The Windsor Times
By Rollie Atkinson


No comments: