Sonoma California Gives Straw Vote Approval to Increase Sales Tax
- Sales Tax News
- Feb 29, 2012 | Susan McLain
While the state capital of California is debating sales tax increases state-wide, local jurisdictions have to deal with debating whether their cut of sales tax will be enough. Sonoma City is no exception. In a “straw vote [that] came on the heels of a budget report by City Manager Linda Kelly,” the Sonoma City Council “…gave unanimous, but unofficial, approval…to a local sales tax increase.”
Two remedies to an expected shortfall in general funds were recommended. One was to simply raise the sales tax rate within the city. The other was a bit more complex that involved city hoteliers imposing “…on themselves…a 2 percent tax that they would then invest in promoting tourism in Sonoma.” That investment on their part would be matched by the removal of city funds currently provided by the city that may no longer be available and involve the creation of a Tourism Improvement District (TID) by the hotels.
Sonoma has not voted an increase in sales tax since 1992 and that was to “…raise the transient occupancy tax (TOT) on hotel beds from 8 percent to 10 percent.” The hotelier community is supportive of finding a way to ensure a strong tourism base. Bill Blum, spokesman for Sonoma’s big-four hotels, has indicated that “…his group could get a TID up and running in as little as two months, that they would support a sales tax increase, even up to a half-cent, and if that didn’t raise enough money, his group would support an additional TOT increase of 2 percent more.”
According to Kelly, consequences of not finding additional sources of revenue could, “…result in cuts to core services, and that would affect public service.” The City Council has directed that a draft ballot measure be drawn up for consideration. Passage of a sales tax increase requires voter approval in Sonoma. City Attorney Jeff Walter advised “…that a wise course of action is to sunset the proposal so that it expires in a guaranteed number of years.”