Petaluma council to weigh possible tax measures

Petaluma City Council members on Monday will discuss asking residents to increase two local taxes — the citywide sales tax and a tax on those visiting Petaluma in local hotels.

Faced with a continuing budget shrinkage, the seven-member council could vote to put either or both tax hikes on the November ballot.

The discussion follows several tax increases that Sonoma County voters approved on the June ballot and a Petaluma initiative seeking a new parcel tax to pay for Petaluma parks that just qualified for the ballot.

Two councilwomen have pushed for tax hikes after the council passed a budget in June that cut every department about 5 percent from last year. The city has reduced its general fund spending from $48 million in 2008 to $32.5 million this year.

In that time, the reserve fund has been exhausted and about six dozen positions purged from city rolls, mostly by elminating vacant positions.

Vice Mayor Tiffany Renee said the city needs at least a half-cent increase in the city sales tax, currently at 8 percent, among the lowest in the county.

Councilwoman Teresa Barrett has supported a 2 percentage point increase in the hotel occupancy tax, which is currently 10 percent. The county's highest is 12 percent in Rohnert Park and Windsor.

Petaluma receives about $10 million annually in sales tax revenues and about $1.35 million from the hotel tax.

Increasing the sales tax rate by a half a percent would generate another $5 million a year. A quarter-cent increase would net about $2.5 million.

Raising Petaluma's hotel tax by to 12 percent would bring in about $270,000 more a year and would increase Petaluma's visitor tax equal to the highest in the county.

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