Santa Rosa surveys residents about potential tax hikes

Santa Rosa is conducting polling to gauge the public’s appetite for raising taxes in the city to help rebuild following the October fires.

The poll is reaching out to residents by email, landline and cellphone and asking them to take a survey designed to understand, among other things, what types of tax measures they might support and for what purposes.

The two key questions in the poll ask how people feel about a quarter-cent sales tax increase, or an increase in the hotel bed tax.

The hypothetical quarter-cent sales tax increase in the poll is estimated to raise $9 million per year for six years. The tax would apply to all sales of taxable goods within city limits.

The increase in the hotel-bed tax would boost the tax rate from 9 percent to 14 percent, raising estimated $2.5 million annually. That tax applies to rooms rented for fewer than 30 days in hotels and other accommodations in the city.

In January, the City Council instructed City Manager Sean McGlynn to conduct the survey work as it began to grapple with its post-fire budget challenges.

Those woes have only deepened in recent months after the fires, as the city is proposing to spend next fiscal year $14.2 million above what its general fund will take, draining reserves down to just 7 percent, less than half what the city calls for setting aside.

McGlynn declined to discuss how the survey questions or hypothetical tax increases were conceived, saying he didn’t want to influence the poll, which is ongoing. He said the questions originated from issues raised at City Council goal-setting meetings and long-range finance committee sessions.

“We encourage people to participate so we can get a barometer of how folks are feeling and their approach to problem solving,” McGlynn said.

The survey will query more than 1,000 people by the time it is finished in the coming days, said Charles Heath, a partner at TBWB Strategies, the San Francisco firm doing handling the poll. The city is paying the firm $35,500 for the work.

In devising the questions, the firm spoke with city department heads, including its acting chief financial officer, and tried get a clear picture of the city budget pressures. They include post-fire recovery, the acute housing shortage, aging infrastructure and general budget pressures, Heath said.

“The city has a multitude of needs” and the survey was designed to gauge voters “tolerance for potential investments,” Heath said.

The tax measures in the poll are not out of line with what has been discussed in the council’s long-range budget subcommittee, said Councilman Chris Rogers.

In addition to increases in the sales tax and bed tax, the subcommittee has also discussed changes to the city’s utility users tax, which charges 5 percent on utilities such as gas, electric and landline telephones.

A 2014 effort to “modernize” the tax by extending it to cellular telephones failed at the ballot box with 54 percent opposition.

The council was not made aware of the method of polling to be used nor the exact language in it, Rogers said.

He realized it was underway was when a colleague got a text asking for participation.

“A coworker showed it me and said ‘What is this?’?” Rogers recalled.

In additional to the questions about two tax measures, the survey asked people about their general impressions of city services and departments, as well as how strongly they felt about various initiatives, including “providing neighborhood police patrols,” “preventing future fires,” “preserving open space,” and “restoring city facilities and infrastructure.”

Rogers said the hypotheticals tax measures in the poll do not necessarily suggest what types of measures the city is leaning toward at present.

“I think we’re just trying to not take any option off the table right now,” Rogers said.

The poll also asked about another initiative which has already been the subject of much polling and discussion - the proposed $300 million countywide housing bond. The question in the survey refers to an earlier version of the proposal when up to $370 million was envisioned.

It is supported by a cross-section of business, housing and community advocates, as well as council members Jack Tibbetts and Tom Schwedhelm.

But the bond measure, which is aimed squarely at spurring new affordable housing development and proposed for the November ballot, could pose a threat to any effort by Santa Rosa to raise money for other local services.

Voters rarely approve multiple tax measures on the same ballot, so competing measures jockeying for position on the ballot is not uncommon.

“Regardless of what we do, the city would need to show a strong and compelling case to the public that we need the additional dollars,” Rogers said.

Some of the polls also inquired about residents’ interest in a Santa Rosa-only housing measure, in part to see how it compared to support for the countywide measures, Heath said.

The city’s ability to get a quarter-cent sales tax passed may be influenced by residents’ last experience with such a request.

In 2010, when the city’s budget suffered a precipitous drop in tax revenue after housing prices cratered during the recession, voters approved a quarter-cent sales tax increase for 8 years to help “maintain essential city services” such as police, fire, gang prevention and pothole repair.

Voters in 2016 agreed, by 73 percent, to extend the sales tax measure for another 8 years to “maintain financial stability and funding,” in the city. The measure stated it would accomplish that objective “without increasing taxes.”

McGlynn said he expects to present the results of the polling to the council within two months.

You can reach Staff Writer Kevin McCallum at 707-521-5207 or kevin.mccallum@pressdemocrat.com. On Twitter @srcitybeat.