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North Bay business leaders mount opposition to tax measures amid pandemic

North Bay business leaders are coalescing behind a claim that any new local taxes or renewals would deal too heavy a blow to an economy already staggered by the coronavirus pandemic, and they are openly calling on elected officials to put a stop to the series of tax measures slated for the November ballot.

The North Coast Builders Exchange and Sonoma County Farm Bureau have joined the North Bay Leadership Council in opposing all proposed tax increases and extensions this year. The groups are demanding that no new tax measures be put in front of voters until 2022, when the pandemic will hopefully have subsided.

“In the worst economic time that we’ve ever faced, it feels like government is piling on to be asking for more tax money,” said Keith Woods, chief executive of the North Coast Builders Exchange, a construction industry trade group. “Come back in two years, and if the economy has rebounded, we can look at each measure.”

Renewal measures on this year’s ballot in Sonoma County include the countywide quarter-cent tax to support transportation and transit upgrades as well as sales tax extensions in Santa Rosa, Healdsburg, Sonoma, Cotati and Cloverdale. The Petaluma City Council is poised to introduce a new 1-cent sales tax to support city services at its regular meeting on Monday as well.

In addition, Sonoma County supervisors have signaled support for placing on the November ballot a new 10-year, quarter-cent sales tax to fund mental health and homelessness services.

The business groups say such tax proposals would place an undue hardship on local businesses that have been forced to lay off employees and close their doors for months because of state and county shutdowns aimed at curbing the spread of the virus. They also say now is the wrong time to ask local residents impacted by the pandemic-induced recession to hand over any more money to local governments.

In his discussions with local public officials, Woods said, he’s received “mixed comments” about delaying any tax measures until 2022. Most have already been approved for this year’s ballot, with a few final votes scheduled for this week ahead of a Friday deadline.

Many city council members and county supervisors contend that extending local sales taxes, and raising new ones in two cases, is desperately needed to fund essential municipal services as the fallout from the pandemic decimates public revenues.

Sonoma Mayor Logan Harvey said he doesn’t believe there’s significant opposition from local businesses or residents to his city’s proposed half-cent sales extension for general services. If the measure fails to pass by a simple majority vote, however, it could result in “mass layoffs” of city employees, he said.

“This pays for everything you enjoy as citizen,” Harvey said, pointing to maintenance of Sonoma Plaza as well as police and fire departments. “Not supporting it would be disastrous for the city, especially during COVID.”

Some local business leaders remain unconvinced. They argue that city and county governments have long struggled to responsibly manage revenues, pointing to soaring payroll and pension costs, which have in part fueled current budget shortfalls.

Cynthia Murray, president of the North Bay Leadership Council, which represents more than 50 major businesses and nonprofits in the region, said that just as local business have had to make cuts during the pandemic, local governments should do the same. Instead of asking for new taxes, she said, local governments could rein in “growing” pension liabilities, renegotiate labor contracts and shed employees.

In addition, Murray and Woods pointed to existing funds such as the emergency federal aid made available through the CARES Act and the combined $240 million Santa Rosa and Sonoma County received from PG&E to settle claims from the 2017 fires.

“This is a time to try and do something cohesive and strategic ... not to try to chop a little tax money here or there,” said Murray, a former Marin County supervisor and member of the Novato City Council. ”There’s a finite capacity for people and business to pay taxes right now.”

Sonoma County Supervisor Shirlee Zane pushed back on claims that her board has mismanaged its spending, noting the county in recent years has put in place some pension reform measures.

Zane has given strong support to the countywide sales tax measure for homeless and mental health services, which would need a two-thirds majority vote to pass. She said it’s urgent that voters back the measure because the need for mental health and homelessness services will only continue to increase during the pandemic, and current state and federal funds aren’t enough to cover the cost.

She added that local business owners have for years agitated for the county to address homelessness near their establishments. She said she’s “angry” that some business groups have decided to oppose the measure.

“If you’re a business and (homelessness) bothers you, then you should vote for this and campaign for it,” she said.

The three business groups pushing for the delay of all tax ballot measures have formed what they’re calling a 2020 Tax Moratorium Coalition. Murray said she hopes more groups will join in the run-up to the election.

Peter Rumble, chief executive of the Santa Rosa Metro Chamber of Commerce, said in an email that his chamber is currently considering joining the coalition in asking for a tax moratorium.

Sonoma Media Investments, which owns The Press Democrat, is a member of the North Bay Leadership Council, and Sonoma Media Investments CEO Steve Falk is a council board member. Brad Bollinger, publisher of the North Bay Business Journal, also owned by Sonoma Media Investments, sits on the group’s executive committee.

You can reach Staff Writer Ethan Varian at ethan.varian@pressdemocrat.com or 707-521-5412. On Twitter @ethanvarian

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