PD Editorial: Santa Rosa must do more before seeking tax extensions

There’s never a great time to ask people to pay more taxes.

It’s especially difficult now, with the coronavirus pandemic taking a toll on the finances of local residents and local businesses.

Local government isn’t immune to the economic impacts of the virus. In Santa Rosa, sales taxes — the city’s single largest source of revenue — dropped 10% in the final quarter of the 2019-20 fiscal year, which paralleled the first three months of stay-at-home orders.

There was an even sharper decline in taxes on hotel stays and real property transfers.

The city balanced its budget by dipping into reserves and instituting a hiring freeze.

No one knows how long the pandemic, or its economic ripple effects, will last. City officials say their budget troubles extend beyond the immediate emergency, with a long-term structural imbalance between tax revenue and the cost of providing public services.

To close the gap, they’re asking Santa Rosa voters to combine quarter-cent sales tax increases approved during the Great Recession and in the wake of the 2017 wildfires and extend the combined tax until 2031. That’s Measure Q on the Nov. 3 ballot.

Santa Rosa’s fiscal challenges are real, but there are cost-cutting avenues the city needs to explore before asking voters for more taxes.

And there is time to dig deeper.

The quarter-cent sales tax approved by voters in 2010 doesn’t expire until 2027, and the quarter-cent tax approved in 2018 expires in 2025. The city will have no fewer than four opportunities to return to the voters for relief before the first expiration date.

It’s likely that the city also will seek renewal of a 20-year, quarter-cent sales tax approved by voters in 2004 to fund police, fire and gang prevention programs. Voters deserve to know the city’s intentions before they decide on any extensions.

Santa Rosa officials are looking 10 years ahead in their budget planning. That’s prudent, and steps they already have taken to reduce costs are expected to keep the budget balanced, as required by state law, through 2024.

Beyond that date, the city’s budget consultants say cuts of up to $8 million — about 4% of general fund spending — will be required to avoid deficits, and that figure is contingent on voters renewing all three sales taxes.

The consultants presented a menu of possible cost savings, most of which the city has yet to explore. Among them are offering early retirement incentives and scrapping a plan to add two new employees annually for the next decade; shifting some administrative jobs in the police and fire departments to civilians to save on retirement costs; and negotiating with employee unions to eliminate some salary enhancements.

The consultants didn’t address possible federal reimbursement of fire-related costs or plans for the city’s $95 million share of the PG&E fire settlement. Councilman Jack Tibbetts suggested investing at least some of the PG&E settlement to create an ongoing source of revenue for fire recovery and other needs.

These options may not be enough to solve the city’s long-term budget problem. If that’s the case, the council will have little choice but to return to the voters for a sales tax extension.

But taxes should be the last resort, not the initial request, especially when a pandemic has forced taxpayers to tighten their own belts. The Press Democrat recommends a no vote on Measure Q.

You can send letters to the editor to letters@pressdemocrat.com.