Fairfax Considers a Local Sales Tax

A half-cent may not seem like much. But, if Fairfax approves it, a half-cent sales tax could generate close to $160,000 for the town.

For a town with a $6.9 million operating budget and a lot of cuts in its future if some form of revenue isn’t found, $160,000 could help close a growing budget hole.

“We’re being inundated with new costs,” said Vice Mayor Pam Hartwell-Herrero. CalPERS costs for the town rose 17 percent this year, she pointed out. With the economic downturn and state budget woes, towns across California are trying to find ways to balance their budgets. “A lot of towns are responding to that by laying off people and cutting services.”

At a special meeting on March 16, the town council discussed the possibility of bringing a half-cent sales tax to the Fairfax voters. The idea is still very much in the preliminary stages and will come back to the council at its April 6 meeting and probably at another community workshop. In addition, Hartwell-Herrero said they plan to bring the chamber and business owners in to discuss the tax.

The council has until August to decide if it will put the measure on the November ballot. It must also decide if the funds the tax raises will be for the general fund (requiring a simple majority vote) or will have a specific purpose (requiring a two-thirds vote).

The council has previously considered it and a to save money. The Master Fee schedule was updated last year to help the town more accurately cover its costs and staff have gone without raises in three years, said Hartwell-Herrero.

“The idea would be to spread the pain to people who come and visit the community,” she said of the local sales tax, noting that it is not something anyone is excited about, but simply a possible step to address budget problems.

Marin County currently has a nine percent sales tax, but local towns and cities get only one percent, or about $365,000 for Fairfax. More than half of the collected sales tax stays with the state, said Town Manager Michael Rock, while the county keeps another percent. In addition, Marin has special taxes, like the one-quarter cent sales tax to fund the SMART train and a half-cent sales tax that goes to the Transportation Authority of Marin.

But, a Fairfax half-cent sales tax would all go directly to the town, not the state or county.

Fairfax residents have in the past twice supported a five-year $125 parcel tax, known first as Measure F and renewed as Measure I. If the council decides to put the local sales tax on the ballot, it is expected that a similar political campaign will be waged in town.

Rock said that so far “we’re having fairly positive responses [about the tax].” He said that mostly residents have had questions about how it would work and how much it would raise. Residents, he said, are knowledgeable about the budget crisis and problems. “They’re very much aware of what’s going on.”