Do We Really Need to Jack Up Our Sales Tax?

Recently the . The amount of the increase has not yet been decided, but will be at our next meeting this coming Tuesday, June 26.  

The revenue from the tax will go to the general fund, which by law means it can be spent however the council decides, whether that be for employee costs, roads, or any other project. One thing for which the tax is not needed is to balance our town budget this year, as our town manager has informed us she expects we will have a balanced budget without the need for a sales tax increase.

San Anselmo does have a lot of needs. For too long we have not invested in our roads and other infrastructure, including our public buildings, software, and the like. We also have an excellent Recreation Department, which could be even better with greater financial support. We have many strong town employees, and we need to be sure to retain quality staff.

However, a lot of residents, rightly in my opinion, believe that this proposed sales tax is the wrong tax, at the wrong time, and for the wrong reasons. I had several reasons for opposing this tax:

The reasons for the tax. The decision to impose a sales tax on our residents and businesses has not been fully thought out. There has been no effort made to determine (a) what residents feel should be our spending priorities, (b) what the cost may be for these priorities, and (c) how much in added revenue we need to meet these priorities. Instead, we jumped to the punch line, which is how much in a sales tax the residents would agree to pay, and then apparently later we'll decide how to spend the money. I think many rightly believe it would make more sense to first determine our spending priorities and, if more tax revenue is needed, institute a tax that is directed at meeting these needs. I’m definitely not a Tea Partier who is against all taxes at any time; we just need to be smarter about how we spend our money and not ask residents to foot the bill for undefined expenses.

Unrestricted use of the revenue in the general fund. This tax would be a general tax, so it can be spent however the council decides. In contrast, last year's San Anselmo library tax was a special tax, so we knew that the money could only be spent on our . The recent school bond was directed only at school facilities. This fall's Tam Unified High School District parcel tax renewal (which is really important and critical to pass) can only be spent on the schools.

Your guess is as good as mine what this town tax will actually be spent on next year, or the year after, or the year after that. There was some discussion about increasing funding for road maintenance. Another mentioned repairing our tower at town hall. Another mentioned wanting to bring back a paid volunteer coordinator. Since over 80 percent of our budget goes to employee costs (salaries, pensions, healthcare costs), you can bet that a sizeable portion will go to covering our rising costs in these areas.  

I don’t think doing a general tax is a good idea, at least without significantly more outreach and discussion with our residents, and without doing a lot more in terms of controlling the rising costs of 80 percent of our budget. Already some on the council have indicated they are hesitant about efforts , which will lead to significant cost-savings while likely improving our department. While we’ve made some improvements in areas such as our unfunded pension liability, we have not done nearly enough. For those of you who think our town should do more to control pension and other public employee benefit costs, or to share duplicative services with other agencies, I think you can forget about there being any real effort to do so if we suddenly have a windfall of general fund sales tax revenue to spend on pensions and employee benefits.  

Why are we taxing our businesses and residents, especially in the midst of a terrible economy where families are hurting, without first being sure we’ve done all we can to control our costs in other areas? 

Lack of community support and organization behind the measure. In order to pass a tax measure like this there needs to be wide community support, with an organization developed of community leaders willing to run a campaign, fund the campaign, and organize volunteers to fan out throughout the community to rally support. The recent library initiative is a case in point: that campaign was very well organized and had begun organizing over a year in advance, conducting community-wide surveys and outreach. Groundwork for the Measure A Ross Valley School District bond campaign was laid several months in advance. Planning for the Tam UHSD parcel tax measure effort has been going on since at least last year.

None of that has occurred with a propsed sales tax. Little, if any, effort has been made to organize a campaign. No fundraising has occurred. Almost no outreach has occurred within the community. Most folks have been surprised to learn about this proposed tax from my emails, or from reading about it on Patch or in the Marin IJ. Already a very prominent member of our community, who has supported most (if not all) our other tax initiatives, has written to the council expressing alarm at our putting this measure on this fall’s ballot without having done any groundwork with the public. (He also is rightly concerned that it will undermine the Tam UHSD parcel tax measure this fall). If we want a serious effort at raising revenue to fund important services such as road maintenance, we should have a well thought-out, organized effort to do so, not a slapped together, last minute effort.

Sales taxes are regressive, aimed at middle- to lower-income residents. A sales tax is one of the most regressive taxes available, paid for mainly by middle- and lower-income residents. I don't have to tell you that families and seniors and many others in our community are still really struggling in these tough economic times, and it is a mistake to impose such a regressive tax on those bearing the brunt of this economy. Many thoughtful residents have come to our meetings or written to us expressing their love for San Anselmo and desire to help the town, but who just can't support this tax at this time, especially because they are struggling financially and we have not made a case we need it for vital services.

Some have argued that most of a sales tax is borne by “out-of-towners” shopping at our antique shops. I don’t believe such statements square with the actual facts. I think most of the tax will be paid by families, seniors, and other hard-working residents struggling to get by and shopping at Red Hill Shopping Center, not Ross residents coming to purchase high-end antiques. Indeed, the list of top 25 tax generators does not include a single antique shop but rather (in addition to , , and ) small businesses like , , , , and , none of which exactly draw a lot of customers from Tiburon or Peacock Gap.

One other thing: if you haven’t noticed, our downtown is still very much struggling, with lots of empty shop windows. Why raise a sales tax targeted at our business community during a still very tenuous economy, especially when we can simply wait a year or so once our businesses are doing better? Perhaps not surprisingly, by a 3-1 vote of businesses at our local Chamber of Commerce, our business community is opposed to this tax and many have indicated they plan to organize against it.

The state will likely reinstitute a sales tax next year. While the recent state budget lowered , it is anticipated that Governor Brown and the legislature may put a sales tax increase on next spring’s ballot as part of a series of budget initiatives. When that occurs, the sales tax you would pay for shopping in San Anselmo would approach 10 percent.  

Again, these are tough issues, and we all want to improve our town and make sure we can continue to provide vital services. I just think it makes more sense to make sure we have done all we can to control our costs (including the 80 percent of the budget consisting of employee costs) and, if added revenue is needed, we should clearly spell out what the money will (and will not) be spent on. Instead of racing to put a half-baked measure on the ballot this fall, we should re-group and formulate a well-thought out game plan--with broad community support--for next year.