Cotati’s Proposed Sales Tax

On October 15, 2009, Diane Thompson, the Cotati City Manager, presented the case for revenue enhancement (new taxes) for Cotati at the Association’s Board of Directors luncheon meeting.   It was a persuasive case. Cotati has seen tax revenues fall dramatically as a result of the recession, both from traditional tax sources and from the State dipping it’s hands into city’s coffers to try to combat the State’s own financial problems. In response Cotati has cut expenses, postponed non-essential activities, and employees have voluntarily taken noticeable pay cuts. Still Cotati is racing toward insolvency.

Among the potential solutions are several that would have Cotati, a City of only 7,500 residents and Sonoma County’s smallest city, combine with the County or with the adjacent Rohnert Park to provide public services. Thompson described the strong independent streak among Cotati residents that is an obstacle to pursuing these alternatives. Several Cotati residents at our meeting confirmed the community identify and the concern it will be lost if Cotati has to partner with other government units going forward.

It’s expected a citizens’ initiative will place a half cent tax sales measure on the February 1020 ballot. The result, if passed, is estimated to provide the current short fall of approximately $700,000 in Cotati’s budget. It would also raise the sales tax in Cotati to 9.50%, the highest in Sonoma County.

While it’s hard to support raising taxes, especially during a recession, and when the local residents are unwilling to consider measures like shared services with other government units which might avoid the need for raising taxes, as long as the hurdle for approval is high, 2/3 of all ballots cast, it may be appropriate to the let the taxpayers in Cotati decide what kind of city they have.

But therein lies the rub. Cotati, a small city, houses a large regional retailer, Loew’s home improvement store. Many of the taxpayers who would pay a higher tax by shopping at Loew’s are not Cotati residents and would have had no opportunity to vote on the proposed tax. In addition, Loew’s competes with the Home Depot store close by in Rohnert Park, OSH in Petaluma and Friedman’s in south Santa Rosa.   Some shoppers, especially those making larger purchases like contractors or consumers buying big ticket items may logistically opt for buying at other retailers instead.

For this reason the Association may not support the Cotati tax. If Cotati residents truly are willing to tax themselves to pay for their penchant for independence, let them enact a tax that would fall only on the residents, like a parcel tax on residential parcels (assuming the owners of commercial parcels may be less likely to be Cotati residents and voters in Cotati. The idea that some Cotati residents want to raise a tax that mostly others will pay is not right, and not something the SCTA should supports.

Opinion by Jack Atkin, President, Sonoma County Taxpayers’ Association


Comments are closed.