Supes drop water sales tax; add fire tax
As they say, all's well that ends well, and that sums up Tuesday's (Jun 21) Board of Supervisors meeting where a decision was finally made ending the Great Sales Tax War.
Quick background on sales tax issue:
• In 2011 Friends of the Library groups sponsored a ballot measure, approved by 75% of the voters, that established a 1/8 cent sales tax dedicated to libraries. The measure called for the tax to sunset in 2027.
• Just recently the Friends of the Library qualified a citizen's initiative for the November ballot that would increase the library sales tax to ¼ cent upon the 2027 sunset of the 2011 1/8 cent measure. A major selling point has been that even though the sales tax support for the library would increase by 1/8 cent, the total sales tax would actually decrease because the Measure B Mental Health sales tax would decrease by 3/8¢ from the current ½ cent rate.
• In late May, Supervisors Ted Williams, Glenn Mcgourty, and Mo Mulheren introduced a 3/8 cents sales tax to fund local fire departments and a resurrected county water agency.
• With Measure B being reduced to 1/8 cent, and the proposed library tax at ¼ cent, the BOS proposed 3/8 cent sales tax would result in a 1/8 cent overall increase to the County's sales tax rate.
At Tuesday's session, Board Chairman Williams announced at the outset of the sales tax discussion, that he was disinclined to put the measure on the ballot unless all five Supervisors agreed to do so. Since Supes John Haschak and Dan Gjerde have opposed the proposal, especially the water tax, from its inception, there was little doubt that some kind of compromise was in the offing.
Williams made it clear that he wanted Board unanimity on a decision that would avoid a divisive public battle over competing sales tax proposals.
There have been several other twists to this scenario.
While a sales tax for the benefit of local fire departments is generally supported by taxpayers, the same backing is not found for the proposed water tax, especially when talk turns to a general public perception that the County has done a less than poor job of crafting any cohesive, coherent water policies.
When you couple those public reservations with concerns raised by Supervisors Gjerde and Haschak about the potential usage of water sales tax funds, it points to a rocky road ahead for voter approval.
In a recent memo to his colleagues, Gjerde warned, “It is going to hurt the causes the taxes are intended to help. A countywide water sales tax, for example, is going to bring intense scrutiny to the intended beneficiaries of the water tax. Voters throughout Mendocino County will question why they are being asked to pay a water tax, when the agricultural interests served by the Potter Valley Irrigation District pay virtually nothing for their irrigation water … It is going to divide our communities. To be clear, the Board of Supervisors politically and financially supports the efforts by the Potter Valley Irrigation District, the Inland Water and Power Commission and others who are attempting to retain reasonable water diversion rights from the Eel River to Potter Valley and Lake Mendocino. But support has its limits. Ultimately, the debate over a flawed and unwelcome water tax will trigger devastating political division within Mendocino County, while setting back the very cause the water tax was intended to help. “
In response to Williams signal for a re-worked tax proposal,
Gjerde and Haschak ended up proposing a slimmed down onequarter cent sales tax that would fund only fire departments and the county's Fire Safe Council. The water portion of the sales tax was dropped.
While it took some convincing to bring Mcgourty and Mulheren aboard, the Supes finally and unanimously approved the compromise. Near the end of the meeting, Mcgourty said he felt “kind of betrayed” by the turn of events.
Mulheren, who a week ago, cobbled together a water tax plan that was essentially unworkable due to mostly structural defects, including a bloated “technical advisory” committee, was upset that her colleagues had not paid closer attention to her proposal.
The quarter-cent sales tax, if approved by voters, would be effective in both the unincorporated areas of the county as well as the cities.
The tax would be a general tax, so it would only require a simple majority of votes to pass. Most likely the measure would include an “intent” provision or a nonbinding resolution stating it's the Supes intention the funds will be spent on fire services.
If the measure were a specific tax dedicated solely to fire services, it would require two-thirds voter approval.
The quarter-cent sales tax would generate $4 million to $4.5 million, annually.
The tax proceeds would be split 90 percent for local fire departments and 10 percent for the Fire Safe Council.
If approved by voters, the tax would be in effect for 10 years and then sun-setted, unless renewed by voters.
The deal is also contingent on the county securing another source of funding, that's not a tax, for awater agency and other water related issues. Supes Gjerde and Mulheren agreed to serve on a special committee that would bring a finished product back to the Board on July 12.
If both the Library tax measure and the Fire tax proposal are approved by voters in November, the sales tax rate would remain at the current 5/8 cent rate.