There’s not much debate over whether Novato needs the revenue generated by increasing its local sales tax rate to 9.25%, equal to San Rafael’s.
The city-proposed Measure M tax on the Nov. 5 ballot would generate revenue the city needs to right its fiscal ship, lifting out of a troubling cycle of budget deficits without severe cuts to city services.
Already, current city staffing, according to Mayor Mark Milberg, is at a 20-year low.
The city’s sales tax now stands at 8.5%, set by Novato voters in 2010 and one of the lowest in Marin, where voters in most cities have supported raising the local sales tax to 9% or higher.
The city’s share of the sales tax is 0.25%. Measure M would raise it to 0.75% – or a 75-cent tax on a $100 purchase – and generate an estimated $10.3 million per year.
The problem with Measure M is that it lacks the “sunset” clause that other cities, including San Rafael, built into their tax measures. Setting a time limit for voter renewal of the tax provides a track record for City Hall to prove it needs the tax and has spent it wisely.
Measure M’s critics, among them former mayor Bernie Meyers, say the city is seeking “a forever tax.”
Councilman Tim O’Connor, defending Measure M, says the revenue is needed to address “a forever problem.”
Milberg calls it “a systemic budget deficit.” He’s probably right. The city is facing a long-term budget problem. But that doesn’t mean it wouldn’t have been politically prudent to put a reasonable time limit – such as 10 years – on the tax increase.
The council was encouraged to do so before it wrote Measure M.
In response, Measure M backers assert that Novato voters can, at any time, put a measure on the ballot to repeal the increase. That puts the political onus on voters and city officials are likely banking it won’t ever happen.
The city is also going to voters after a rough patch in terms of fiscal management, where annual audits were missed due to staff turnover, the city had to spend $5.8 million to buy a 4.5-acre storage yard that it mistakenly thought it owned and it has numerous “white elephant” properties in downtown and at Hamilton.
A big part of the city’s current problem was that it actually reduced its sales tax in 2010 in order to muster the political support on the council to put the renewal on that ballot.
In short, the city needs to rebuild its fiscal track record. It also needs to prove to voters that it will be spending the new revenue in ways that reflect taxpayers’ priorities, such as funding for police services, fixing city streets and parks and support for local recreation programs.
Putting a reasonable 10-year time span on the increase – returning to voters – would have been more than enough time for the city to do just that.
If Measure M fails to get the 50% majority vote it needs to pass, the council could resubmit it, with a reasonable sunset clause, to seek voter approval in the city’s 2026 election.
The city’s budgetary outlook isn’t going to get any better during that time
Novato voters may decide that not having an expiration date in Measure M is not important. The IJ editorial board believes a reasonable sunset has worked well for other Marin cities. In fact, some have built their case for renewing or increasing their tax on their track record of accomplishments and progress.
It’s called “accountability,” with politicians following through on their promises.
The city needs the additional revenue, but sadly the Novato council decided to forgo a sunset clause. The IJ editorial board recommends a no vote on Measure M and that the Novato council, as quickly as possible, return to voters with the proposed increase – with a renewal date.
