State legislation clears way for voter-approved Sebastopol sales tax

New legislation signed by Gov. Gavin Newsom has cleared the way for Sebastopol’s voter-approved half-cent sales tax to be fully implemented beginning in January.

The law allows Sonoma County cities to exceed sales tax rates beyond 10.25%, handing the county another exemption over and above one in place since 2018 that had allowed local jurisdictions to exceed the state cap by 1 percentage point.

For Sebastopol shoppers, come next year, the new sales tax rate will be 10.5%, the highest in the county and the maximum allowed under the new legislation, Senate Bill 132.

For the city, the law marks a critical step toward fully opening up a revenue stream expected to bring in $1.52 million a year as Sebastopol slowly digs itself out of one of the worst fiscal crises it has seen.

The city credited state Senate President Mike McGuire, D-Healdsburg and Assemblymember Chris Rogers, D-Santa Rosa with helping to pass the legislation.

“We are grateful for the community’s continued support and for our partnership with the County, as well as Senator McGuire and Assemblymember Rogers, as we move toward full implementation of Measure U,” Sebastopol Mayor Stephen Zollman said in press release. “With this uniform funding and strong accountability, Sebastopol can successfully sustain our critical services and invest in our community’s future.”

The city’s ability collect the full tax was thrown into question in November after the measure’s approval.

That’s because Sonoma County voters also passed a countywide quarter-cent sales tax — Measure I, supporting child care and children’s health care.

Combined, that tax and Sebastopol’s new measure put the city over the county’s state-mandated 10.25% cap.

Surpassing that cap requires intervention either from the state Department of Tax Fee Administration or the Legislature.

The new law pertaining to Sonoma County allows Sebastopol to implement both tax measures, pending approval by the California Department of Tax and Fee Administration.

Measure I is projected to bring in $30 million a year, to support child care and child health care across the county.

To buy time as officials worked to get clearance from the state, the city and county reached a temporary agreement last December that allowed partial implementation by reducing the city measure to a quarter-cent tax and allowing full implementation of the countywide Measure I.

The agreement also required any Measure I funds collected in Sebastopol be returned to the city to supplement Measure U’s reduction. This arrangement will continue until Measure U is implemented in full next year, the city’s press release said.

While the temporary agreement allowed Measure I to be collected in full, the passage of the new state bill brought a sigh of relief for Measure I supporters.

“We’re grateful to Senate Pro Tem Mike McGuire for taking this crucial step to ensure that Sonoma County kids get the early childhood support they need, and that every resource the voters approved through Measure I is delivered ASAP,” Ananda Sweet, who led the Measure I campaign, said in a text.

Of the funds raised by Measure I, 60% would be directed to child care, including pay for employees, workforce growth and expansion of the child care network as a whole. The remaining 40% would be directed to children’s health and early development programs, including perinatal and early childhood mental health, pediatric treatment and assisting children facing issues like homelessness.

In Sebastopol, Measure U will be in effect for 12 years.

The City Council has indicated it will spend about 40% of Measure U revenue on infrastructure. Plans for the remaining funds are more fluid but could include public safety, wildfire and emergency preparedness, parks and trails and/or a new library building.

You can reach Staff Writer Emma Murphy at 707-521-5228 or emma.murphy@pressdemocrat.com. On Twitter @MurphReports.