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Sales Tax Measure

The City of San Rafael strives to protect the quality of life for all residents and to provide a safe, healthy, prosperous and livable environment in partnership with the community. Important priorities include safe neighborhoods, active community centers for our youth and seniors, emergency response services and providing social services to support our most vulnerable populations. These essential city services make San Rafael a desirable place to live, work, do business and retire.

Challenges Facing Our City

The City of San Rafael, along with many other cities across Marin County and the Bay Area, has been greatly affected from the COVID-19 pandemic and related steep downturn in economic activity. Currently, the City is projecting an $11.8 million deficit, putting many essential services at risk. To face these challenges, the City has implemented a cost-cutting plan that includes reducing city workers’ hours, hiring freezes, canceling recreation programs and delaying infrastructure maintenance. In addition to budget reductions, the City is also evaluating options for generating new funding. See the City’s COVID-19 Economic Recovery Plan (CERP) for more detail.

Local Funding to Address Community Needs

The City of San Rafael recently commissioned a survey of local residents that measured 64% support for increasing the local sales tax rate to help preserve city services. On July 20, 2020, the San Rafael City Council unanimously voted to place Measure R, a sales tax measure on the November ballot. If passed, Measure R would increase the local sales tax rate by one-quarter percent, for 9 years, to generate $3.4 million per year of locally controlled funding for city services, including:

  • Providing disaster and health emergency preparedness
  • Maintaining 911 emergency response times
  • Repairing potholes and enhancing city streets
  • Maintaining city parks and playgrounds
  • Maintaining services and programs for youth, families and seniors
  • Maintaining crime prevention programs and services
  • Maintaining local services to help address homelessness

Strict Fiscal Accountability Requirements

A potential sales tax measure would require strict fiscal accountability protections, including:

  • Every penny from the measure must stay in San Rafael and no funds can be taken away by Sacramento
  • None of the money raised by the measure would be used for administrators’ salaries
  • The measure requires a Citizens’ Oversight Committee to ensure funds are spent for the intended purposes
  • A sales tax increase would be paid not just by San Rafael residents but also those who visit and shop in San Rafael
  • Groceries, prescription medicine and other essential purchases are exempt from sales tax, which helps ensure the cost is not a burden to those on fixed incomes

Please let us know your priorities for San Rafael by completing our survey.

Frequently Asked Questions

Yes. By law, all funds from a local voter approved sales tax measure must be spent locally to address local needs. In fact, only one-quarter of one percent of local sales tax remains available under the statutory sales tax cap established in state law. The City has a very limited opportunity to capture this revenue stream for local use before it may be taken by overlapping county or other regional agencies.

A potential measure would require strict fiscal accountability to ensure transparency and public oversight. Mandatory annual independent financial audits, citizen oversight, and public disclosure of spending would ensure that all funds remain in San Rafael and could not be taken by the County or State government. These fiscal safeguards would ensure funds are locally controlled and used efficiently, effectively and as promised.

If approved by San Rafael voters, the measure would increase the local sales tax by one-quarter percent, generating about $3.4 million annually, with 100% of this revenue staying in San Rafael. This sales tax would be paid for not just by San Rafael residents, but also those who work, visit and shop in San Rafael. Purchases such as groceries, prescription medicine and other essential purchases are exempt from sales tax.

Funding from a potential measure would support essential city services, such as:

  • Providing disaster and health emergency preparedness – Paramedics, Fire Department, Emergency Operations Center response to emergencies. General elements of emergency preparedness include, mitigation, preparedness, response, and recovery.   
  • Maintaining 911 emergency response times – ensuring quick response times to 911 calls from the time the call hits the Dispatch Center to the time it takes to arrive to the scene.
  • Repairing potholes and enhancing city streets – ensuring that streets are paved and there are no hazardous potholes inhibiting vehicles from travelling on San Rafael streets.
  • Maintaining city parks and playgrounds – ensuring City parks and playgrounds are in usable condition, the fields are being maintained frequently, and remain safe for the community.
  • Maintaining services and programs for youth, families and seniors – ensuring our community has access to libraries,  recreational programs, and other community facilities.
  • Maintaining crime prevention programs and services – this refers to more community-based efforts, such as, Camp Kuga (formerly known as Camp Chance) to help at-risk youth create better opportunities, neighborhood watch, etc. Visit SRPD’s website for more information on these programs.
  • Maintaining local services to help address homelessness – these are initiatives to help low-income families and those in need of housing. Please visit the City’s Housing and Homelessness website for more information and resources.

The City of San Rafael recently commissioned a survey of local residents that measured 64% support for increasing the local sales tax rate to help preserve city services. On July 20, 2020, the San Rafael City Council unanimously voted to place a measure on the November ballot that would increase the local sales tax rate by one-quarter percent, for nine years, to generate $3.4 million per year of locally controlled funding for city services.

The City is committed to ensuring citizen safety as we face these challenging times. The City has implemented budget cuts in every department in the City of San Rafael. Greater needs and fewer staff resources available could lead to cuts in areas of homelessness initiatives, our Climate Change Action Plan, library hours in our three library branches and recreation programs for youth, families and seniors at our community centers. Additionally, city maintenance projects such as resurfacing of streets, sidewalk modifications and improvements to outdated park structures and public restrooms could be impacted.

To meet our financial challenges, there are a number of efforts and programs we have implemented to reduce expenses and increase revenue, including:

  • Hiring Freeze – A hiring freeze has already been instituted which will result in approximately $1.4 million in savings annually.
  • Mandatory Furlough Program – The San Rafael City Council has approved a mandatory furlough program for non-safety employees which is expected to save approximately $700,000 this year.
  • Voluntary Retirement Separation Program – The San Rafael City Council also approved Voluntary Retirement Separation Program which results in on-going salary and benefit savings to the City by not filling the vacant positions or restructuring around the vacancies. This program yielded approximately $586,000 in savings.
  • Voluntary Work Hours Reduction Program – This program will depend upon the number and position of the employees participating and would lower that employee’s base annual pay for a period of time.
  • Emergency Reserve – Following the Great Recession, the City has been able to build its Emergency Reserves from less than 3% to meet its policy of 10%. While a reserve figure of 15% or 20% would be optimal, the City Council agreed to reduce our reserve by a total of 5% (bringing it to 5%) through Fiscal Year 20/21.

Even with the above reductions, an additional $4 million is needed to meet the anticipated revenue losses. These additional budget reductions will significantly add to the negative impacts on city services.

For context, revenue reductions of this magnitude represent roughly the equivalent of:

  • San Rafael’s entire Department of Public Works Budget for one year;
  • Two-thirds of San Rafael’s Fire Department Budget for one year; or
  • One-half of San Rafael’s Police Department Budget for one year.

In addition to the health impacts of COVID-19, the restrictions put into place through the public health order have taken an unprecedented toll on our federal, state, and local economy. Economists are predicting cities such as San Rafael who are heavily reliant on sales tax, transaction and use tax (TUT), and transient occupancy tax (TOT) will endure the hardest financial hit.

As of April 30, 2020, it is preliminarily projected that over the next 16 months, the City will experience reductions in revenue in the range of approximately $11,790,000, which is 15% of the City’s General Fund budget. The breakdown of this financial hit is as follows: 71% of the revenue reductions are due to loss of sales tax and TUT, 10% is attributed to TOT, 6% is attributed to business licenses and the remaining 13% is an accumulation of several smaller revenue generating sources.

San Rafael strives to enhance the quality of life for all residents and to provide a safe, healthy, prosperous and livable environment in partnership with the community. Important priorities include safe neighborhoods, active community centers for our youth and seniors, emergency response services and providing social services to support our most vulnerable populations. These essential city services make San Rafael a desirable place to live, work, do business and retire.

Yes, the City welcomes any opportunity to work with neighboring jurisdictions. Please refer to page 56 of the June 15th Staff Report on the City’s Fiscal Year 2020-21 Budget for a full list of San Rafael’s shared services and partnerships with other government agencies. 

In April 2020, the City launched the San Rafael Small Business COVID-19 Disaster Relief Fund to help small businesses struggling to maintain cash flow during these unprecedented times. Please visit the fund’s website for more information. In addition, in conjunction with the San Rafael Chamber of Commerce and the Citythe San Rafael Business Improvement District (BID) spearheaded a weekly initiative to support downtown restaurants by closing down Fourth Street, so these restaurants can utilize the parking spaces, sidewalks, and roadways to place tables and chairs to serve customersOriginally intended to occur on Thursday nights, this program is now extended to both Thursday and Friday nights! Visit the BID’s website for more information. Additionally, the Marin Recovers website has more information on a plan for a safe and scaled reopening of Marin County. 

Yes, the sales tax will apply to product deliveries. The proposed tax is a Transaction and Use tax. Meaningit is applied on all goods delivered to San RafaelFor example, Golden Gate Transit were to purchase buses from Mississippi to use in San Rafael, San Rafael would charge an additional $0.25 per $100 tax on the buses. 

If the sales tax measure were to pass on the November 3, 2020 Election Ballot, then the Citizen’s Oversight Committee will be established. Similar to the Measure E Oversight Committee for Essential Facilities, this will be a committee that meets conducts an annual review on the proceeds from this sales tax measure to make sure they are being spent appropriately.  

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