In light of COVID-19, city leaders want to know what residents think now about extending the half-cent sales tax.
A pre-pandemic survey conducted earlier this year indicated residents were in favor of keeping the tax when it “sunsets” in two years, and possibly increasing it to one cent. But on May 19, the City Council voted unanimously to conduct a “tracking poll” of residents to see if they still feel the same.
“The idea is they’re trying to see if voter preferences have changed since earlier in the year,” said City Manager Steve Salomon. The earlier poll reached 436 Orinda residents with two different sets of questions.
The exact wording of the tracking poll has yet to be determined but it will be shorter and sent to fewer people. It should be ready by August.
The tax raises $1.2 million annually for the city but due to the ongoing economic crisis caused by the coronavirus, it is expected to generate 10 to 20 percent less this year. If the tax was raised to one cent, it is projected to bring in $2 million a year. The city’s earlier poll found support for raising the tax.
The tax’s biggest generator of income is from car sales to Orinda residents. Despite the fact Orinda has no car dealers, when a car is sold to an Orinda resident the city receives the tax.
While some Orindans would like to see the money raised by the tax used to address long-standing issues such as drainage maintenance and fire prevention, it cannot be earmarked for a specific use because the money goes into the general fund.
A sales tax that goes in to the general fund only needs a simple majority to pass. A dedicated sales tax requires a two-third majority — something the survey did not predict as likely to happen.
However, that doesn’t mean a citizen’s oversight committee couldn’t be established to keep an eye on what’s done with the money.
“If the council doesn’t do what they pledge to do with the money people will get after them — especially in Orinda. People are very involved,” said Salomon.
One such involved citizen is Steve Cohn. He said the “burning issue” facing Orinda is wildfire prevention. “It has been obvious since the Oakland hills fire (of 1991),” said Cohn.
And he’s not alone. Cohn points out that in the survey taken earlier this year, 55 percent of respondents rated fire prevention as “Extremely Important” and another 31 percent viewed it as “Very Important.”
The matter is so important that Cohn advocates passing a parcel tax to fund fire prevention efforts.
“That 85 percent total probably could pass a dedicated parcel tax which could not be raided for road maintenance, as can a general sales tax,” said Cohn. “The council, in its discussion of the sales tax, never discussed anything other than a sales tax.”
Cohn said the road to better fire prevention efforts in Orinda could be through taking a closer look at how the Moraga-Orinda Fire District (MOFD) is financed.
“The city needs to know the facts behind the emergency services provided by MOFD so it can effectively discuss the issue,” said Cohn who points out that taxpayers pay $17 million, an amount greater than the Orinda general fund, to MOFD for services that only cost the agency $14 million to provide. “Orinda should have a committee or commission to understand what services it is being provided and what services it needs.”
Another idea Cohn recommends is implementing a real estate transfer tax or RETT. Emeryville and El Cerrito recently have implemented RETTs. According to Cohn, a one percent RETT on Orinda real estate transactions would raise $4 million — enough to “deal with all three of our major issues: road maintenance, storm drains, and fire prevention. Like a sales tax, this tax can only be voted on in an election year so it’s too late for this year; but not in two years.”
Another potentially appealing aspect of a RETT is that half of it is paid by new homeowners and the other half by the home seller. “The most popular tax is a tax someone else pays for and half of this tax is paid for by someone else,” said Cohn.
