photo credit: Courtesy of the City of Sebastopol
A screenshot from the city's website page explaining Measure U.

The city of Sebastopol is still waiting on word from Sacramento to put a pair of November tax measures into place as intended. But a creative agreement with Sonoma County is keeping the cash flowing.

When Sebastopol voters passed Measure U, a half-cent sales tax, and Sonoma County voters approved Measure I, a quarter-cent sales tax, in the November 2024 general election, a sales tax showdown was set in motion.

State tax law prohibits Sebastopol and Sonoma County from putting both in place. That would push them over the state-mandated 'combined rate' taxing cap of 2%.

California's Department of Tax and Fee Administration originally ruled that Sebastopol and the county could only collect part of Measures U and I: an 1/8th cent a piece.

It would have meant Sebastopol would collect $1.125 million of the $1.5 million dollars city staff expect from Measure U, but that the county would only generate half of the money earmarked for childcare under Measure I: $15 million instead of $30 million dollars.

So, with a little creative thinking, Sebastopol Mayor Stephen Zollman explained, "The county was gracious enough to provide the quarter cent that was in question. So we are receiving everything that we had hoped for."

That memorandum of understanding between Sebastopol and Sonoma County was agreed to in December.

Zollman said he hopes the arrangement "will continue for however long it takes in order to see if there is a revised opinion from the AG's office or we get a legislative fix."

So how does it work?

Sebastopol is collecting only half of the Measure U sales tax, but the county is collecting all of the tax from Measure I, and passing the difference, about $750,000 dollars, back to the city.

A ruling from California Attorney General Rob Bonta on whether Sebastopol and Sonoma County can have a special exception to fully charge both taxes is expected soon.

And while the city has explored a fix in the Legislature led by Assembly-member Chris Rogers and State Senator Mike McGuire, Zollman says city staff are not budgeting the extra money into Sebastopol's thin budget until they get a clear answer.

The California Department of Tax and Fee Administration tells KRCB News the status of a ruling from the Office of Attorney General Rob Bonta is still pending.