Transactions and Use Tax Ballot Measure
July 28, 2026
City Manager's Office
Finance Department
Misti D. Wood, Communications &
Intergovernmental Relations Officer
Scott Wagner, Chief Financial Officer
City Council
July 28, 2026 Transactions and Use Tax Measure
1 Introduction
This presentation will cover:
• Budget overview
• Community feedback
• Proposed ballot measure
July 28, 2026 Transactions and Use Tax Measure
2 General Fund Services
Police Fire Public Works Planning and Economic
Development
City Manager’s Office
City Attorney’s Office Finance Parks Recreation Human Resources July 28, 2026 Transactions and Use Tax Measure
3 Voters approved Measures EE for
general business taxes and FF for
TOT reform, bringing in an
additional combined $3.7 million to
the General Fund
Nov. 2024
Mid-year budget cuts resulted in $4
million in ongoing costs including
19.0 FTEs and $9.2 million on one-
time funding
Jan. 2025
Adoption of FY 2025-26 Annual
budget included an additional
reduction of $11.8 million, including
34.0 FTEs
June 2025
City council approved restructuring
CalPERS unfunded liability payments,
resulting in $28 million in cost
avoidance over the next 5 years
June 2026
Adoption of the FY 2026-27 annual
budget included and additional
reduction of $9.9 million including
29.0 FTEs
June 2026
Corrective Actions Taken
July 28, 2026 Transactions and Use Tax Measure
4 General Fund Deficit
• The General Fund remains in a deficit even with major interventions over 3 fiscal years.
Revenues
Transfers In
Total Revenues & TI
Expenditures
Transfers Out
Total Expenditures & TO
Surplus (Deficit) ($10.0)
$240.7
($7.8)
$244.0
258.5
($23.3)
2.6 $245.1
250.1
9.4 $259.5
($14.4)
9.6 $268.1
FY 30-31
$242.1
2.6 9.5
FY 26-27
$224.7
8.2 $232.9
231.3
$231.3
2.6 $236.1
2.6 $238.8
242.1
9.2 $251.3
($12.5)
$234.0
234.3
9.6 $242.4
$244.8
FY 27-28 FY 29-30FY 28-29
General Fund vs. Other Funds
July 28, 2026 Transactions and Use Tax Measure
5 July 28, 2026 Transactions and Use Tax Measure
6 Budget Challenges
• Like many California cities, the City's generalfund departments are experiencing increasing and uncontrollable costs to deliver core services.
• Santa Rosa is more dependent on sales taxes than similar agencies due to unchangeable structural issues
• City only retains 11.7% of Property Taxes while neighboring agencies retain up to 20% due to Proposition 13
• Sales Tax Collections were $2.1 million less in FY 2025 than three years earlier
• The City does not retain all sales tax from online sales and loses revenue to the warehouse fulfillment location
• Changes in consumer behavior towards non-taxable transactions and online sales is forecasted to continue
July 28, 2026 Transactions and Use Tax Measure
7 Current Tax Revenue
July 28, 2026 Transactions and Use Tax Measure
8 Sales Tax
July 28, 2026 Transactions and Use Tax Measure
9 Community Engagement
The City is conducting significant community engagement to understand our community's priorities and help address the budget crisis:
• City Manager's Budget Working Group (formed August 2025) • Sounding board and resource
• January resident survey
• Let's Talk, Santa Rosa community engagement initiative • Over 2,400 survey responses
• 14 meetings and presentations complete, more scheduled • June resident survey
July 28, 2026 Transactions and Use Tax Measure
10 June 2026 Survey
Top Priorities
July 28, 2026 Transactions and Use Tax Measure
11June 2026 Survey
Over Half See Need for More Revenue
4.9% Margin of Error
53% of respondents believe the City has a great need or some need for additional funding. 35% believe the City has a little need or no real need. 12%, shown in grey, are undecided.
July 28, 2026 Transactions and Use Tax Measure
12 June 2026 Survey
Potential Ballot Measure Viability
55% of respondents indicated support for a measure, increasing to 62% when including those leaning towards yes.
4.9% Margin of Error
July 28, 2026 Transactions and Use Tax Measure
13 Budget Limitations and
Community Priorities
• The City recently reduced budgets for fire, police, and other services.
Without acting, more cuts are coming.
• The City may need to eliminate 42 positions in FY 2027-2028 and 92 positions by FY 2030-2031.
• Impacts to core services next year include:
Fire station closure(s)
Elimination of police violent crimes teams
Reduced maintenance of streets, parks, and streetlights Elimination of recreation programs
• Without additional revenue, the City will not be able to meet our community's expectations.
July 28, 2026 Transactions and Use Tax Measure
14 Proposed Sales Tax
• Reauthorize the existing voter-approved Measure Q sales tax at a 1 cent rate until ended by voters.
• A voter-approved reauthorization of Measure Q at a 1 cent rate will allow the City to maintain core services.
• Will address the City’s budget deficit and maintain the City services community members have said are important.
July 28, 2026 Transactions and Use Tax Measure
15 Proposed Sales Tax
• 100% would stay in Santa Rosa; would not depend on county- wide allocation
• Majority would come from brick and mortar sales transactions; remainder from online sales
• Estimated to generate $46 million annually, resulting in an additional $23 million annually
July 28, 2026 Transactions and Use Tax Measure
16 Proposed Sales Tax
• A general-purpose sales tax would allow the City to fill critical funding gaps without legal restriction.
• A simple majority would be required to pass (over 50%). • The measure includes strict accountability provisions and fiscal safeguards, requiring independent audits and public disclosure of all spending. Every penny must be used for Santa Rosa.
Proposed Ballot Language
“City of Santa Rosa Community Safety/Financial Stability Measure. Shall the measure maintaining Santa Rosa’s quality of life, 911 emergency medical, police response to violent crimes; keeping all city fire stations open and public places safe/clean; fixing streets/repairing potholes; addressing homeless encampments; maintaining police, fire protection, other services, by reauthorizing the existing, voter approved sales tax at an updated 1¢ rate, providing approximately $46,000,000 annually until ended by voters; requiring audits, public disclosure, local control, be adopted?”
July 28, 2026 Transactions and Use Tax Measure
17 Recommendation
The City Manager's Office recommends the City Council (1) introduce an ordinance amending Chapter 3.30 of the Santa Rosa City Code to replace the City’s existing, voter-approved one-half cent transaction and use (sales) tax with a one cent tax, until ended by voters, and (2) adopt a resolution ordering the submission of the ballot measure to qualified electors of the City of Santa Rosa at the November 3, 2026 General Municipal Election and directing related actions.
July 14, 2026 Transactions and Use Tax Measure
18 Questions?