On Nov. 5, St. Helena voters will decide on two ballot measures that together would tax real estate sales and transfers and raise millions for the city’s general fund, which faces a $7 million deficit in the over the next six years.

City leaders have positioned the tax — which is expected to raise about $4.8 million annually — as a way to offset expected budget shortfalls in coming years.

Measure A1 would allow the city to become a charter city, which would legally allow it to enact such a tax. The second, Measure A2, would enact the tax.

If either measure fails to garner a simple majority of votes, the tax will fail.

The tax would be applied upon change of ownership, taxing a percentage of the sale price. This would involve:

• A 1.5% tax on real estate sales of $1 million to $5 million.

• A 3% tax on sales over $5 million.

• An exception for sales less than $1 million, as well as transfers by will or inheritance.

The city is currently using its reserves to cover deficits as expenses have exceeded revenues starting in 2022. Current city general fund spending is expected to reach $21.5 million, with revenues at $18.7 million. dollars.

To cover the deficit, the city is using $2.8 million of its $9.5 million in reserve funds. But small deficits would persist for at least the next six years, city officials said in March 2023. City staff estimated a long-term deficit of at least $7 million.

However, according to long-term financial forecasts from financial consulting firm Baker Tilly, the deficit would widen if the city proceeds with plans to invest in underfunded infrastructure and municipal staff needs, such as salaries. competitive.

Tax needed to face budget reality, city leaders say

St. Helena City Manager Anil Comelo previously said the city decided the measure was “the best of the worst options” to generate needed revenue after the city studied the issue last year.

Other possible fundraising or cost-cutting options included the possibility of developing new hotels in the city, selling excess properties, implementing a tax on library parcels, or removing the library altogether. the Saint Helena Public Library.

Council members, when they put the measure on the ballot in June, acknowledged the tax would impact the community.

Council member Eric Hall said at the time that it was “very unfortunate for our community to have to go through this.”

However, the city council said this was necessary to address the city’s long-term financial situation.

An official argument filed in favor of the tax said the revenue would help the city address long-standing infrastructure problems involving roads and sidewalks, maintain parks and libraries and address the rising cost of services public safety.

As a general tax measure, the city would be able to freely distribute revenue during its budget process.

No official arguments have been filed against either measure.

You can reach staff writer Edward Booth at 707-521-5281 or [email protected].