The language in question is:
“There are no additional taxes involved in becoming a charter city, nor does it increase the city’s ability to raise or impose taxes in the future.”
According to Councilmember Greenwald she did not sign the ballot statement because in her view, the phrase was not accurate.
The concern here is that under a charter, a city can impose a property transfer tax which would impose a tax any time an individual moved from one home to another.
Under general law status, a city cannot invoke a property transfer tax. So the first step a city must take is to adopt a charter city. Becoming a charter city therefore removes a major hurdle towards imposing the tax.
On the other hand, neither City Manager Bill Emlen nor City Attorney Harriet Steiner agree with this assessment. As Bill Emlen pointed out to the Vanguard via a phone conversation, even if the Charter passes, the only way to impose a property transfer tax is to amend the charter by a vote of the people of Davis. That is a significant hurdle and similar to the hurdle that it would require under Prop. 218 standards for other types of taxes.
In City Attorney Harriet Steiner’s “Impartial Analysis of Measure N” she argued that Davis would “remain subject to all State Constitutional limitations.”
“… those on taxation and property related fees, such as Propositions 13 and 218. No new taxes could be imposed without voter approval.”
For those concerned about taxation, this is a key point that is formalized by the City Attorney putting it into writing. It therefore appears that by-and-large the ballot language is largely correct–for most practical purposes it does not increase the city’s ability to either raise or impose taxes in the future. It may give the city an ability to have additional means by which to raise taxes, which is I think what Sue Greenwald’s point is. However, even those additional means by which to tax are still subject to voter approval–this is the current process by which taxes can be increased now.
Councilmember Stephen Souza who signed the document along with Mayor Ruth Asmundson, Councilmember Lamar Heystek, and former Mayor Jerry Adler, said that he and co-signers of the argument “stand by the truthfulness of the Argument for Measure N.”
While I understand the point that Councilmember Sue Greenwald makes–becoming a charter makes it possible to have a property transfer tax–I think that the argument’s language is accurate. If this charter passes, it will be no easier to raise or impose taxes under a charter than it is now. The voters of Davis will still make the final determination on taxation although they may have more options to choose from in terms of the means by which taxation can be imposed.
I have not decided whether I will support or oppose this charter. I still believe I have a good deal to learn about the charter before I can make an informed decision. However, from what I have read and from those I have spoken with in the last few days, I do not believe the issue of taxation should be a determination as to whether or not people support the charter. Everything I have found indicates that the protections in place under a General Law City will remain under the proposed Charter.
That said, I do agree with Councilmember Greenwald that a property transfer tax is unfair as it puts the tax burden on those who either wish to upgrade to their “dream home” or who wish to downsize to a smaller more affordable home, perhaps later in their lives. There it puts a burden on younger families looking to get a better home and older citizens who are looking for a smaller and more manageable home as they enjoy their later years. This does not seem to be an equitable distribution of the tax burden.
Moreover, I am concerned about the burden being placed on citizens to live in Davis with the growing pressures of the city’s budget. The current salary structure and increase in budgetary allocation to upper management salaries is putting a strain on city resources. It is currently forcing the city to forestall critical repairs to roads and other infrastructure in order to balance the budget. We are going to have to pay for this imbalance either through less services, more taxes, or greater pressures to continue to develop. This does not even include the current discussion on water and the possible large increases to water rates that residents may have to face. For those worried about the cost of homes pricing people out of this community, the high taxes and high utility rates at the very least will exacerbate that trend.
However, from the perspective of this initiative on the ballot, it does not appear to change the protections that residents have against future taxes.
The question before us should examine the reasons why such a change should be necessary. Councilmember Don Saylor has been the only consistent dissenter on council on this issue. He has repeatedly questioned whether there was a reason that we need to do this right now and has termed it “a solution in search of a problem.”
Proponents have pressed for these changes out of a desire to see a Choice Voting system be implemented. Choice Voting requires the city adopt a Charter in order for it to be legal to implement. The question I think people need to look into is what the possible unintended consequences of a Charter City might be and then whether those potential consequences are ultimately outweighed by the benefits of a possible Choice Voting system.
These questions will not be resolved today, however at this point it appears that tax concerns should not be a reason to oppose a Charter City initiative and Measure N.
- To read the full Argument in favor of Measure N please click here [note: there was no argument submitted against Measure N nor is there a rebuttal to the Argument for Measure N]