Sunday Commentary: My Half-Cent Thought – Much Ado About Nothing

sales-tax-receiptThe city of Davis is in fiscal crisis the likes of which we have really not seen before and, frankly, the extent to which we still do not really understand.  If people want to argue that the sales tax is not a solution to that fiscal crisis, I might have some sympathy.

But this half-cent thing is a game and it is a waste of the city’s time and resources to have to go to court to fight the use of a description that not only is in common use, but has been in effect and on the books for the last decade.

It is one thing when Jose Granda and Thomas Randall challenge the city in court, it’s another thing when Bob Dunning, carefully splitting the hairs, takes up their cause.

As Mr. Dunning notes, the petitioners seek to remove Measure O from the ballot “on the grounds that it contains false and misleading statements to be presented to the voters.”

Bob Dunning writes that “’false’ and ‘misleading,’ of course, are loaded words that sometimes hint of malfeasance. In the instant case, it can reasonably be argued that some of what will be presented to the voters is indeed ‘false,’ but it’s unlikely that anyone will actually be misled.”

Mr. Dunning argues, “There is a substantial difference, even if the terms do tend to be used interchangeably.”

He further noted: “With a half-cent sales tax, presumably, one half-cent is added to your bill, no matter how large the total. With a half-percent sales tax, half a percent is added to your bill, meaning an added 5 cents on a $10 purchase and an added 50 cents on a $100 purchase.”

He adds, “No doubt, the City Council meant to say ‘half a percent,’ but the problem here is that it’s too late to clean up the language and still have the measure on the ballot come June 3.”

I have become an apologist, apparently, for the city’s sloppiness, or perhaps a different “David” is referenced in his column when he writes, “My friend David went so far as to tell me there is ‘absolutely no difference’ between a half-cent sales and use tax and a half-percent sales and use tax, which is just plain silly.”

He goes on to argue that Mr. Granda is technically correct but casts doubt on “whether a Yolo County Superior Court judge will see it Granda’s way.”

He adds, “The city will no doubt argue it’s universally accepted that when it comes to taxes, the term ‘half-cent’ is understood to mean ‘half-percent,’ and that no city anywhere in the great state of California actually charges a flat sales or use tax that is not based on a percentage of the whole.”

One of our readers argued, “But why not word the ballot correctly? It doesn’t matter what people should know, it matters that it’s worded correctly in the first place.”

The city may also point to past verbiage of the statute.  In 2004, the ballot asked “Shall the city of Davis impose a one-half cent sales tax?”  In 2010, “Shall Ordinance No. 2353, which would authorize the City of Davis to continue to collect a one-half cent sales and use tax for general government purposes through December 31, 2016, be adopted?”

So it seems that the ballot language simply repeats the language from 2004 and 2010.  The legally standard wording here is both FALSE and MISLEADING, not technically incorrect or, in this case, not so much incorrect as incomplete.  The sales tax is an additional half-cent on the dollar, or half a percent.

Mr. Dunning then enters into evidence his spring break hotel reservations in Anaheim, where he argues two taxes are added to his bill, one of which is a “0.10 per room per night” tax that comes in at 10 cents.

The first tax he cites is the Anaheim hotel bed tax which is 17.00 percent.  It is not clear what the 10 cents is and whether it is a tax, but neither of these are sales tax measures.

Bottom line from our perspective is that, while a half-cent sales tax is probably not the most precise language, it is in common usage, it is the controlling language for the tax for the last ten years, and no court is going to overturn it.

These issues are distraction from the real dialogue that we need to have in this community.  We have not seen the cut list for what the world in Davis will look like if Measure O fails just yet, but it is going to be ugly.

We are going to face the closure of parks, the closure of greenbelts, the cutting of city services.  There are people who believe we need to do just this, or that there are other approaches to closing the deficit.  That’s fine, we can debate those, but not if we are hung up on semantics.

This year we are going to need to have discussions on the sales tax and the parcel tax that is coming in November to finance roads, parks, and other infrastructure needs.

We are going to be discussing the development of Mace 200, Nishi, the Binning Tract, a Hotel Conference center and other economic development.

We can have honest and robust discussion or we can try to use technicalities to force the sales tax measure off the ballot and divert the discussion in unfruitful ways.

You can call me an apologist for the city’s sloppiness or simply someone who doesn’t what to miss the forest when looking at the individual trees.  The stakes are too high to get diverted into side discussions.

There are plenty of problems I have with this proposal – the failure of the city to engage the public following the June 2013 announcement of the increased structural deficit, the late hour decision to reduce the size of the sales tax from ¾ to ½ cents, the failure of the city to attempt to tie their hands on where the money from this goes, and the questionable nature of going after two taxes in one year.

Those are REAL issues and the funny thing is none of the people now complaining about the wording of the sales tax ballot were discussing these issues at the time.  But we have all along, and have pushed the city for six years now to fix the fiscal mess.

Want to know about deception?

In the argument in favor of Measure P (2004) on the ballot the signers that included Lois Wolk (Assemblywoman), Helen Thomson (Supervisor) and then-Mayor Susie Boyd argued:  “The City faces increasing costs.  We will face higher expenditures if we are to provide the additional police protection and meet park and recreation and open space commitments we have made to our citizens.”

The argument continues, “Without Measure P revenue, given the uncertain state support to the General Fund, we would be faced with very deep service cuts in police, fire, and parks.”

What they did not say was that the money would go largely to increased salaries, particularly for fire who, in April 2006, were retroactively given an annual increase in compensation of 8.46 percent per year, or 34 percent over the course of their four-year contract.

While the city sold the public that this would pay for additional police protection, it actually went for increased salaries, and fire got by far the largest increases in salaries.  And while they billed it as a way to meet park and recreation commitments, in fact, we had to pass a parks parcel tax just two years later because we had used the entire sum to pay for employee compensation.

That is the real story of the last decade and a big reason why we are being asked to pass this new measure.  Maybe we should be talking about that rather than whether this should be billed as a half-cent or a half-percent sales tax measure.

—David M. Greenwald

About The Author

David Greenwald is the founder, editor, and executive director of the Davis Vanguard. He founded the Vanguard in 2006. David Greenwald moved to Davis in 1996 to attend Graduate School at UC Davis in Political Science. He lives in South Davis with his wife Cecilia Escamilla Greenwald and three children.

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9 Comments

  1. Day Man

    Dunning’s recent record weighing in on legal issues isn’t stellar, so I’ll leave it up to attorneys to determine what is “technically correct.” I’m generally with you on this one, David.

    As you say, it’s certainly true that the lawsuit is a game and a last-ditch effort to derail the tax. Clearly it’s not really about a concern that voters will be mislead by cent vs percent. But is that so wrong? Is it wrong to file a lawsuit trying to stop something based on a technicality? If the person filing suit passionately believes that the thing should be stopped, can you blame them for using every (legal) tool at their disposal?

    As I’ve written here before, I’m voting yes on the tax, so I’m not rooting for these guys at all. But if this were a different issue, and I were passionate about stopping something, I think I would grasp at technicalities as well.

    1. Davis Progressive

      you seem to accept that it’s technically incorrect whereas doing a quick google shows that the two are used interchangeably.

      so i think you have to look at:

      1. are people mislead?

      clear answer: this language has been on the books for a decade. no one challenged it previously – not even dunning.

      2. is there an intent to mislead?

      clear answer: no.

      3. is it technically incorrect?

      clear answer: unsure.

      so i think people who oppose the sales tax should do it on the merits. i find it ironic that in this case and in the water case, the fiscallly conservative people are the ones driving up city costs.

      1. Day Man

        I agree with your points 1-3, and I agree that the two seem to be used interchangeably (and so I strongly strongly suspect that this suit will go nowhere). And yes, I see the same irony – yesterday I commented on David’s article “Just for humor’s sake, I propose a small tax increase to fund the city’s defense of silly lawsuits.”

        But I’m not sure that it follows that people who oppose it must only do so on the merits. If a brothel were to be constructed next door to my house, and the city and most of the population was A-OK with it, I wouldn’t hesitate to use CEQA to stop it, even though my concern about the brothel has nothing to do with environmental quality. That’s not really about the brothel’s merits.

        1. Davis Progressive

          there’s nothing wrong with using a process to stop something you find objectionable. this is a technicality however at most, and i’m not even sure it rises to that level.

  2. Tia Will

    Day Man

    “But is that so wrong? Is it wrong to file a lawsuit trying to stop something based on a technicality? If the person filing suit passionately believes that the thing should be stopped, can you blame them for using every (legal) tool at their disposal?”

    I would not consider it wrong if they were willing to pay completely for the cost of their lawsuit thereby reimbursing the taxpayers of Davis for the money needed to counter their claim. I do consider it wrong to file suits one after another as these two gentlemen have done knowing that it costs the taxpayers money to defend against their suits all the while claiming that they are doing this on the taxpayers behalf. I also would have no problem if they told the truth and said that they were filing the suits because of their own belief systems and left the “taxpayers” well being out of it entirely. I never have a problem with honest promotion of one’s genuinely held beliefs. I have a great deal of problem with implying that you know what the majority of “taxpayers” want and are acting on their behalf.

  3. Davis Progressive

    i just want to add, i find it really odd that dunning weighs in on these little peripheral issues and not once has he written about unfunded liabilities, roads, opeb, pensions, or the deceit of the firefighters.

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