First, the process was problematic. Last June, the Davis City Council was told by City Manager Steve Pinkerton of the impending and growing structural deficits. At that time, there was brief discussion about the need to pursue a tax measure, but for reasons that still do not make a lot of sense, the council really did not start this discussion in earnest until December.
The timeline for placing it on the ballot meant that when the council approved the sales tax on February 11 that was the last possible date to act and still get it on the ballot. Due to state regulations on taxes, if they missed that timeline, they would have to wait until June of 2016 to proceed.
As we have discussed, the council made after midnight decisions on the “ask” – how much of a sales tax rate we would put on the ballot – as well as the fact that there would not be an advisory measure on the ballot to let the voters express the purpose of the tax increase.
How sloppy was this process? The ballot language itself was practically unintelligible and after a number of complaints, the council this past week had to spend time to clean up the ballot language.
My bigger concern is not with the sloppiness of the process but the mechanics of it. The council reduced the tax rate from three-quarters to a half cent. By going with a revenue measure that only raises about $3.6 million of the needed $5.1 million (which we had all agreed was actually far too low), the council has once again pushed off the discussion and the placement of funds needed for road repair for at least six more months.
This reduces the amount of money going to roads from about $2.5 million to $1 million. Yet again, maintenance on roads are deferred.
The council believes it will put a parcel tax on the ballot in November to cover those infrastructure needs. The council has – as Councilmember Lucas Frerichs pointed out – not done any polling. They somehow believe they can get a revenue measure through with a two-thirds vote requirement after raising the sales tax and after raising water rates.
I have serious concerns as to whether the council is going to be able to get two tax measures passed. At least had they left the tax rate at 0.75 percent, we would know we will have annually $2.5 million for roads. That may not really fix the problem, but at least it is sufficient resources to prevent the problem from getting worse.
During the run-up to the tax measure, I made it very clear that my support for the tax measure would heavily depend on the degree to which the council could commit that new revenue generated by the sales tax would go to structural shortfalls and deferred maintenance, rather than to increased employee compensation.
There is a history here, as I have recounted many times – in 2004 the council passed a half-cent sales tax that was supposed to keep parks open and prevent the city from having to lay off city employees. Somehow, though, the council turned around in 2005 and gave away the store. The firefighters got a 36% salary increase and other bargaining units got 15 to 18%.
The city has limitations on what they can do with a general use tax. The city cannot bind itself to spend the money a certain way, because that would require that the vote be two-thirds.
I pushed for the council to reconsider their approach. They had until March 11 to pull the sales tax measure off the ballot. I would have preferred their putting it all into a parcel tax where every cent of money could have explicitly been assigned, all the money they needed could have been collected, and they only had to go to the well once.
I got no traction on that and considerable push back. I can state unequivocally that there is no appetite in City Hall for additional cuts that would be required to postpone the tax from June to November.
In a few weeks, we are going to see the list of cuts if the sales tax measure does not pass. It will be ugly. There will be at that point little discussion and no way to avoid huge cuts to services.
As I analyze the situation now, I realize that the perfect solution cannot become the enemy of the lesser of the evils. I thought we could get a better tax measure if we waited and I still have concerns that two taxes on the ballot will mean that we do not deal with the very troubling problem of roads down the road.
However, as I analyze the situation in an all-cuts scenario, more staff cuts will mean serious reductions in services – especially to parks and city events. Those may not be core services, but they are part of what make Davis what it is.
I would rather keep the current level of service and take a chance that we can get a second tax passed in November.
My problem was never the sales tax increase per se. We are still talking a level of tax increase that isn’t going to make much difference to people’s bottom line. You are talking about an extra half cent on the dollar, an extra five cents on the ten dollars, 50 cents on the $100, $5 on the $1000 and $50 on the $10,000. Even if you spent $1 million on taxable products in Davis, you are still only talking about $5000 in additional taxes, you’re just not going to notice this.
My worry remains the same, however, in that putting two taxes on the ballot may well mean that we won’t deal with the roads issue down the line.
The roads are a bad issue, but as I noted earlier this week, roads can continue to deteriorate in Davis for another five to seven years before they get to the point where all of the roads look like Olive Drive.
At that point, we just end up like your typical east coast city where only the major arterials get fixed. We can survive with bad roads. However, that is not really the ideal scenario. If we wait too long to fix them we will never, ever catch up.
We will end up with most of the town looking like Olive Drive. At the same time, we have plenty of folks driving on Olive Drive. This isn’t a world-ending scenario, it will just mean that the car repair shops will do quite well.
The bottom line, given what most people in this community want to see, is we need to bite the bullet and put through the sales tax. As some have suggested to me, the $3.6 million revenue is unlikely to turn into employee compensation increases as it was a decade ago.
Unlike then, we face too large a shortfall of money in the short term and, in the longer term, the sales tax measure is likely to expire.
So, while I still do not like the process – the lack of early discussion and civic engagement with the voters, I plan to hold my nose this June and vote for this emergency tax measure.
—David M. Greenwald reporting