Commentary: The Biggest Challenge the City Faces?

Pothole-STWith all of the complaints about the city using public resources to fund a poll, the poll lays out one clear and unmistakable fact – that the public really does not have a good grasp of the challenges that the city faces right now.

It starts with the public assessment of the more important issues facing the city – 17 percent said water quality and 13 percent said water rates. You have to go down the list to find budget, economic development, employee salaries, quality of roads and the like.

And yet, as we have laid out time and again, the city faces a crisis because there are hundreds of millions in unfunded liabilities and deferred maintenance on infrastructure and the city right now lacks a mechanism to pay for that. It lacks the funding for the pool leaking thousands of gallons of water a day. And without short term taxes and longer term economic development, the city, as we know it, will cease.

And yet, is the public aware of this?

When asked if they were aware of the water infrastructure projects being conducted by the City of Davis, “the overwhelming majority indicated that they were indeed aware of them.” That nearly 78 percent of the public was aware of the water projects is encouraging, although one has to wonder where the other 21.6 percent have been for the last few years.

That illustrates that a sustained public campaign over a few years will get most of the citizens’ attention.

Another interesting piece of the survey is that the public, while split on the municipal electric utility idea, is not opposed to it. By a 46.5 to 34.5 margin with 19 percent undecided, the respondents said “they would support the City of Davis forming a municipal electric utility and purchasing PG&E’s distribution system, [and] there were slightly more residents in favor of the idea.”

Given the controversy last spring over this and the negative drumbeat of news, that is encouraging.

However the citizens’ knowledge of the city’s fiscal system is troubling. While only 3.5 percent of the respondents thought it was excellent, 25 percent said good and 35 percent said fair. Only 23.7 percent of the voters believe that the city’s current financial situation is poor or very poor.

How can that be? The city just had to plug a $5 million structural deficit with a new sales tax. The city has a huge amount of unfunded obligations to future retirees and hundreds of millions in unfunded infrastructure needs.

People in the know are talking fiscal crisis and potential bankruptcy, but the voters think we are in good or fair shape?

Perhaps that is what is driving the answer to the next question. “Shall an ordinance which would authorize the City of Davis to impose a new parcel tax in the amount of $149 per year for 15 years on residential units and on non-residential units in the amounts to be specified in the Ordinance, to fund maintenance, repair, rehabilitation and replacement of parks, streets and roads, greenbelts, bike paths, swimming pools, and recreational facilities be adopted?”

As Godbe Research indicated, “As a test of uninformed support for a parcel tax measure to fund maintenance of City facilities, likely November 2014 voters in the City were read only a ballot question that summarized the main features of a $149 parcel tax. In response total support registered at 46.5 percent (‘Definitely yes’ 28.8%, ‘Probably yes’ 17.7%). In comparison, total opposition was at 44.1 percent (‘Definitely no’ 31.3%, ‘Probably no’ 12.8%), with the remaining 9.4 percent undecided (DK/NA). These results indicate that there is a base of support, but it is still far below the required two-thirds majority. Additionally, when the 4.3 percent margin of error is accounted for, support could be as low as 42.2 percent, or as high as 50.8 percent.”

What does this tell us? To me it tells us clearly that the public does not grasp the enormity of the problem that we face and that therefore the city needs to figure out a way to educate the public.

And the sub-polling shows that there is some room to grow. The public is more willing (although never at the two-thirds level) to support things like bike paths, parks, streets and roads, but is less than willing to support a swimming pool.

This is the point we made in an earlier column – the city has to lay the facts out to the voters because, from the polling answers, it doesn’t seem that the respondents understood the magnitude of the crisis.

As Rob White put it a week or so ago, “Davis has an increasingly poor fiscal position with respect to the City’s budget and the services it delivers.” But what this polling shows is that the voters do not understand that. They think we’re either in good shape or okay. That accounts for a stunning 60 percent of the voters. How can that be? How can their perception be so far afield from reality?

I think there are several answers to that.

First, for several years following 2008’s economic collapse, the talking point out of the system was that, while things aren’t perfect, we are in better shape than most. The economic solution was to balance the budget through attrition, furloughs and removing non-immediate spending needs from the budget – such as roads.

Second, while the local paper’s influence has indeed waned in the last seven years, it’s still the single largest source of information in the community. And, while it has covered water over and over again, the paper has rarely covered the city budget. The city budget problems have rarely been a feature story, and even more rarely covered by a certain columnist.

The truth is stunning at this point. Because if the city does not find resources – tax money through temporary tax measures and revenue through economic development, we are going to see road conditions deteriorate, swimming pools, parks and greenbelts close. The quality of life will decline.

But the city will have trouble getting either passed if 60 percent of the citizens continue to believe everything is okay and anyone daring to say otherwise is engaging in fear mongering.

So the polling should be a wake up call that the city (among others) has failed to educate the public on the reality of the situation. We have to operate from a mutually understood set of facts before we can attempt to figure out a solution to the problem.

—David M. Greenwald reporting

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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99 Comments

  1. Tia Will

    One question

    “one has to wonder where the other 21.6% have been for the last few years.”

    Around what percentage of the population could be considered new residents ( say within their first five years) of Davis ?
    I ask because I do not anticipate that a relatively new resident would have had the same opportunity to get themselves rooted sufficiently to be up to speed on local matters unless their employment has something directly to do with city functioning.

    1. hpierce

      Good question, Tia… if you assume a 3% turnover per year, and assuming the same quality of cross-section in the 2007 and current polls, ~81% of the folks now polled were not here 7 years ago. If the turnover was 6%/yr, again, around 19% new folk in last 3.5 years. Then you have to ask how many years does it take to ‘be aware’ of ANY given issue.

      1. Matt Williams

        I believe the single family home turnover is 3% per year, but I would expect that the multi-family home turnover would be significantly higher than that. So your 81% applies to the single family residents who are still here after 7 years. With 55% renters in Davis, the majority of whom are on a 4-year cycle of residence, it wouldn’t be surprising to find that less than 25% of the renters were here 7 years ago. If you average 81 and 25 you get an estimate of 53% of Davis residents who were here 7 years ago … and that may be high.

        1. South of Davis

          Matt wrote:

          > I believe the single family home turnover is 3% per year

          That sounds like the single family “sale” turnover, the single family “rental” turnover is MUCH higher.

          > With 55% renters in Davis, the majority of whom are on a 4-year
          > cycle of residence

          Few renters stay in the same place for 4-years and the average Davis rental term is probably closer to 2 years (students that start at Davis usually spend a year in the dorms and often do a year abroad or in the sorority/fraternity house, most JC transfers are out in less than two years and non-student renters are typically here for some UC related project and/or if they plan to stay will buy a place.

          1. Matt Williams

            SOD, I was being very conservative on purpose. The single family home renters are included in the 55%. If a person moves from one Davis residence to another Davis residence they don’t restart the “knowledge clock.”

  2. realchangz

    David,

    As we all know by now, it’s not just Davis where the residents have their heads in the sand. With commendations to you and the gritty, fact-based content you so often include with your reporting, very few “journalists” are either knowledgeable of or interested in either accounting or finance.

    If an investigative journalist possesses neither the curiosity nor the requisite tools to decipher and interpret the underlying issues buried deep in most government reports, the public will rarely see such information exposed. Compounding the issue is the challenge of presenting the case for meaningful reform in terms – both economic and emotional – that will capture the imagination, engage and maintain the interest of the reader. Thanks for your continued efforts to “keep it real” – unpleasant as the message may be.

    And, more importantly, thanks for the willingness to explore the decidedly upbeat opportunities available to this most fortunate community. Yes, we have challenges, but more importantly we have the assets and resources to create our own, unique path to greater personal and community prosperity.

    1. hpierce

      Dunning claims neither to be a ”journalist” nor a “reporter”… he is a “columnist”, free to write whatever he wants with as little or as much factual basis as he pleases.

  3. Anon

    Notice the question about the parcel tax included repairs to roads, pools, parks, recreational facilities. That appears to me and I suspect to most citizens as a “catchall” phrase of everything in the city but the kitchen sink. I would not have supported such a parcel tax. This is precisely why I am not in favor of wasting money on these types of generalized polls. It is a matter of how the questions were asked as to what type of response is the result. So I would not conclude from this poll that citizens are ignorant of the facts. That indeed may be the case, I just wouldn’t use this ridiculous poll as evidence of public ignorance of the city’s dire fiscal situation.

    1. Davis Progressive

      that’s the second question of course. the first is the citizens general ignorance of the fiscal conditions of the city. the parcel tax question has nothing to do with the issue of ignorance. the previous question did.

    2. Davis Progressive

      “I just wouldn’t use this ridiculous poll as evidence of public ignorance of the city’s dire fiscal situation.”

      ridiculous poll? based on what? i hear your point on the catch all, but that doesn’t make it ridiculous, those are the city’s needs.

  4. TrueBlueDevil

    Anon +1, if roads are far and away the ticking time bomb, then vote on a measure strictly for roads (and bike paths).

    Interesting that America’s Second Most Educated City is veering off into a potential ditch. Can we blame this on the Free Lunch mentality?

          1. South of Davis

            DP wrote:

            > obviously it’s not that simple a fix or they wouldn’t have left
            > it this way for apparently a long time.

            The city does not want to “fix” the pool they want a “new” ($10 million) pool… As a former pool owner I can tell you that pools are just big money pits that you have to work hard to keep clean that most (but not all) people rarely use.

            I can also tell you that they are like a big fish tank and not that hard to fix leaks (I patched cracks at the bottom paid to have goo injected in to a void around the skimmer and rented a jack hammer to get to a leaking copper filter return line under the deck).

            If Davis wanted to “fix” the leaks they could hire a leak detection firm (there really are people who do nothing but find leaks) and then any handy person with a high double digit IQ could fix the leaks.

            P.S. If we had a ton on money it would be “nice” to build a wave pool for surfing or even an indoor shooting range or a recording studio that was paid for with tax dollars, but since Davis does not have a ton of money we should tell the lap swimmers to either pay for the pool or drive to Lake Solano to swim.

            P.P.S. Is there any reason we could not let people swim in Stonegate lake if a pool closes?

          2. Alan Miller

            “P.P.S. Is there any reason we could not let people swim in Stonegate lake if a pool closes?”

            Or Lake Alhambra, or Putah Creek’s old channel, or the Lakes at North Davis Farms, or the canal that runs through Wildhorse, or Willow Slough,

            . . . or, more to the point, private swimming pools?

        1. Barack Palin

          If the parcel tax is just roads and bike paths it has a chance at $100 or less, but when all the other goodies are put in the mix I think the voters are going to give it a thumbs down.

  5. Frankly

    The budget situation for the city somewhat mirrors the state and the country in that the coming crisis of unfunded pension liabilities is pretty much ignored by the majority of the voters. Many of us less prone to denial are hoarse from shouting at the wall.

    It is really a confusing thing for me… I cannot figure out why so many people just shut down their listening apparatus when the subject comes up. I have theories…

    One theory is that people today maintain some irrational dream of early retirement with a healthy defined pension and full healthcare coverage. This is the new dream that has replaced the old dream of building and owning a successful business. The new dream is irrational because many of the people dreaming it do not even work for the public sector. There is some weird defense of the pay and benefits for public sector employees that seems to be an unwillingness to see them finally reduced to a market level because it would result in the loss of the potential windfall… kinda’ like the same defense we would see for any demand that we eliminate the lottery or gambling. While it exists there is always a chance a person can get lucky.

    My other theory is that of the legacy branded underdog worker.

    Public sector employees used to be the lower-end worker from a perspective of high performance… giving up many of the opportunities for merit-based career advancement for less competitive-stressful seniority-based pay advancement. I think that branding is so sticky that many people cannot get over it. They cannot see that their government employee neighbor is being provided a multimillion dollar retirement benefits package, while also getting paid 125% of market wages… and that the funding for this is causing the non-government employee tax burden to skyrocket while programs are cut and infrastructure crumbles due to the growing percentage of funds going to government employee pay and benefits.

    The final theory is that of politics. The state and the city are far left of center, and it is the left political party that has primarily driven government employee pay and benefits to hyper unsustainability and unfairness. And so the reliable left of center voter is just stubborn in denial because it would mean taking responsibility for past mistakes, and it would also mean some end to the political power that has derived from public-sector labor spending on left party campaigns.

    Davis is in bad financial shape in large part for these reasons… our failure to honestly and factually face the problem of out of control city employee spending. The other reason we are in bad shape is because our local economy is about 25% the size of what it should be for a city our size with the level of amenities we demand.

    Both of these things are voter education opportunities. But for the former, I think it requires some psychological counseling because the facts are clear and the information has been blasted for years… people still just deny it.

      1. Frankly

        How else do you explain the lack of majority voter outrage for the problems of unfunded pension liabilities?

        But then the MRAP “crisis” brings them out en mass.

        1. Davis Progressive

          i’ll be naive and believe that one issue is more complex than the other. it’s easy to understand the mrap issue, harder to understand unfunded pension liabilities. newspaper doesn’t help. dunning has never covered unfunded liabilities.

          1. Frankly

            So your point is that the voters are just all simple-minded simpletons incapable of understanding money issues and that only react to issues of symbolism that inflame their emotions?

            Is this the Romney 47% gaff being recast a bit differently?

          2. Frankly

            I agree. My comment was directed at DP.

            Dunning is just a scapegoat for their lack of leadership from a head-in-sand position.

          3. Davis Progressive

            i’m still a little confused, it’s okay for dunning to provide inaccurate information because he’s a satirist?

            to respond to frankly above, no my point is that voters are busy people who are not paying full attention to what goes on at city council meetings and rely on the newspaper and other sources to stay up to date. when the city fails to provide the information and the newspaper fails to cover it, we have people who have the wrong impression

          4. Barack Palin

            My question was directed at DP also. What’s funny is that you have many who post on here saying they either don’t read Dunning or that he’s irrelevant but then they turn around and want to blame him when things don’t go their way.

          5. Alan Miller

            The unfunded liability issue is a true crisis of our lifetime. It was brought about by politicians who’s reign is shorter than the time span of the results of their actions, who were thus able to give the moon to their constituents while ignoring that doing soon would cause the moon to lose it’s orbit and crash into the Earth, someday.

            As for Dunning, he’s way more entertaining than any of you who criticize him.

    1. TrueBlueDevil

      If Davis citizens voted to tax themselves $600 a year ($50 a month), wouldn’t that potentially solve 90 percent of the city’s problems? Seems like an easy solution for a pro-tax demographic (Democrats).

      I wonder how Davis stacks up to cities like Dixon, Woodland, and West Sac?

      1. Davis Progressive

        yes, if the citizens voted to tax themselves probably a quarter of that, it would solve most of the cities problems.

        “I wonder how Davis stacks up to cities like Dixon, Woodland, and West Sac?”

        the city has less tax revenue than the other cities, which is why the other issue of the innovation parks.

          1. Davis Progressive

            $100 to $150 would provide the city the revenue to take out probably a $25 million bond and have ongoing $3 to $5 million a year for roads. short term? it would be a 30 year bond.

          2. Frankly

            $100 to $150 per year in additional supplemental parcel taxes? I doubt it would pass the 2/3 vote. Maybe $75 per year at most.

            So, we better stop with the analysis paralysis on the innovation parks and get em’ built and populated.

          3. TrueBlueDevil

            So Liberals in Davis won’t even pay an extra $10 a month to libe in Berkeley East? Tish tish tish.

    2. DavisBurns

      “Public sector employees used to be the lower-end worker from a perspective of high performance… giving up many of the opportunities for merit-based career advancement for less competitive-stressful seniority-based pay advancement. ”

      What changed is the private sector wages and benefits fell, especially with the hostile takeovers and the looting of pension funds when companies were allowed to declare bankruptcy and use employee funded pension funds to pay off liabilities, then, as a reorganized company, to continue business as usual. This happen to my father-in-law and it is standard operating procedure. They were saves from property by the pension my mother in law got from working for the phone company for just 15 years while her husbands 30 years pension was wiped out.

      I think Frankly believes that is just what we should do to solve our budget problems. But my point is, public workers salaries and benefits aren’t too high, the private sector which we use for comparison has changed the game. Now the push is on to apply the same sharp pencil (or scalpel) to public employees.

      1. Frankly

        You are using some personal history of unfortunate financial luck of one family member to justify unsustainable over-spending that will lead to inevitable unfortunate financial facts for many. I don’t see how that is a rational position.

        91% of our nation of workers works in the private sector.

        1. TrueBlueDevil

          I believe the Chief of Police of San Francisco retired on over $300,000 per year, yet in her last years as COP she didn’t even have a valid permit to carry a firearm.

          1. TrueBlueDevil

            An example of government politics, and over payment to a leader who can’t even keep her credentials up to date.

        2. DavisBurns

          My father in law wasn’t alone then, nor is he now. It is standard operating procedure in bankruptcy. From Forbes magazine 2013
          “While it might be moral or equitable to protect already-earned pension benefits during a bankruptcy, bankruptcy law allows pensions to be reduced or eliminated.
          Many American companies have gone through bankruptcy, reduced or eliminated workers’ pensions, and then emerged from bankruptcy to continue operation. Delta Airlines is one recent example; its pilots lost millions in promised pensions. In such cases, the federal government’s Pension Benefit Guaranty Corporation steps in to provide much smaller pensions, but workers are still big losers in such actions.”

          1. South of Davis

            Davis Burns wrote:

            > workers are still big losers in such actions.

            Most people wearing the blue hat keep wanting to point out that many business have screwed workers, but forget that it just has not happened to many city workers YET.

            Hostess went BK because they had a crappy products that less and less people want to buy and Detroit went BK because it is a violent depressing city that less and less people wanted to live in (more successful companies with pensions and more successful cities with pensions like Davis will just take more time before they go BK).

            It is BOTH the public and private sector that are doing funny math with pensions and since almost all of them (including the biggest Social Security) are Ponzi schemes they will ALL end up paying reduces benefits.

            If workers (both red hat wearing and blue hat wearing) don’t want to be “big losers” they need to break out the 8th grade math books (or maybe even an accounting 101 text) and realize that without BIG changes there is no way everyone is getting paid.

            It is not a “political” problem it is a “math” problem:

            http://www.pensiontsunami.com/

          2. Frankly

            Exactly. It is a math problem.

            And it is easily explained this way.

            1. People live longer.

            2. Health care costs have skyrocketed.

            3. The global information economy, technology advances in automation, a growing crappier education system, terrible US federal and state government economic policy that has been hijacked by extreme environmental policy, and mostly unchecked immigration… have all combined to result in too slow economic growth, too few good jobs, and depressed wages.

            And public sector labor unions and their political beneficiaries have just ignored all this, and they also ignored the true accounting thinking they could just keep going back to the tax and spend feeding trough for yet another tax increase… and instead of reducing pay and benefits like they should have, they did the opposite… they inflated both. And that inflation is just another bubble that will pop.

            And when it does, the impact to retirees will pale in comparison to the sad stories conveyed by DavisBurns.

    3. Topcat

      Frankly wrote: “It is really a confusing thing for me… I cannot figure out why so many people just shut down their listening apparatus when the subject comes up. I have theories…”

      In my experience most people live in the present and don’t give much thought to what might happen in the future. In economics this is called “present bias”. This is sometimes called the immediacy effect or temporal discounting. As a result the present self will care too much about herself and not enough about her future selves. The self control literature relies heavily on this type of time inconsistency, and it relates to a variety of topics including procrastination, addiction, efforts at weight loss, and saving for retirement.

      In the public policy arena I think that most people just figure that somehow things will work out if we ignore the problems.

      1. Frankly

        “present bias” sounds right. And then I wonder if Darwin was right because apparently we are not very far evolved from a time when all we could focus on was the present.

        I use the analogy that a person pushed from the top of a skyscraper starts flapping his arms and says he is fine.

  6. Barack Palin

    Is it really all that surprising that “the public really does not have a good grasp of the challenges that the city faces right now.” A large number of Americans have no clue or even care about politics or finances.

    Here’s a survey where simple constitutional and other questions were asked:

    “The questions that Americans could not answer went from the more challenging – how many justices are in the Supreme Court? (63 per cent did not know) To the most basic – who is the Vice President of America? (29 per cent did not know)”

    “six per cent don’t even know when Independence Day falls”

    And to think they get to vote.

    http://www.dailymail.co.uk/news/article-1368482/How-ignorant-Americans-An-alarming-number-U-S-citizens-dont-know-basic-facts-country.html

        1. Frankly

          LOL.

          I have a bumper-sticker that reads “If this is what smart looks like, please bring back stupid!”

          But on the serious side… I think there is a percentage of this problem that is political. The Democrats have earned the lion’s share of responsibility for the problems of bloated city labor costs.

          And it is actually the Democrats that would have to fix the problem by working to turn back the clock on city employee pay and benefits.

          I find it laughable when I hear/read this demand that we stop being partisan… as if any Republican of conservative has even a shred of influence in fixing this problem. They do not.

          Unfortunately, previous Democrats knowing that this day was inevitable, wove in legal impediments to being able to turn back the clock. Hence Vallejo, San Jose, Stockton, San Bernardino, etc.

          If you take the trend line out… it is clear that most cities, the state and certainly the federal government are all eventually going to implode from their self-induced financial pressure from all the unsustainable labor costs. The problem is just being kicked down the road to our kids. The only justice is that the kids are voting for the people saddling them with these problems. But in some of their defense, they have been brainwashed with liberal orthodoxy from the education system and since that fog usually does not lift until they start working for a living and paying taxes… the Obama jobless, non-recovery has locked more of them into a position of not really knowing what is good and bad for their own future.

          And so from a local level perspective, more jobs in our community is going to help us have a greater chance to stop that trend line from leading us to eventual city insolvency and bankruptcy. Both the tax and fee revenue from the additional business activity, and the lifting of the youthful voter education system brainwashing fog…from them working and paying taxes… will help us address and tackle these problems that we otherwise would not have the will to tackle.

          1. Don Shor

            And it is actually the Democrats that would have to fix the problem by working to turn back the clock on city employee pay and benefits.

            A majority of the city council members now are not registered Democrats.

          2. Frankly

            Three out of five, and I assume they are registered independent. And it remains to be seen if they can effectively turn back the clock on the over-compensation problem. I remain pessimistic.

            Interesting too that much of our city and county business challenges have been brought on by reduction is state contributions or increases in state collections that are, in fact, the result of overspending on state employee pay and benefits. And again, that is a problem that only state Democrats can solve.

          3. TrueBlueDevil

            A friend’s son, who had minimal job experience, landed a job with the State after college. After a few years, he is now a manager in his mid 20s. He and his family are hard-core liberals, yet it was so interesting to hear him tell stories of the incompetency in government.

            When the State had the budget problem he relayed how they had to lay off more capable, quicker, faster temporary workers, while mindful of the edict from Jerry Brown, “Protect the union workers”. The union workers tended to be older, not technically savvy, and extremely slow.

          4. DavisBurns

            Frankly, the fiscal mess cities in California find themselves in is due to the rabid republican Howard Jarvis tax insanity which started with Prop 13. Before Prop 13, cities were solvent. What most people do not know it the big losers are the communities they live in and the windfall winners are businesses who get the same tax benefits as the homeowners it was meant to help. Business manage not to sell their property so it doesn’t get reassessed at the current market value–home owners don’t have the same options. We could modify Prop 13 to exclude business, but they have the money to prevent it. I rarely find anyone who is aware that prop 13 extended beyond homeowners. I call it a republican tax avoiding business scam.

          5. South of Davis

            DavisBurns:

            > Frankly, the fiscal mess cities in California find themselves
            > in is due to the rabid republican Howard Jarvis tax insanity
            > which started with Prop 13. Before Prop 13, cities were
            > solvent.

            Don’t forget we were not feeding illegal aliens (and anyone else that wants it) FREE lunches at school or paying the average firefighter over $100K back when prop 13 passed (or let them retire at 50 with a $100K + Pension and $25K in health care for the entire family). California does not have a income problem it has a spending problem. After taking about 10% of most peoples income off the top (top CA rate is 13.3%) the state then takes in (despite prop 13) MORE property taxes than any other state (way more than the pre prop 13 amount adjusted for inflation).

            > Business manage not to sell their property so it doesn’t get
            > reassessed at the current market value

            A very small percentage of “business” own their real estate (if you don’t believe me walk around Davis asking business owners or go to any mall, or even ride the elevator of all the office buildings in SF asking the thousands of business if they own the place), but almost every business owner pays the owners taxes with a “triple net” or “modified gross lease”. If property taxes go up business have to either charge higher prices (I would be surprised if even a single restaurant or coffee shop in Davis “owns” the building they are in), move to a state with lower rents or close and fire everyone…

          6. South of Davis

            P.S. I forgot to add that if anyone has any money left over after paying the California Income Tax, California Property Tax, Local Parcel Taxes, Car Registration Taxes, Gas Taxes, Bike License Fees, Dog License Fees, Fishing License Fees, that you get to pay State and Local sales tax of about 8% on average (and as high as 10% in some California cities)…

          7. Frankly

            Business manage not to sell their property so it doesn’t get reassessed at the current market value–home owners don’t have the same options.

            What are you talking about? Your primary residence appreciate is completely tax sheltered from capital gains up until you sell it and don’t replace it with another residential purchase for the same or greater value.

            And then there is 1031 Exchange rules to shelter your investment properties.

            Of course this wall all inconsequential for many people in the pre-Prop 13 days because they would lose their homes simply because they could not afford their property tax bill that kept increasing.

            But hey, why worry about kicking those poor fixed income grandmothers out of their homes that they lived in for 40-50 years if it means more money for those public sector unions and Democrat campaigns.

          8. Frankly

            P.S. I forgot to add that if anyone has any money left over after paying the California Income Tax, California Property Tax, Local Parcel Taxes, Car Registration Taxes, Gas Taxes, Bike License Fees, Dog License Fees, Fishing License Fees, that you get to pay State and Local sales tax of about 8% on average (and as high as 10% in some California cities)…

            Recent articles about families making high-level incomes (like two doctors or two lawyers) falling into serious debt. The articles state out by point out that actual take home income is pummeled by “progressive” taxation which has gotten much more “progressive” when considering all the new free stuff that the government gives to lower income folk… that are unavailable to the higher income folk.

            The frightening thing about this is the Laffer Curve. Take someone making $250k per year and generally having to work more hours in a more stressful job. They have to pay for 100% of their own healthcare costs and 100% of their kids education costs, etc., etc.

            Then they do the math and realize that they can live pretty much the same lifestyle on $80k a year and get access to a number of the free stuff that government provides. So they “drop out” of the high earning rat race, and put their feet up.

            And how is this good for the economy?

            It isn’t.

          9. TrueBlueDevil

            SOD, that’s a good list, but you forgot all of the local building permit “fees” that are added on to generate tax revenues for the city.

          10. Jim Frame

            After taking about 10% of most peoples income off the top (top CA rate is 13.3%) the state then takes in (despite prop 13) MORE property taxes than any other state (way more than the pre prop 13 amount adjusted for inflation).

            1. California’s marginal tax rate for a single filer doesn’t hit 10% until you go over $250k. For married filing jointly, it’s over $500k. Even if we were to call 9.3% “close enough,” that rate doesn’t kick in until about $50k/$100k. I call BS on the “10% off the top” claim.

            2. The population of California is almost 60% larger now than it was when Prop 13 was enacted, so of course its property tax receipts are going to be higher now.

          11. Frankly

            This type of response misses the point of total taxation (tax misery).

            It also misses the impact of the rate applied to next dollar earned.

            Use for example a person making $300k. Say after nine months they have earned $250k. That means for the next three months of the year they will be be taxed at the near top income tax rate.

            For CA you will pay 10.30% of each new dollar earned.

            For fed income tax, you will pay 33% for each new dollar earned.

            That is 43.3%

            So out of each dollar you earn, you will keep 57.7 cents and the government will get the rest.

            And in consideration of that many people will just say enough is enough and stop working the last three months (or however many months they decide is not worth their time).

            I have done exactly this before. Turned down business start opportunities that would have led to more jobs in the economy because the punitive tax rate caused my personal time-money value calculation to reject the extra work for so little money.

            And on top of that I did not want to be demonized if I was successful enough to cause my income to jump significantly.

            Now if I had been living in Nevada or Florida, the opportunity would have better penciled out.

          12. Don Shor

            to reject the extra work for so little money.

            So you would quit working and forego $50,000 in gross income, $28,850 in net income, because you would only be earning $55/hour.

          13. Jim Frame

            I have done exactly this before. Turned down business start opportunities that would have led to more jobs in the economy

            I’ve done this many times, too. It’s called “personal choice,” and I like it. But I still call BS on the claim that CA takes “10% off the top,” because it simply isn’t true. For anyone.

          14. Jim Frame

            For anyone.

            Okay, I lied. A 10% effective rate for a single filer kicks in right around $300k. Everyone who makes less pays less than 10% in state tax. And we’re talking about taxable income, after all deductions have been taken; gross income is going to be higher, and in most cases a lot higher.

  7. Tia Will

    Frankly

    How many years of “working and paying taxes” does it take for the “fog to clear” ?
    I have been working and paying taxes for 45 years while maintaining my liberal viewpoint which was most certainly not obtained by professorial brainwashing since I was consistently more liberal than any of them,
    Or perhaps you simply see Davis as a fog protected zone ?

    1. TrueBlueDevil

      I have met plenty of 16-year-olds who can drop the claim “racism” at the drop of a hat when at worst what has been communicated might be a stereotype. Yet kids on the UCD campus wear their Che Rivera t-shirts to look cool… Che, who was a huge racist.

      1. Frankly

        Maybe if we replaced all that social justice / social engineering curriculum BS with more business and financial management we would have that better informed voter population to help us deal with all this fiscal malaise.

        Tia above makes a good point… and she backs it up with frequent comments that she isn’t very knowledgeable about business and finance. But I bet she is very knowledgeable about the plight of all the disadvantaged white-male-oppressed victims groups.

        Apparently there are some professions that allow a college educated person to retain and embrace the fog!

        1. Tia Will

          Frankly

          “But I bet she is very knowledgeable about the plight of all the disadvantaged white-male-oppressed victims groups.”

          You are correct. And this is why I was adamant that we not discriminated against males ( white or any other variety ) from our gynecologic hiring practice even when pressured to do so.
          Another small point. The fact that I am not knowledgeable in business and finance has not stopped me from becoming achieving quite a comfortable life style and I consider myself at least moderately aware of the city’s circumstances.

    2. DavisBurns

      “A fog protected zone..”

      Well the non climate change we’ve been experiencing has certainly given is a tule fog free zone the last few years? Remember Tule fog?

      I don’t see the point in using political philosophy as a lens to look at local issues. It seems an unnecessarily divisive. We have local problems and we solve them with the tools we have at hand in the community. This forum isn’t about state and federal policies and while they do effect us, in this context it doesn’t seem relevant most of the time.

      1. Frankly

        I think Tule fog needs moisture. I’m sure you are blaming the drought on man-made global warming theories, but then what about those other CA droughts that happened many decades and centuries before?

        Was the MidWest dust bowl caused by global warming?

          1. Don Shor

            This is significant because lack of fog means the daytime temperatures warm up. So while we had enough chilling hours for fruit trees this year, there was a significant instance where we didn’t have enough chilling units: sweet cherries. The trees failed to bloom and set properly, so growers in some regions had no crop. California cherry crop was down 63%.
            It is projected that chilling hours will decrease over the next several decades, down to about 600 in this region. If that occurs with continued loss of the Valley fog, chilling units would decrease as well. The impact would be variable by region and crop; Chandler walnuts need different chilling hours than Franquette, sweet cherries would show yield declines over time, etc. This is something to which growers can adapt with some planning. Lower-chill varieties already exist for some types, and can certainly be developed for others. Changing out the cultivars in an orchard is a normal process. The question for each is whether they will have the quality and yield needed.
            None of these changes would occur in a linear progression. There would be cold winters, warm ones, foggier ones, clearer ones. It’s possible that in a different phase of the Pacific Decadal Oscillation, fog will return. It’s just the trend that matters to growers and breeders and planners.

          2. Frankly

            It’s possible that in a different phase of the Pacific Decadal Oscillation, fog will return. It’s just the trend that matters to growers and breeders and planners.

            This says it all for me.

  8. DavisBurns

    I agree the Davis Enterprise is part of the problem. The budget is dull but it’s still news and most people expect they will learn about local issues by reading the local paper. It’s always been slender but when it went anorexic, I started looking for other sources of information. One thing I can say about the vanguard is it isn’t a quick read and it’s a time eater. If you’ve got folks working and raising kids, they are unlikely to find time to wade through this format.

    I honestly think they should run factual stories on issues Dunning decides to ridicule. Too many people read his column and think his take on an issue is informed and insightful AND other information isn’t readily available. Also, no one else has an opinion column that takes a serious look at what goes on in the city.

    Dan Wolk’s column is a good addition but the paper should be covering the issues that face the community and the coverage should be sufficient to alert their readers that there is a problem. For the most part, people live in communities and assume the bases are covered, things are generally going well until something goes wrong and usually it has to be seriously wrong to get widespread attention. I don’t think we are much different from Woodland, sacramento, Citrus Heights, Roseville. A small percentage are invoked and informed, the rest are involved in other stuff and it has little to do with intelligence.

      1. DavisBurns

        I did. Personal budgets, school board budget, state legislature budget…but I don’t have much confidence in their search engine so it might be better than it appears.

    1. Frankly

      Here is my problem with this Enterprise blame game.

      First, there are many Enterprise articles on the budget.

      Second, I only read one newspaper every day and it is the Wall Street Journal. And the WSJ tends to devote quite a bit of the political and business reporting on federal and state government fiscal problems.

      The point I am making here is that the Enterprise would lose readership, just as would the NYT and SFC, if it started reporting more factual and truthful information counter to what its reader base wants to hear. Its average reader would start claiming that the papers had developed a new conservative bent.

      1. Don Shor

        First, there are many Enterprise articles on the budget.

        I’m a daily Enterprise reader. I think this is not true. And a quick search in their system shows a great deal of coverage of school district budget issues, and very little of city budget issues.
        Rifkin writes about the budget on occasion. But based on my search, there have been the following articles in the Enterprise about the city budget situation in 2014:
        City posts proposed budget on website June 03 2014
        Will taxes fix it? Council looks at shoring up budget January 28 2014

        That’s it. So unless their search algorithm is mistaken, I wouldn’t call that “many Enterprise articles on the budget.”

  9. DavisBurns

    Re: Prop 13. I own a home. I know the property appreciates, yeah I get it about capital gains. I didn’t say I was opposed to prop 13 for home owners. That’s how it was sold to the public. The vast majority do not realize commercial real estate gets the same breaks and the tax breaks they get cost the state much more than the residential home owner tax breaks most people believe is all that Prop 13 does. Yes, business usually don’t own the property they use but someone does and even when ownership changes they can usually avoid reassessment of the property at current market value. Here is one link
    http://www.allgov.com/usa/ca/news/where-is-the-money-going/35-years-after-prop-13-passage-critics-decry-its-windfall-business-loophole-130515?news=850019

    1. South of Davis

      Davis Burns:

      > the tax breaks they get cost the state much more than the residential home
      > owner tax breaks most people believe is all that Prop 13 does.

      Commercial property is less than 1/3 of CA tax revenue. The CA LAO says:

      owner–occupied residential properties represent about 39 percent of the state’s assessed value, followed by investment and vacation residential properties (34 percent) and commercial properties (28 percent). Certain properties—including property owned by governments, hospitals, religious institutions, and charitable organizations—are exempt from the 1 percent property tax rate.

      http://www.lao.ca.gov/reports/2012/tax/property-tax-primer-112912.aspx

      I bet most people in California also don’t know that as “affordable” housing expands in the state expands and government and schools move in to more and more office buildings the state tax revenue drops to $0 (0%) for those properties….

      If Davis were to sell the 20 GAMAT/DACA homes and the Pacifico Student Housing Co-Op (getting more than $10 million) the state would EVERY YEAR get more in tax revenue from the new owners than the current rent subsidies and could help even MORE poor families live in Davis (or give bigger discounts to the current renters)…

    2. Frankly

      What is really aggravating about this constant class war drumbeat (business avoid taxes while the little man cannot) is that business passes on all costs to the little man consumer. And one of those cost that gets passed on is fewer jobs because fewer businesses can start or remain in business when taxes are increased.

      It is not like Michael Dell is himself pocketing $1 million per year from his tax avoidance. He is working to provide the greatest value at the most competitive price so he can win business enough to make a profit.

      His win on tax avoidance is a win for consumers, and a loss for the looters in government and the moochers that elect them.

          1. South of Davis

            Mark wrote:

            > Yes, we mustn’t forget the Vanguard’s campaign to
            > protect the hypersensitive…

            It seems that the Vanguard is not just trying to protect the “hypersensitive” but the “hypersensitive left”

            How ironic that in this very thread (at 11:59 am) DavisBurns wrote:

            > What changed is the private sector wages and benefits fell,
            > especially with the hostile takeovers and the looting of pension
            > funds

            With no response from the moderator all day, but less than one hour after Frankly wrote:

            > looters in government

            He is called out by the moderator. I’m wondering if Don just missed Davis Burns looter comment or if it is OK to call business owners looters when they take pension funds, but not OK to call government bureaucrats looters when they keep taking more money every year?

            P.P.S it is even more ironic that the government has “admitted” to “looting” not just Social Security but almost ever other government pension fund from coast to coast (almost all of them are under funded since the government in BOTH red and blue states stole the money to give it to their friends and donors)…

          2. Don Shor

            [moderator]
            1. DavisBurns didn’t call anyone, generically or otherwise, ‘looters’. DB used it as a verb.
            2. Frankly used the terms ‘looters and moochers’ as generic descriptors. The Vanguard comment policy specifically asks that this not be done.
            … from the Vanguard Comment Policy:

            Pejorative references to any general class of people are strongly discouraged. The Editorial Board asks commenters to understand that general insults discourage the participation of others. They contribute to a negative tone and strongly suggest disrespect for the views of others. In some cases, general insults oversimplify the positions of others, which is detrimental to informed and respectful debate. General insults that are provocative are especially discouraged.

            I also remind all of you to please see Vanguard Comment Policy:

            4. Debating Moderator Practices. An article’s comments section won’t be used to debate these guidelines or a decision of the Content Moderator. Concern about the removal of a comment should be addressed in an email to the Content Moderator. The moderator will keep confidential all email exchanges related to disagreements, and the identities of those raising concerns.

            Email can be sent to donshor@gmail.com

      1. Tia Will

        Frankly

        “His win on tax avoidance is a win for consumers”

        A businessman’s “win” on tax avoidance may be a win for consumes of his product. It is a win for him and possibly for his shareholders if applicable. However, on the local level, it is a loss for such city responsibilities as fixing potholes and other forms of infrastructure.
        It is interesting to me that someone so dedicated to the idea that increased revenue from businesses ( most recently innovation parks) is touting the idea that less taxes from businesses is a boon to consumers and therefore supposedly a good idea. It would seem that you place the “well being ” of a limited amount of consumers and of course the businessman himself over the “well being ” ( in terms of improved infrastructure) of the much larger number of residents of the city.

        1. Frankly

          The revenue needed to fix potholes is in the pockets of the public sector unions and the politicians they elect. Go get it there, not from hard working business owners trying to help the economy.

  10. South of Davis

    Davis Burns:

    > Yes, business usually don’t own the property they use but someone does and
    > even when ownership changes they can usually avoid reassessment of the
    > property at current market value.

    Only in the “rare” (maybe one in every 10,000 real estate sales) can you avoid reassessment on the sale of a commercial property in California (DT Businessman knows far more about this than I ever will and it will be interesting if he can add something from a Commercial Real Estate Broker point of view). Typically something like a LBO of a “company” that happens to own real estate.

    PG&E is one of the small percentage of California companies that “own” real estate. If I sell Frankly one share of PG&E stock (I have never actually owned any PG&E stock) the “ownership” of the “business” that owns property in Davis changed but it is not re-assessed because the “company” still owns the real estate not Frankly (he won’t be able to store his boat in extra space they have in the yard east of L street).

    In the case of the Michael Dell real estate transaction Davis Burns linked to every now and then we might have a sale like this. Don’t forget that every time you pull a permit to improve a piece of real estate in CA the property taxes go up, while someone in Davis might get away with putting in a water heater or sliding door without a permit most hotels (like the one Michael Dell bought) spend millions on permitted renovations every few years (and see their property taxes go up much more than 2% a year)…

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