Monday Morning Thoughts: Binding Council on a General Tax Vote

Wallet Taxes

Wallet Taxes

Although the Davis City Council did not take specific action last week on a tax measure, given the infrastructure and other revenue needs, it still seems likely that the council will take some action on a tax measure prior to the February timeline.

While there are some anti-tax pockets in the city, Davis is a community that, by and large, has supported revenue measures for the city and school district.

However, the recent flap over the MOU (Memorandum of Understanding) issue reminds us that there is a need to bind the council more closely on how revenue measures are spent. The classic example is 2004’s sale tax that was purported to be for parks and public safety in order to prevent cuts in service, and then went to massive personnel compensation hikes.

While the 2004 sales tax measure was an extreme example of bait and switch, the current MOU flap is probably more indicative of the problem. The city in early 2014 was facing about $5 million in structural deficits along with infrastructure and other needs. The council decided the simplest approach was to put one tax – a sales tax – on the ballot.

Their original thinking was to put an accompanying advisory measure on the ballot to ensure that the money would be spent as advertised, but advisory measures are limited.

As the current staff report notes, “Advisory measures may be placed on the ballot that seek the voters’ input on how the general revenue raised by a general tax should be used by the City. Advisory measures are not binding. Under the California Constitution, general taxes raise revenue that goes into the general fund for general governmental purposes and are approved by majority vote. If a tax measure mandates that the revenue be used for a specific or special purpose, the tax becomes a special tax and requires a 2/3rd’s vote of the voters. Therefore, if there is a desire to seek the guidance of the community on how to use a general tax, the guidance must be in the form of a non-binding advisory measure.”

This is the basic problem – how to sufficiently bind the council to spend the money as advertised, while steering clear of language that would trigger the two-thirds requirement.

The last council ultimately decided that they would just put the sales tax measure on the ballot – that the revenue was sufficiently low that it wouldn’t be diverted.

In retrospect, the problem wasn’t the decision to avoid a messy advisory measure, but rather that council did not make a clear enough declaration as to the purpose of the tax for the community to go back and hold them to it. While there was a discussion of the advisory vote, there was never a clear statement – this is what we intend this tax to be used for, and this is what the tax should not be used for.

There may be an easy answer for the council. Instead of putting an advisory measure on the ballot, the council could opt for another approach. They could pass a non-binding resolution, like a statement of purpose.

The resolution could simply state that the council intends for this tax measure to cover the following city needs. The measure would then lay out the needs that the revenue measure would address. It could even list some purposes for which the revenue measure would definitely not address.

In order to avoid triggering the two-thirds tax requirement, the council would not be legally bound by the resolution. It would simply be a statement of intent without any legal weight.

Since I’m not an attorney, I don’t know the laws pertaining to how specific the council can or cannot be here, but obviously they would need the city attorney, Harriet Steiner, to make sure the resolution was sufficiently advisory in nature to avoid that trigger.

You say, what is to stop the council in a future date from simply putting the money to whatever purposes they desire?

The answer is that there would be no legal mechanism to do that. However, the community can then hold them accountable.

So let us say that the council passed a general tax revenue measure generating $2 million a year and then used that revenue to either directly – or indirectly – fund employee compensation increases. The Vanguard and members of the community can go back to the resolution and cry foul.

At least at that point there would be a clear statement of intent and, if the community were outraged enough, there could be consequences for the council going back on their word.

This would be a measure that helps ensure accountability and transparency.

Along the same lines, I know the Finance and Budget Commission has been looking at better language to ensure transparency in how money is spent and for what.

Democracy requires vigilance and I think the community can hold the council to its word, so long as we have a clear statement.

The problem is, even with a special tax, where we can direct where the money goes, there is still $4 million in general fund money that is going for roads right now that could be freed up to go elsewhere. So we either find a way to make council specify how money is to spent, or we forgo a revenue measure.

Unfortunately, I think forgoing a revenue measure means that we end up paying a lot more in the long run – so that is not an option. The best option at this time is to get a clear statement of intent from the council.

—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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  1. Jim Frame

    Advisory votes, statements of intent, personal pledges — in my view none of them are worth the time it takes to put them in the record.  The only effective accountability mechanism available to the citizens is the ballot.  If we’d quit electing stepping-stone council members, we wouldn’t have the bait-and-switch problem.

    1. hpierce

      Remembering CC members (over 45 years, several communities), the best were what we called “the tennis shoe league”… they were long-term residents, actually only interested in the local community, no personal aspirations for fame nor fortune for their service… in the Davis history, Greene, V Asmundson, Gill, Woodbury, all come to mind… of those, only knew one personally… more is the pity…

    2. Davis Progressive

      how do we know who stepping stone politicians are?  obviously dan wolk is the golden boy.  but, krovoza was a good councilmember who ran for higher office, lost, and left politics.  lucas frerichs might run for higher office some day, but he’s putting in his work.  i think that’s the wrong approach.

  2. Davis Progressive

    at some point we need to be able to trust the word of those we elected.  and if we are shown not to trust them, we have recourse in the form of elections, recalls, and referendum.  i view this issue the same as campaign finance – if just had instant notification, we could hold people accountable.  that’s why i disagree with tia in the other article – the problem isn’t money it’s the inability to follow the money.

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