Commentary: Accountability with Revenue Measures

Wallet Taxes

Wallet Taxes

The Vanguard in the last few weeks has noted the solid recommendations from the Finance and Budget Commission, which in November and December urged the council not to approve new tax measures or utility rate increases until the city took better accounting of its “multi-year projections of underlying city revenues and expenditures” and the scope of its “funding needs for deferred maintenance and capital improvement projects that are supported, at least in part, from the General Fund.”

In a letter to the Enterprise, Elaine Roberts Musser, I think, nails the concerns of many voters directly on the head. She writes, “I am strongly in favor of the recommendations of the city of Davis Finance and Budget Commission. Many of its conclusions jive with the city utility user tax focus group of community representatives of which I was a part.”

She adds, “The biggest concern of everyone seems to be ‘accountability.’”

She nails it exactly when she explains, “There are two major issues in regard to the city’s budget: supplantation (some refer to it as ‘bait and switch’) and ongoing unmet needs.”

She writes, “Citizens don’t want tax revenues to take the place of (supplant) funding already set aside for road repair, so budgeted road repair monies wind up being spent on something like employee compensation. And we expect the city to address continuing unmet needs — such as road, bike path, building and pool repair and maintenance.”

This is exactly the concern that we raised when the city implemented the new MOUs, which in my view and the view of many here on the Vanguard made use of sales tax monies that were supposed to go to cutting into the structural deficit and unmet needs.

There is a trust issue that gets undermined when council or any government body asks for an emergency revenue measure, only to turn around some time later after the immediate “crisis” has passed and use public monies for other purposes.

The most blatant example was in 2004, when the community was asked to pass a sales tax where the proponents, including such luminaries as Lois Wolk (Assemblymember), 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.

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

No sooner had the voters passed this but the money was then used to fund a very large employee compensation increase, the backbone of which is a huge contributing factor to the ongoing financial struggles of the city.

While some have argued that the $1.3 million employee compensation increase this time pales in comparison to that of a decade ago, given the conversations that the council held in putting the measure on the ballot, in some ways the turnaround is even more egregious.

Ms. Roberts Musser argues, “Immediate past and current City Council members have been much more fiscally responsible than some previous City Councils. Nevertheless, citizens are still wary.”

I think that’s a fair assessment and she quickly adds, “The make-up of future City Councils is unknown.”

She summarizes well the position of the Finance and Budget Commission:

  • Include unfunded liabilities in multi-year projections of revenues and expenditures;
  • Determine if there are any other potential cost-saving measures the city can implement;
  • Create a complete list of deferred maintenance of existing infrastructure supported by the general fund;
  • Provide clear explanations of what any proposed tax revenues will be spent on;
  • Any proposed general tax should be accompanied by an advisory measure and require a four- to six-year sunset; and
  • For any proposed tax, there should be a written plan explaining how revenues will be spent, the adoption of a maintenance-of-effort requirement and an annual expenditure review.

Elaine Roberts Musser concludes, “In short, show us through a new and comprehensive fiscal projection that the city really needs the money and specifically for what. A modest $50 roads parcel tax, as Councilman Brett Lee has previously suggested, and/or a modest increase in the parks tax, as Mayor Dan Wolk has proposed, are both possibilities — but if and only if the Finance and Budget Commission’s recommendations are implemented first.”

I am reluctant to go to a standalone parks tax, as I feel that the roads needs greatly outweigh the parks needs. I would be supportive of an infrastructure parcel tax that can fund existing roads, parks, and city infrastructure needs. I would not be supportive of a standalone parks tax or one that funds new projects.

However, while the need to implement the FBC recommendation is an important step, I would be supportive of a tax on the June ballot absent the prerequisite, due to the fact that infrastructure costs are deferred maintenance and therefore the costs appreciate over time. While we wait to analyze costs and needs, costs continue to mount.

It puts us in a tricky position and part of the blame has to go to the city for dragging its feet on this analysis, over the last year and a half since the sales tax measure was passed in June 2014.

—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. John Munn

    I think there are actually 3 concerns covered by this article:  supplanting, bait-and-switch, and shell games.  Giving one reason for approving funds and then using them for something else is a straightforward example of “bait-and-switch” behavior that is simply dishonest.  Supplanting funds that are already being used for one purpose with new funds is actually an example of playing shell games.  In the case of future tax measure proposals, both of these behaviors could come into play.  For example, the City could play a shell game by supplanting current expenditures on road maintenance with funds from a new revenue source, the City could also (again) do a bait and switch by using new revenue for other purposes, or (most likely) some combination of these behaviors.

    The way to tell is simply that the amount spent needs to match current spending (including dedicated funds from outside sources, such as grants) plus new revenue that comes from whatever reasons are given for the new revenue.

    I would like to also point out that the best way to reinforce use of bait-and-switch and shell game behaviors is to keep re-electing the people who use them, as has been the case for our current City, County, and State office holders.  For full disclosure, I have been an unsuccessful candidate for City and State offices, so you can take my comments with whatever credibility you wish to give them.  But this is not to try to win votes, since age and other responsibilities are probably enough to keep me from running again.

    Finally, I want to express my support for The Budget and Finance Committee’s and Elaine Musser’s advice to the City Council.  I sat with Elaine and Dan Carson on a panel discussing use of a Utility User’s Tax (UUT) for raising City infrastructure maintenance and improvement funds, where we found much to agree on.  The City Council now seems to have moved away from the UUT approach, but most of the panel’s concerns about new revenue sources still apply.

    John Munn

    1. hpierce

      You say that there are 3 issues… one would normally be they considered distinct/separate…  yet you definitely equate “bait and switch” with “shell-game”… arguably “supplanting” is either congruent or equal to the other two… and you were on the school board?  Scary… now I’m glad your CC run failed.

      You raise 3 issues, yet they are three flavors of one issue.


      The basic issue is valid.  Your comment, as written, is noted as silly.  At best. Just my opinion.

      1. Matt Williams

        I respectfully disagree hpierce.  In my opinion, “supplanting” (Elaine’s word) and “bait-and-switch” are different, but similar, issues.

        I could use John Munn’s term “shell game” as a descriptor for both “supplanting” and “bait-and-switch,” with the difference being which shell the pea ends up under.

        So I could buy a reduction from 3 issues to 2 issues, but not from 3 issues to 1 issue.  More importantly, John’s comment, regardless of any perceived deficiencies in writing, is good food for both thought and commentary. Just my opinion.

  2. SODA

    hpierce, have more coffee or take a deep breath.

    John Munn, I apologize for the rude comment. I too wondered about your arithmetic in terms of number of issues but would not attack you. I found your comments informative and hope you will continue to post!

  3. John Munn

    It’s just my opinion, but if the response from hpierce is representative, it is no wonder that the number of commenters does not grow larger.  I think that the difference between bait-and-switch and shell games is clear and that casting aspersions neither increases accuracy nor promotes discussion.  I will agree that I listed three terms, and then lumped two of them together. This could have been done better if I had spent more time on it. Just my opinion.

    1. Barack Palin

      John Munn, I appreciate your thoughts and totally agree with you.  I voted for you and wish you represented us on the council, at least that way we would’ve known that at least one council member would be spending our money wisely.  Don’t worry about Hpierce, he often jumps people just to think twice about it and later apologize.  Either way, he’s not worth letting it bother you.


    2. Frankly

      John Munn – I too appreciate your comments.  Hpierce has previously identified himself (he will obviously correct me if I am wrong) a retired government employee.  And like many (not all) government employees and government employee retirees he quickly gets riled up over comments that could lead to reduced spending on government employee pay and benefits.  Also, once you are identified as on of “those” people, he puts you in his cross-hairs.

      But I hope we can all just accept that passions run high for some people on some topics and not take it too personally.  I think you should take it as a complement that you struck a nerve.  It means you are likely accurate.

  4. Tia Will

    I also appreciate John Munn putting forth his assessment. I have a different take on the matter of the “shell game”. Anyone can feel free to correct me if I am wrong, however, I believe that for most people the issue of a “bait and switch” only becomes an issue if they do not like the new purpose for which the money is being spent. For example, I doubt that many or as deeply felt concerns would be being expressed if for example the city leadership were to divert some money initially slated for street repair  to an area of greenbelt that had been assessed as dangerous and in need of immediate repair.

    Likewise, I doubt that there would be many expressing concern if some funds believed to have been slated for one group of city employees were used to fund another more critical position that had been identified ( within the limitations of what the law and union rules allow, of course).

    I think that the real issue here is that some just hate the thought that their taxes are being used for expenditures of which they do not approve. I fully understand this position. I am disgusted every year when I pay my taxes and realize that some of that money will go to actions that I feel are immoral such as non defensive wars and deportations of individuals I believe should be granted asylum. That however, is the price I pay for living in a society that determines that rules and monetary expenditures will be made and directed by those for whom we have voted into those decision making positions.

  5. Tia Will


    Would you feel the same way if your soda tax money was being spent on employee raises instead of health related costs?  I doubt it.”

    You can doubt all you like, but I am surprised if you have been listening to my opinions on the matter of taxation. The answer to your question is I would absolutely feel the same way if the need for employee raises were equal or greater than the need for health related expenditures. I honestly do not see what the big deal is here.  I am not and do not aspire to be on the City Council. Therefore I do not get to make these decisions. John Munn I respect for having put his name forward as a candidate for this kind of decision making even though we see the issues quite differently.

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