Last week, the Davis City Council, while recognizing the need for revenue measures, decided that rather than attempt to cobble together a last moment tax measure, they would wait for a subsequent election to place a measure that would fund, among other things, critical city infrastructure including roads, parks and city buildings.
We were critical of this, in particular due to the fact that the council has been discussing such a revenue measure for two years, and they declined to place an infrastructure measure on the June 2014 budget, opting for a general tax measure which would increase the sales tax by half a cent on the dollar. Six months later, citing troubling polling, they declined again. Finally, they waited to discuss an array of options until December, which ultimately proved too late in a jam-packed February agenda.
However, Elaine Roberts Musser, in a letter today to the local paper, cites another problem, calling the discussion “muddled” and the deliberations “startling and unsettling.”
Ms. Musser makes a number of good and important points. The chief problem appears to be that the council was really not on the same page as to what the tax should be, how much, and what the key priorities were for expenditures.
Ms. Musser points out, “The City Council couldn’t decide what any potential tax revenue should be spent on. Disparate interests were mentioned: road maintenance, Rainbow City, more police. Reference was made to a city wish list, which includes everything but the kitchen sink.”
She writes, “Clearly there is no City Council consensus on city needs, their prioritization and how much tax revenue is necessary to pay for it.”
Perhaps this oversimplifies it, but there appeared to be three camps. One, led by Dan Wolk and Lucas Frerichs, sought to expand the current parks tax from $49 per year up to at least $99. They were willing to accept Rochelle Swanson’s direction to add infrastructure, but it was fairly clear that Councilmember Swanson disagreed with some of the more optional items on the list.
On the other hand, Robb Davis and Brett Lee seemed more interested in funding roads infrastructure first, but may have been willing to accept parks spending in a way that was more in line with the breakdown of actual needs, at 80 percent roads and 10 percent each for parks and buildings – a funding breakdown not reflected in the scenarios that city staff had laid out.
This seemed to be the crux of the dispute and, while Dan Wolk obviously saw some urgency in his leaving the council and perhaps in framing his campaign, the rest of the council seemed willing to wait to develop a clearer picture of needs.
Ms. Musser noted, “Even more unnerving was the talk about spending parks tax revenue on parks, which would free up general fund monies to be spent on other things, like road repairs or whatever a future City Council decides. This practice is known as “supplantation,” also better known as “bait and switch.””
As Ms. Musser I think rightly points out, any idea of using the parcel tax to lay out expenditures, with the idea of then freeing up existing general fund spending for other purposes, would have been problematic at best and instilled the fears that critics like the Vanguard and others have that this is all a ploy to free up money for employee salaries.
Ms. Musser might disagree, but it seems like this was done with regard to the MOU where sales tax money that was sold to the public to close deficits and fill critical infrastructure short-falls appeared to be used in part to fund a small but meaningful raise for employees.
While I disagree with Ms. Musser on the soda tax, I do believe that the evolving concept of the tax, coupled with unfortunate suggestions that it could fund infrastructure, is problematic. Mayor Pro Tem Robb Davis apologized on Tuesday for bringing infrastructure into the conversation. Moreover, it is clear that the actual proponents of the tax in the public health community saw this not as a way to fund infrastructure, but rather as a means to fund critical health programs.
As Ms. Eastin pointed out last Monday: “There is a lot of misrepresentation going on by the soda industry. They would have you believe, oh, we will raise taxes on sugary drinks to fix the roads – that is not true.”
On Tuesday it was Mayor Pro Tem Robb Davis who admirably took the blame for this snafu, but really this was a process-oriented mistake and the blame here falls on the city manager who threw the soda tax on the discussion with revenue measures, rather than putting it as a separate item that needed consideration. This automatically and, in retrospect, intentionally, pitted the soda tax against other revenue measures, rather than recognizing that its purpose and mechanism were in fact quite different.
This was enough to lead Ms. Musser to write, “The conversation on the soda tax was in much the same vein, where its original purpose was to address infrastructure which morphed to school health seminars. This budgetary and taxation sleight of hand gives voters the reason to vote no at the ballot box to any new tax.”
While I disagree here, I think she is right to argue that the poor handling of this item might give people the impression that this was simply another “budgetary and taxation sleight of hand” that gives the voters the “reason to vote no at the ballot box to any new tax.”
That is her chief concern here and I think appropriately so. Suddenly the city manager is throwing out a marijuana tax which is not even conceivable absent voter direction on recreational use of marijuana – something that is at least seven months away. Why discuss this now, as we are jammed on time?
While I believe this is probably more incompetence than malice, the case can be made that Dirk Brazil was attempting to get Dan Wolk off the hook by making it easy to kill the soda tax.
Ms. Musser concludes, “The City Council’s confusing discussion reinforces my belief the necessity to follow the Finance & Budget Commission’s suggestions. Hammer out guiding principles, setting out specific metrics for any new tax measure, including articulable needs (not “nice to haves”), prioritization of those needs, and exactly how any proposed tax will pay for the costs.”
I certainly support this evidence-based approach to financing. At the same time, for the most part we have our evidence. We have a 2013 consultant report on roads, which was updated this fall to take into account the collapsing oil market and thus the decrease in the inflation projects for asphalt, but this is largely a known entity.
At some point the council needs to take the plunge and ask for tax increases. I think sooner would have been better, and the fact that we are still waiting is a reflection not only of conflicting council goals, but also poor city management.
—David M. Greenwald reporting