Watching the council discuss the potential revenue measures continues to feel a lot like déjà vu all over again. I feel like after Tuesday’s discussion I have a better sense for where we are not going than where we are going.
The one thing that seems clear is that we are more likely than not going to see a special tax rather than a general tax. Part of that is that the council has taken most of the general tax measures off the table. For example, there seems to be no support for additional TOT (Transient Occupancy Tax) taxes because, as Brett Lee put it, they seem punitive at this point with the council having raised them in 2016.
The council might do a sugar-sweetened beverage tax, but we need to look at that a bit differently and not as a revenue measure. The Vanguard will have a separate discussion on this coming up.
As Mayor Robb Davis put it, “I’m hearing support for something that is bite-sized and specific. I’m not hearing the support for a general tax.”
While he pointed out that staff prefers a 50 percent plus one tax, that doesn’t seem the direction that council is willing to go.
City Manager Dirk Brazil pointed out, “For whatever reason in this community a utility user tax is a really heavy lift.” He pushed back a little, noting the surprise from people across the state that the city isn’t getting more traction on the UUT tax.
The last thing Mayor Davis stated is, “UUT is not dead.”
But if we don’t go for a utility user tax, where do we go? Brett Lee suggested that we do a small and bite-sized measure and mention specifically what we are asking for. Councilmember Will Arnold said he thinks we need to do a parks tax, which is expiring in 2018 anyway, and he would be willing to consider a second tax.
Councilmember Lucas Frerichs said they need to do polling, and argued that the 2012 parks tax, renewed at 84 percent at the same $49 level, was “a missed opportunity in 2012.” He suggested that what the council should do is put money into the parcel tax, and then that will free up money from the general fund that could go to roads and elsewhere.
Mayor Davis on the other hand suggested one route to go would be some sort of $175 to $200 a year tax that could go to parks, roads, infrastructure and even services to homeless people. He said that “it’s a bunch of bites, but they’re all put together in a sandwich.”
He added, “I support an infrastructure tax, I don’t see how we can look at this and say it’s just parks.”
The mayor said he felt that if they got $4 or $5 million from the tax, “that is the most we’re going to get and that’s not enough.” But he added that “that would be a significant dent.”
Finally there was support for actionable cost-cutting options that could come together before the vote.
Mayor Pro Tem Brett Lee pushed for these as a way to gain the trust of the community.
As the mayor put it, “I think what we need to work on is a revenue measure and some clear actionable items on cost containment for this council to act on before the ballot.” He said we need to take actions along with the ballot measure that will contain costs. And he argued that we need to show good faith that we “are going to be good stewards.”
One point he raised was compensation to the firefighters. The firefighters last agreed to a new contract in 2009 and, when the council imposed a contract on them back in 2013, they imposed a two percent pay cut.
However, despite this, compensation to the firefighters continues to increase and this is due not to actions of this council, but rather past council decisions along with the increased costs in the pension system.
The key point he made is that, in order to get out from those cost increases, the city would have to get rid of the defined benefit system – something he argued that was not feasible. He said that they would have to bargain to end the city’s involvement in CalPERS (California Public Employees’ Retirement System) and a defined benefit pension system, and he said that “there is not a bargaining unit in this state that is going to go along with that.”
What is clear though is that any effort to raise taxes needs to be accompanied by tangible and actionable commitments to cost containment.
The bottom line take away from this discussion are the following points.
First, it appears that the council will be needing to go the route of a special tax, which means a two-thirds vote requirement. The city at the very least will be doing an increased renewal of the existing parks tax, but what they do beyond that is very much up in the air.
Second, with a two-thirds tax comes the question of how much they ask for. And, while Mayor Pro Tem Brett Lee opposed polling at least at this point, Councilmember Lucas Frerichs and others pushed for it. It seems logical to poll when the requirement is two-thirds and the amount of money is up in the air.
Third, I tend to agree with Mayor Davis’ belief that we are looking at $4 million or $5 million – and, really, that is probably a high number – rather than the full $8 million shortfall. That puts us in the $200 range for a parcel tax.
Finally, cost containment is paramount to voter support. Without a commitment to fiscal responsibility, I think getting two-thirds on even a modest tax measure is problematic.
I realize that some want more cost containment, they want to go away from defined benefits – I just don’t see it as realistic. We should look at a modest revenue measure, while continuing to push for cost containment and economic development.
—David M. Greenwald reporting