Commentary: Did the Council Make a Mistake Going with Two Ballot Measures for Revenue Increases?

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My View: I Don’t See a Lot of Nascent Opposition to the Tax Measure, but the City Has Little Margin

On Tuesday, the council took steps to finalize the proposed revenue measures for the June ballot.  While things can still change, the next meeting marks the deadline for putting such a matter on the ballot and, given that the council is going to need to devote a great deal of time to Nishi, it seems unlikely that much is going to change.

So here are my thoughts on the measures and the prospects for passage.

The most glaring thing is that they opted for two ballot measures.  A lot of people are going to second guess that decision and I have to somewhat agree.  I understand wanting to keep the lines very clear between parks and roads, but two ballot measures might coalesce opposition or invite the public to pick their favorite one and vote against the other one.  Hard to know.

The logic I see here is that the council now sees the parks tax as a straight renewal, and although it keeps the initial level at the absurdly low $49 per year, it adds an inflator as well as a 20-year term.  If anything, the council opens itself up on the parks tax to the charge that they have shot too low.  The actual cost for parks is between two and four times that amount.  And so at some point the city is going to end up either deferring maintenance here or is going to need to come back with another tax.

In the meantime, I think everyone kind of understands that roads are the biggest problem facing the community in terms of deferred maintenance for infrastructure.

As Alan Pryor put it in his public comment, “I think if you ask almost anyone in this city, what do you got to fix, they’re going to tell you it’s the street surfaces.  I really think that’s what you should be focusing on.”

He added, “I think the people of Davis will pony up for street surfaces and bike paths, perhaps as much as $150.”

The council in a way opted for the middle-based term.  Clearly the $150 was what they had originally envisioned needing.  Brett Lee and Rochelle Swanson pushed for $79 rather than $99.

Councilmember Will Arnold was reluctant to go that low, “I wanted to be even more ambitious in terms of dollar amount.”

“We’re going too low for me,” Mayor Robb Davis jumped in on the $79 versus $99 question.  “I’m not supportive of $79.  I don’t sense it from Lucas (Frerichs), I think he wants to stay closer to $99.”

Personally, I think they went a little low, especially on parks.  We’re basically generating $4 million when we need $8 million.

As Mayor Davis put it, “Remember the last parks tax, we weren’t bold enough.  We’ve covered that a little bit through inflators.  We’ve covered a little of that through a recognition that there’s only so much that we can ask of the community, and we’ve also said future councils need to look for opportunities to grow revenue and to contain costs.”

So for those who want to argue that we should be developing an economic development plan and wedding ourselves to cost-containment, they have a point.  The council can push back that their revenue measure will force them to find new revenue and force them to contain costs or else they run the risk of negating even the half measure they’ve put on the ballot.

Mark West, who is among the ten candidates running for council, offered this in a comment on Wednesday: “I have been saying all along (that we need a) comprehensive plan starting with economic development and cost-containment, then adding new taxes as the last step to fill in the gaps.”

Instead he sees that, for the council majority, the plan has been “talk about economic development (but never implement) and then just raise taxes, with the requisite threat of cutting services thrown in for good measure. Until they make a serious effort at economic development and cost containment, there is no reason to give them more tax money to spend.”

While Mr. West certainly has a point there, from a policy standpoint I don’t think the council has the luxury of waiting for an economic development plan to come on line before shoring up city revenues.  Instead, I see the need for a short-term revenue boost coupled with a longer term strategy for cost containment and economic development.

The parks tax being a straight renewal of current levels for 20 years plays into what I think the strategy needs to be here.  They’ve asked for ten years of roads funding, and that basically gives the council a decade to figure out new revenues before they face the voters again.  The voters in 2028 can then evaluate whether or not they should extend the taxes.

By getting only halfway to what they actually need, they actually force themselves to make some key decisions.  Can we get economic development, the passage of an innovation park?  I’m increasingly skeptical and want to see more upfront leadership from the city on this aspect.

Mayor Davis has expressed frustrations with regard to initiatives toward cost containment.  Well, now the council is really committing to go down that road because, as it stands now, they are only getting the half the revenue that they need and I still believe the $8 million a year need is a low number.

Finally, let us address the issue of whether the measures can pass a vote.  The council made an interesting decision to go with two revenue measures rather than a combined $149 tax.  We will see if that proves to be wise or a mistake.

By going with a parcel tax, they have taken a leap of faith by facing a two-thirds vote rather than a majority vote.  That does not give them a huge margin for error in the election.

But by going the parcel tax route, they can ensure that the money is spent as they have promised.

It was decided that the new tax would fund streets, bike lanes, bike paths, and sidewalks, along with traffic maintenance including signals, signs, and striping.  Eliminated from the list were public facilities, surface parking lots, and transit stops.

I asked City Manager Mike Webb just how specific the measure will get.  Assistant City Manager Kelly Stachowicz pointed out that, on Tuesday, “the Council did not specify the percentage of the amount of expected revenue that would go to road pavement or to the project-specific level.”

When staff comes back on February 6, she said, “I would suggest that we would start with a proportional allocation based on the defined need and start to put together annual spending plans from that.  From year to year, exact % of money spent in one area (roads, bike paths, etc.) may vary, based on the needs of the specified projects. Council could, of course, provide different direction on February 6, if they choose to specify spending amounts.

“They also directed that we include a maintenance of effort requirement as part of the ordinance, so that we are not supplanting existing dollars with revenue from the transportation measure.  Staff will be looking into the best ways to define that and will bring back wording on the 6th.”

A key point is that they are going to look for ways to ensure they are not just using revenue from the transportation measure to backfill existing money, but this remains a bit of a work in progress.

Will these measures pass?  I think they have a good chance.  One thing that is telling is that, despite the fact that some have suggested there could be an effort brewing to defeat the revenue measures, we did not see even a hint of organized opposition at all at the public meeting.

That is not definitive but it is fairly telling.  The people who came to speak on the revenue measures, for the most part, were people who speak on every issue.  The average person is not coming down to city hall to oppose the revenue measure.

Now maybe something emerges later, but it seems rather telling that there is no nascent discontent emerging at the meetings.

On the other hand, the defeated measures for land use have always had a good amount of heated public comment as a precursor to the opposition movement to the ballot measure.  I just don’t see that with the revenue measure.

But again, the school parcel taxes have generated somewhere between 27 and 33 percent opposition, so it doesn’t take much of a shift to put a city ballot measure into the danger area.

—David M. Greenwald reporting



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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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9 thoughts on “Commentary: Did the Council Make a Mistake Going with Two Ballot Measures for Revenue Increases?”

  1. Keith O

    The most glaring thing is that they opted for two ballot measures.

    How can this be glaring or even a surprise when they’ve been talking about going with up to three different parcel taxes for months (parks, roads and social services).

    Lowering the parks and roads taxes give those measures a much better chance of passing.  They were wise to drop the homeless tax as that might have toppled all three.

    I think they know they have to go the 2/3’s parcel tax route with well defined structures as the people want to make sure their money gets spent as advertised, not like what happened with the last two sales tax measures.

    At $49 and $79 I’ll be a yes vote as long as the funds are locked in for their proposed purpose and “we are not supplanting existing dollars with revenue from the transportation measure.”

    1. David Greenwald Post author

      First of all, they talked in terms of multiple purposes for the parcel tax, that didn’t mean the measures themselves would be separate AND on the same ballot. Especially when it comes in at just $148, I’m surprised that they went that route.

      I agree with your comment on lowering the taxes give them a better chance of passing. The thought was always that the social services tax would be on a different ballot.

      “I think they know they have to go the 2/3’s parcel tax route with well defined structures as the people want to make sure their money gets spent as advertised, not like what happened with the last two sales tax measures.”

      But still that requires a much stepper hurdle.

      “At $49 and $79 I’ll be a yes vote as long as the funds are locked in for their proposed purpose and “we are not supplanting existing dollars with revenue from the transportation measure.””

      Interesting. (Although it’s $99)

        1. David Greenwald Post author

          Alan Pryor: “While I am generally supportive of the proposed taxes, I think the Council has made a HUGE political mistake by splitting it into two separate taxes. Having two separate taxes on the ballot makes it far too easy for a voter to simply say “I want my roads fixed but don’t care so much about the parks” (or vice versa) and simply vote only for one but not the other.”

        2. Keith O

          But you are wrong, the original plan was for three separate parcel taxes but you write this article that going with two is somehow “glaring”.  It’s not surprising at all and was fully expected once they wisely dropped the homeless tax.

          1. David Greenwald Post author

            It’s still surprising even if they were originally talking about three separate taxes. I had asked at the time, and their plan may have been to separate them for when they were on the ballot as well. One of the councilmembers questioned why Will Arnold, would push for two separate taxes. I tend to agree.

      1. Howard P

        Especially when it comes in at just $148, I’m surprised that they went that route.

        Me too… ‘half-stepping’… methinks they should have gone twice as much, or just do nothing…

        As it stands, ‘the hole’ is only being dug more slowly…

  2. Alan Pryor

     
    The following is a slightly varied set of comments from what I posted on Wednesday morning:

    I was very supportive of a single tax measure at $199 with a CPI inflator for 6 years – $150 for only streets, bike lanes, and bike path resurfacing and striping and $49 for only parks and recreational facility maintenance. The key to my support was that there be assurances that the existing level of expenditures for each could not be reduced unless the City’s entire General Fund was reduced such as in a recession in which case the expenditures could be reduced by the same percentage drop.

    Staff’s report suggested that the existing level of expenditures for roads and parks be maintained each year only as long as there was at least a 15% General Fund reserve that year. That did not come close to addressing my main concern which is that existing road and park expenditures could be easily siphoned of for employee compensation as has happened every time the City has raised a new tax in the past.. All new City Councils would have to do is give a big enough salary or benefit payment increase each year so that a reserve of 14.9% was established each year and they could avoid ponying up for the preexisting road and parks expenditures the public otherwise expected.

    Will Arnold initially touched on the need to change the assurances provided to the public that existing expenditures on roads and parks could easily be subverted by just using the 15% General Reserve Fund threshold. But it was Robb Davis who hammered it home that the public absolutely needs concrete assurances than new taxes would not simply supplant existing expenditures. He insisted on language that truly protected these existing road and park expenditures from future cuts by specifying the existing expenditure levels be maintained in the future unless there is a General Fund drop due to recessionary pressures.

    While I am generally supportive of the proposed taxes, I think the Council has made a HUGE political mistake by splitting it into two separate taxes. Having two separate taxes on the ballot makes it far too easy for a voter to simply say “I want my roads fixed but don’t care so much about the parks” (or vice versa) and simply vote only for one but not the other. I think this split vote scenario is far more likely that a voter saying, “It is just too much so I am no voting for neither”. If 2 similar measures (one for roads and one for parks is put on the ballot, I predict enough people would split vote that each measure would only get about 60% of the vote thus sending both to defeat because they did not meet the 2/3/threshold. required for a parcel tax passing.

    Plus the logistics and efforts (and money) required to physically run two separate campaigns (one for each tax measure) is really overwhelming. It will require 2 separate campaign committees with two separate sets of periodic filings, two separate sets of accounting/bookkeeping, 2 different fundraising efforts to pay for 2 sets of signs, 2 different messages for mailings, etc. Both Robb Davis and Rochelle Swanson correctly stated there needed to be a community effort to step up and promote these tax measures but by putting two separate measures on the ballot they are inadvertently discouraging such citizen involvement and any citizen participation is going to be diluted toward supporting one measure or the other.

    Brett Lee also suggested and the Council gave the nod for a parks tax length of 20 years (the proposed road tax only for 10 years) justifying it by saying we have a permanent library parcel tax of an inflator (which is now up to $105/year!) so he thinks the public will buy a longer parks tax because we will certainly will always have the need. But Brett fails to recognize that the Library Tax was passed in a different time and the voting electorate now is much more alienated by government and taxes in general. And citizens demand more government accountability which is not necessarily provided by a 20 year tax measure. Fortunately, the road tax is for a much shorter duration (10 years) but this may be far too long for the average citizen to be comfortable writing annual checks.

    A final complaint I have about how these tax measure sausages were put together is that the list of acceptable expenditures under the road and parks measures is to broad. The Council included on the list for the road parcel tax streets, bike lanes, bike path resurfacing and striping which is what I suggested is what the public really wanted and could very easily and quickly be explained to voters.

    But the Council has also added traffic signals and signs; gutters, curbs, and sidewalks; and street lighting (fortunately, they left out bus stops). But I (and others) could still see huge amounts of moneys put into beautiful ADA accessible sidewalks with very specialized surfaces and street lights – like the recent work on 5th St and the corner of Poleline and Lillard in South Davis by the Safeway. All of these things are great if our basic street needs were being me but inclusion of these things as legitimate expenditures for road tax money could see huge amounts of the tax money gobbled up.

    Or the City may decide these new tax monies could be used to beautify the Downtown-Richards Blvd under-crossing with “signage” or completely re-signaling Richards and Olive due to the needs imposed by the big new Lincoln 40 development. Or start on a hugely expensive traffic light and signal replacement/upgrade program throughout town while still having bone-jarring potholes throughout our road and bike path system. All of these things may be nice but I think what the public really, really wants is to just keep our streets and bike paths paved and striped. Everything else should be superfluous until these basic needs are met. And I think voters would step up and fund these things if the message to them is clear.

    The list of expenditures in the proposed parks tax is even more broad and (IMHO) worse and includes

    Parks
    Greenbelts
    Swimming pools
    Street trees
    Public facilities
    Street lighting
    Open space (not covered by Measure O)
    Public landscaping
    Urban wildlife and habitat
    Recreational facilities

    There are a whole lot of things in this grab bag that have nothing to do with Parks or recreational facilities. For one thing, street lighting is an included acceptable expenditure under both parcel taxes. Public landscaping includes shrubery around bus stops and on median dividers. Should “Street trees” (which are mostly on private property) be included in the “Parks” Parcel Tax? And as written, City Hall could be refurbished or painted, or reroofed with “Parks” Parcel Tax Money as could work on a myriad of other “Public facilities” be included. Finally, it is not clear how “Open space (not covered by Measure O)” is different from “Urban wildlife and habitat”.

    Again, all the public really wants is for their parks’ grass to be mowed and efficiently watered without waste (and maintained without chemicals), for the park trees and shrubs to be kept pruned to remove dead or diseased wood, and for the pools to be kept open and maintained. It is going to be really tough for whatever campaign committee is ultimately formed to get out clear messaging for this hodgepodge of other uses.

    So as the current proposals are structured, I don’t think a clear message and compelling case can be made to the public with sufficient clarity to ensure passage of the two separate proposed measures.

    My recommendations for the Council are this:

    1) Combine the parcel taxes into one measure with a max 10-year duration (6 years would be much more likely to pass).

    2) Make the list of acceptable uses for spending tax measure money much shorter and clearly laser-focused so there is no ambiguity as to what the public is getting for its money.

    3) Make the language maintaining existing expenditures exceedingly clear so that current expenditures for the defined needs MUST be maintained except ONLY if the City’s General Fund otherwise drops – noting that the new tax money must always be spent on on the defined acceptable uses.

    4) Of less importance, I’d make the inflator based on CPI instead of a fixed 2%. There is a high likelihood that inflation will raise its ugly head in a huge way in the near future and having a fixed inflator right now may be good because it is slightly higher than the inflation rate. But if inflation roars back into high single digits like we had in the 80s, our 2% inflator will be severely inadequate.

    I think the Council really needs to think harder about messaging and the difficulties in running to two separate campaigns particularly if there are overlapping allowable expenditures.

    I would like to help run a campaign that combined both parcel taxes into one measure and that could be very easily summed up in one simple yard sign:

    Vote Yes on Measure __

    Fix our Streets
    Keep our Parks Green
    Protect our Property Values

    I realize the Council will need a lot of time to finish Nishi to get it on the ballot but they should also remember that these measures will potentially provide $4.5M/year (even at $149 per year). The Council must get this right if they are hoping to get the measures(s) passed.
     

    1. Howard P

      Of the three “priorities”, Alan, which are they in ‘rank order’, for you? As stated? Roads first, parks second, property values last? Please be honest….

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