While the council did not take any action on Tuesday, as Mayor Brett Lee noted, “We are not formally saying anything specific to the language,” nor were they “formally placing anything on the March ballot,” the council made their intentions clear.
The ballot language calls for “extending the existing one percent sales tax with no increase to the current rate,” and notes that it provides $8.6 million or so annually.
It also states that it would be in effect “until repealed by the voters,” and further noted that “all funds (stay) local)” and would fund city services like police, fire, recreation programs, roads, sidewalks, bike paths, and other services.
Dan Carson noted that the council “doesn’t over-promise” in the language – there is “northing here about 50-meter pools.”
One of the important issues for him was “the duration of the tax.” Councilmember Carson stated, “I support the ongoing permanent approval that that language calls for.”
He noted, “We have 20-year fiscal projections that show we need this money for the next 20 years and it’s silly to me to pretend otherwise.”
While he saw some value in having periodic sunsets to maintain accountability, on the other hand, he noted that last spring there was a statewide measure sponsored by the beverage industry that would have required two-thirds votes to approve new tax measures. When this measure passed in 2014, it passed with 57 percent of the vote.
When the roads parcel tax failed in June 2018, it received the same 57 percent of the vote. The reason that the sales tax passed and the parcel tax failed had to do with the difference in voting requirements.
By making this permanent, the city can ensure that a majority is required rather than a supermajority into the future.
Let me state that I agree completely with Dan Carson here. First of all, I have always cringed at the idea of “temporary tax increases” – while I understand that the tax increases sunset, they can also be renewed at the voter’s behest. And in a place like Davis, it is highly unlikely that voters will strike down a tax measure renewal unless the times are truly extraordinary.
Moreover, if the city is going to need that money for the foreseeable future, let’s call a spade a spade and say so. If the voters vote that down – then the city can go back to the drawing board. But the polling shows it is highly unlikely that the voters will vote this down.
This allows the city to plan into the future – again, pending voter approval – and that the $8.6 million will remain on the books.
While I am supportive of making the measure permanent, what I really do not understand is why the council stopped there. We don’t just need $8.6 million – we need another $8 to $10 million annual to plug the funding gaps.
And yet – nothing. Not a word. Not a question. Nothing from the council.
Will Arnold: “I really like the language.” He added, “I would be reticent about changing the language.”
Lucas Frerichs: “The language makes sense.”
Last Sunday we argued that, given the polling showing renewal support at between 71 and 77 percent and given the city’s fiscal concerns, why not at least consider the possibility of increasing it to 1.5 percent?
No one even entertained the idea. They are risk-averse – they want to be sure to pass the renewal because the city will be hurting without that $8.6 million in tax money.
But given the margins of support for renewal, the risk does not seem very high.
If Davis increased its tax to 1.5 percent, it would mark a half-cent increase again and that would generate around $4.3 million based on current estimates. That is about half what they need, but would be enough, along with the $4 million or so they currently set aside for roads, to close that gap.
Second, by going to 8.75 percent they would be on par with Sacramento, but slightly ahead of West Sacramento and Woodland. Is that really going to be a big deal? You are talking an extra half-cent of sales tax for every dollar you spend. That means if you spend $1000, you would pay an extra $5 than you would pay in West Sacramento and an extra $7.5 than you would pay in Woodland.
They did not poll people’s preference for a half-cent increase, but the numbers for renewal are overwhelming. The initial support they have is at 77 percent. Even after pushing the voters in a negative direction, they only drop it down to 71 percent.
Given that, unlike the parcel tax, this is a majority tax that needs 50.1 percent of the vote to pass, and that’s a really good margin.
It seems to me that if you have that big a margin, and remain in a fiscal hole after passing the measure, you should at least consider whether voters would support a bit more to actually close up that gap. I’m disappointed that the council did not even want to consider that possibility.
—David M. Greenwald reporting