Here is the dilemma that the city faces – right now we are staring at a $5 million deficit for 2014-15, the next fiscal year. For most intents and purposes, I do not see a way that we can cut our way to a balanced budget – certainly not without huge additional concessions from employee groups that would probably at this point take layoffs rather than pay cuts.
In my column on Saturday, I laid out the need to bring the community together because, in the long term, the only viable economic option is economic development, and a business park can bring in the kind of revenue we need for long-term sustainability.
But there are catches to that. First, at this point, any major new development is going to be on the periphery and require a Measure J/Measure R vote.
As I argued on Saturday, we do not have consensus as to what this city should look like and we do not agree on how to move forward.
My fear is that this project will go by the wayside and go down to defeat at the ballot unless the people who run the campaign can speak to both sides of Davis. I hearken back to the public Innovation Parks meeting from October – it was a good meeting, but the notable absence in the room was obvious and palpable.
On the other hand, even with a good long-term strategy, we have to get through the short term. That requires that we pass a tax measure, in my view – I just do not see how we can cut our way to a balanced budget at this point without serious cuts to city services, and mass closures of parks, green belts and other amenities that make Davis what it is.
As I expressed in Sunday’s column, if this comes down to trust, the city has a poor track record. In 2004, voters were asked to approve a sales tax measure to avoid short-term service cuts, but instead of shoring up critical needs, the city used it for huge pay increases to public employees.
As one poster put it, “The question is one of trust. The city and the voters give us every reason to NOT trust that temporary revenue measures from tax increases and bonds (debt) will do anything other than release the red-ink pressure that currently curtails spending.”
“The clear view is that we are in a state of denial over our structural problems and fixated on getting our short-term fix,” he adds.
Mark West largely agrees, “I don’t think the City has a good history of either using the tax increases as intended, or of keeping them short-term. The only long term answer to our problem is economic development, something that we have actively discouraged for the past couple of decades.”
He adds, “A short-term tax increase by itself will be counter productive to solving our long-term problems. I think if we are going to see an increase in the sales tax, which I think is necessary in the short-term, the implementation of that tax should be conditional on concrete steps towards economic development.”
At least for me, that is a critical question – how creative can we get?
The city clearly cannot wait past the June elections to get a revenue measure and, while we have not determined what that revenue measure would look like, or how much we will ask for, the budget is due by the end of June and therefore we need answers in June.
On the other hand, the soonest we might vote in a citizens’ initiative on a business park east of Mace is next November – nearly six months after the revenue tax.
As Mark West notes, “In my mind those steps should include the annexation of sufficient land for the development of a significant business park and more flexible zoning of existing commercial space to allow for retail growth.”
He adds, “Raising the sales tax is a ‘stop gap’ measure to allow us to save some services from being cut while we put in place a long-term solution. It would simply be foolish for anyone to agree to implement the ‘stop gap’ effort without a commitment for a long-term solution already being in place.”
And still later he writes, “There is no reason to pass new taxes if we are not going to go forward with economic development as that is just putting off the more difficult decisions. We need to start the development projects now by moving forward with annexation of all the three parcels identified by the Innovation Park Task Force. That would be a meaningful investment in our future, and one that could be used to justify additional short-term taxes.”
While we agree, our fear is that there is no clear way to tie taxes to moving forward with economic development – or no way that we can see.
We can see voters approving a new sales tax increase, and then turning around in November and voting against a peripheral business park east of Mace.
As much as we have attempted to reduce the cost of services, we have probably reached the limit there. That leaves revenue as the last option.
The public will have to choose what it wants there to be – if it wants to limit future economic growth, then it will have to pay the consequences, either in higher taxes or reduced services.
—David M. Greenwald reporting
I don’t think you can annex a parcel without the consent of the owner, and what owner would want to expose him/her self to city taxes absent a guarantee that he/she will be able to develop the property?
While I agree that we need to take active steps toward development of a business park — including a very close look at the numbers to ensure the development will produce the kind of revenue the city needs — I don’t see any way of making a smooth transition from budget crisis to budget balance without a tax increase ASAP and possibly more cuts.
Not sure what advantage Mark believes that annexing the land would do, you still have to get an approval from the voters and they have to be sold on the project to vote for it.
There is no point in trying to link a sales tax measure to annexation/development proposals. We don’t even know what the peripheral landowners are willing to do. We don’t have any specific project to debate. There is no point in trying to appease the anti-tax crowd by making a sales tax conditional on development. If anything, that increases the likelihood of both measures failing.
Lay out the fiscal situation to the voters and propose a revenue increase. Continue the task force discussions about peripheral sites. Good peripheral development proposals should stand on their own merits and be debated and voted on when there is something concrete to work with. Annexing land before you know what you are annexing it for? Good luck getting the voters to approve that. You’re just gifting land owners huge land-value increases without tangible benefits to the citizens.
“There is no point in trying to appease the anti-tax crowd by making a sales tax conditional on development. If anything, that increases the likelihood of both measures failing.”
Maybe, but it might be worth a try. To get what they want people who strongly support one approach would have to support the other. Just imagine Frankly actively supporting a tax increase, it might be worth a shot just to get to see that happen;-).
The anti-tax crowd is probably going to vote no regardless. There is another group that I’m in that wants assurances from the city before handing over a check.
You have the ‘anti-tax crowd’ then you also have the ‘I’ve never met a tax I didn’t like crowd’ lemmings.
What does that have to do with finding a way to bridge the city $5 million until it can improve its tax revenues from business?
The same thing your ‘anti-tax crowd’ has to do with it.
My comment was in response to this: “There is no point in trying to appease the anti-tax crowd by making a sales tax conditional on development. If anything, that increases the likelihood of both measures failing.”
My point was that if you are looking at passing a tax measure, there is a group of people skeptical but who aren’t dead set against a tax measure. And that’s who this column was aimed towards.
Your point is what?
Here are some questions that come to mind. Are there assurances the city can give that aren’t dependent on a Measure R Vote? Besides a business park (or tax increases) are there other revenue generated endeavors the city could be looking into?
It seems unlikely since any peripheral business park is going to be a Measure R vote.
So maybe they need a contingency plan that is not dependent on a Measure R Vote.
I just don’t know what that would be.
If a local sales tax increase is not implemented in 2014, there will be more layoffs, more service cuts, and continued deterioration of roads and parks. That is regardless of whether progress is made during 2014 on identifying business park sites, developing plans, and putting them before the voters. There would be no revenue from any business park development for at least a couple of years. Thus, the ‘contingency position’ is further budget cuts. That’s it. There is no alternative in the short run.
Council members can promise to move aggressively on economic development. You can parse the incumbents’ public comments and assess their votes. Candidates can be specific as to what they would support, and you can cast your votes accordingly. But there is no practical way to link sales tax to business park development. You just have to trust the people you’re voting for and donating to.
I say bring on the service cuts and continued deterioration of the roads and parks. Folks that think like Don Shor have caused the mess. Now they need to accept the consequences.
I have proposed increasing local sales tax, economic development, and continuing the current reductions in spending. What have you proposed?
Our financial situation is much worse than what is being assumed by many of the posters here. If a local sales tax increase is implemented in 2014 as some have proposed, at best it will only increase revenues enough to cover half of the projected deficit, and less than a third of what is projected a few years out. If we are planning and acting realistically, there will be more layoffs, more service cuts and continued deterioration of roads and parks, regardless of the decision on the sales tax. The situation is ugly, and will remain so for the foreseeable future.
I agree that a local sales tax is necessary to address the immediate fiscal needs of the city. I think they may need a contingent long term plan in case they can get enough community support for annexing land to be used for a business park.
+1 ” You’re just gifting land owners huge land-value increases without tangible benefits to the citizens.”
Come now, nobody actually believes that jobs growth and economic development will do anything for the community but increase traffic and pollution.
Why not just accept that fact and move on? We don’t even have to go very far outside the box. What about the concept of a Davis transfer tax? Our only actual “growth industry” in Davis (besides the university) has been housing construction and development. It creates jobs and bring new purchasing power to the community. Why then, not create a transfer tax? Even Woodland has one. For those interested in how it works, here’s a link: http://www.vivaescrow.com/for-your-convenience/faq/california-documentary-transfer-tax
Another creative alternative, as we move to a more and more internet-based commerce (with corresponding reductions in local sales tax receipts), would be the consideration of the equivalent of a local tax (similar to a local sales tax) on the value of personal and professional services. Just think about it, but rather than being 100% dependent on retail sales activity as the only source to generate local municipal revenues – we could roll out the welcome mat for law firms, advertising firms, consulting firms and the like. After all, don’t these all these other types of businesses equally benefit from the services of our local government and municipal services – why shouldn’t they enjoy the same opportunity to help collect revenues to support our city services ?
Finally, for the true optimists in the group there is always to hold out that maybe, just maybe Santa will pay a visit to our city treasury this holiday season. Happy Holidays and congratulations to David ad the Vanguard for another great year!
“Come now, nobody actually believes that jobs growth and economic development will do anything for the community but increase traffic and pollution.”
I *think* this statement was meant as sarcasm, but in case it wasn’t: some of us do believe that a carefully-vetted business park proposal offers the potential to substantially reduce or eliminate entirely the structural deficit.
Sarcasm it is. I’m just going on what people do rather than what they say. Talk is cheap votes are not. Discussion of the need for revenue enhancers has been on the record for the past several years. It’s been clear that whittling at the bone has its limits.
Making a case for the virtues of job growth is still a problem in this community. The issue requires active, sustained leadership and a willingness to explore legitimate opportunities when they present – if you know what I mean.
I agree. Too many voters making their living from the soft money of government. They don’t see the need to develop the private economy. The money they are paid grows on trees. They can always rely on another union-paid lefty politician to get them a tax increase to ensure they can make it to their ripe old age of 55 so they can retire. Then it is someone else’s problem.
All that traffic and more low-life lesser-educated working class people… yuk! And some of them might go to church and vote Republican… double yuk!
Better to keep the hamlet small and quaint even if it means eventually bankruptcy. By that time most of us gubment workers will be retired and since our pensions are fat and our healthcare is fully funded, we can just move away when it gets bad enough.
I’m really trying to make a different point with this comment. Reality is this town would be nothing much without all those government jobs.
By that same token, the majority of our resident (along with about 90% of the California electorate) really don’t worry much about what creates jobs or how that translates to more local prosperity and revenues for essential mini services.
If the community is going to have a meaningful and constructive dialog up on ED we need to start with basics.
In that respect, our leadership has skipped an important step.
“We can just move away when it gets bad enough”
Interesting point since you have stated that moving away is exactly what you intend to do when you are ready to retire. It doesn’t seem to occur to you, despite knowing some of us personally, that for those of us who came to Davis largely because of its small town atmosphere, and who do not believe in growth exclusively for the sake of growth or financial benefit, regardless of whose it might be, would like to see it not change in character the way you seem to want. From my point of view this philosophy is very similar to the expression “carpet bagger”. The intent of some is to make money off changes in the economic structure of our community and then move on. Just as there is no guarantee that the City Council will act in any given manner, there is no guarantee that any particular company will choose to stay here in the long run or that any given company will generate the kind of revenue that is projected.
David asked an interesting question regarding whether the City had earned the trust of the community. I think it is equally valid to ask whether the private sector has earned the public trust since the recession. It would seem to me that neither the public nor private sectors are blameless for our current situation.
“From my point of view this philosophy is very similar to the expression “carpet bagger”.”
Interesting. The expression “carpet bagger” was used by the southern racists Democrats following the civil war to refer to the Republicans from the North who came in after the war. Now it’s being embraced by another generation of Democrats who want to hold onto their old lifestyle.
Very amusing discussion. Fascinating that people want “Assurances” of what the future will hold if steps are taken now to address visible short falls in revenue. Th ASSURANCE they can depend on is that the option of doing nothing (which they imply is OK with them) will seriously erode the quality of life and economic viability of their town. Then they will be the first to blame the consequences on “those politicians” when the real truth in the matter is that these anti everything – no growther types haven’t the testosterone to run for office and actually attempt to do some thing positive and helpful for Davis. They’re content to throw criticism from the sidelines. I’d love to hear what one of them thinks will bring Davis into the next two decades in a way that preserves the quality of life and meets the budgetary demands
strange comment scooter. the no-growthers are not the ones that have sold this city down the river with unsustainable labor policies. it was saylor, souza, asmundson, and puntillo that gave away the store in 2005 that set us on this road. imagine if we hadn’t given the firefighters a 36% pay increase and then protected them for the next five years as they ignored the crumbling roads and water infrastructure. we wouldn’t have a $5 million deficit. i’m sick and tired of the blame being put on the no growthers, they didn’t sell us out to the firefighters and labor as a whole.
DP. That is bullshit and you know it. Davis has not had a business friendly council member that I can remember. You appear to be doing what the left is fond of… blaming others for the mess they create. This city has been solidly liberal democrat. The politicians have been solidly liberal Democrat. You know that no conservative could ever win a seat on the council.
The blame is completely on the no-growhers and the liberal Democrats that have run this town and run the city budget into the ground. And they are one in the same.
I am sick and tired of lefties grabbing and holding power from their union benefactors, and then slip into victim position blaming conservatives for the mess they create.
Scooter is absolutely correct.
i was anticipating that response, i wasn’t anticipating that from you.
so let’s run some numbers.
in 2005, saylor and company approved what amounted to a 36% pay increase for firefighters, twice that of police. in 2000, police and fire made about the same. so too did ucd fire and cod fire. if the city had kept even with ucd, they would have somewhere between $1.8 and $2.3 million in savings.
had they then taken about half of that savings and put it into roads, we’d not need the influx of money into roads that we are seeking now.
so with two decisions by saylor and company – to fund fire and not fund roads, we could eliminate most of the current deficit today. and even if we had used that savings at some point to kill the current 2008-2012 deficits, we would have more margin to cut on personnel and probably would not be facing the deficit we are now facing.
Website is very unstable on ipad.
My point was/is that the those complicit in the public employee union campaign contributions for higher pay and benefits game comprise the majority of the no-growth and extreme slow-growth set.
I don’t disagree with your point back to blame certain city council members. What I disagree with is your attemmpt to separate the lack of economic development from the overspending.
It is really ironic that these folks have been bedfelows, but they have previously formed a power relationship.
I found it interesting that nobody from the city employee groups spoke out in opposition to the council decisions to put Mace 391 into yet another ag easement. But then those union-Democrat-no growth aliances are historical and sticky even as they become toxic to each other.
Note that my point is one looking backwards in response to your point looking backwards. I agree that today there are more people previously complicit with the overspending that are now on the bandwagon for turning the clock back on city employee pay and benefits. And some of these folks are still in the no-growth camp.
You are absolutely right DP, the no-growthers are not responsible for that calamity of the unsustainable labor practices, but they are responsible for two or three decades of blocking meaningful economic development in town. The reality is that there is plenty of ‘blame’ to go around when it comes to understanding our current financial mess.
You are welcome to blame Saylor et al. for their failures with the expenditure side of the ledger (they deserve it in my opinion), but you have to look in the mirror when it comes to the failures on the revenue side, and both failures are equally responsible for the situation we are in today.
i’m glad you acknowledge the first part of the problem.
but blaming the failure on the revenue side on the no-growthers doesn’t fully pan out. there have been no economic developments put forward in the last twenty years other than target – which passed in 2006. the two measure j votes were the 2005 measure x and 2009 measure p. both of which were defeated 60 percent and 75 percent respectively that goes way beyond no-growthers.
Economic development is not synonymous with building more houses.
Look in the mirror DP and decide when you are going to become part of the solution.
Further, both X and P were residential proposals, with no meaningful economic development components.
Come on, it’s Christmas, we shouldn’t be fighting with each other over who is to blame for our dysfunctions, that is something we should be doing with our families. MerryChristmas! Go forth and fight with your loved ones!
What happens when…
…you keep replying to…
…the replies…
…does the text…
Apparently, what happens is you crash the database.
But it’s okay, it’s back now.
Fewf, I thought you shrunk into oblivion.
Re-litigating the past won’t solve the future. There are different ways to skin the cat. We can reduce the workforce which we have done. We can get concessions which we have done. We can do business development which we can do much more of. We can raise taxes which we have done. It seems business development is the one we have concentrated on the least. Anyone who argues anything is off the table must accept that it places additional burden on the other elements of the budgetary equation.
David is right we lack consensus so it is difficult to act. We end up like Cannery with different groups demanding conflicting outcomes. This is the problem with measure R every one votes no because nobody gets exactly what they want.
We’re still working on the new comment system – at this point it appears that you can’t post unless you are registered.