On Tuesday, the Davis City Council will vote to put a new tax measure on the ballot for June. Two things are clear at this point in time: the city fumbled the ball in waiting until January to engage the public and waiting until the last possible moment to put the measure on the ballot. Second, even supporters of the tax measure are doing so very reluctantly.
In his interview with the Vanguard, published on Wednesday, candidate Robb Davis told the Vanguard he is “regretfully supporting sales tax.” He thinks sales taxes are “regressive” and wants any tax we approve “to come with accountability actions.” He thinks a parcel tax will be required due to the roads backlog. He wants to make sure that we are not adding infrastructure, but rather maintaining existing infrastructure, and believes that in addition there are further cuts that are necessary.
In an interview to be published on Friday, candidate Daniel Parrella used very similar terms to describe his reluctant support for the tax measure, particularly given his belief that young people are already being priced out of Davis due to high taxes and other cost of living issues.
At the same time, we have not seen a viable alternative. One commenter suggested that we balance the city budget first and then talk about new taxes as backfill if needed for the long term, but given the necessary timelines and rules governing tax measures, that does not seem viable.
The question would be how to balance the budget without adding revenue.
In response to Tuesday’s criticism of the Davis Enterprise editorial’s outsourcing proposal, Rich Rifkin responds that our critique suggests that the Enterprise claims, “we can solve the entire budget problem with outsourcing.” He argues, “It says no such thing. It simply says that there may be functions now being done in-house which could be done out-of-house more cheaply (and better in some cases), and these need to be explored as part of the solution.”
He adds, “As things now stand, the Council is set to raise taxes on Feb 11 without having exhausted all avenues for saving money without reducing levels of service. If outsourcing could save a little money, maybe the tax hike would not have to be so high.”
We do not disagree with that critique. In addition to failing to engage the public until mid-January at best, the council also failed to put other measures on the table. That said, the council has also made it clear that they have little appetite for additional cuts.
Outsourcing means laying off employees. Saving any substantial chunk of money by recouping the amount the city spends on pensions and OPEB probably involves laying off 50 to 100 employees.
As a short term solution, you are asking for both organizational and political trouble by laying off a large number of employees and replacing them with outsourced labor.
At the same time, such a move would wrongly focus most of the blame on the employees, when in fact the past city management, city council and even the public are culpable in past mistakes.
“If Davis does not consider more affordable ways to provide services, but instead raises taxes on all of us to avert a calamity, it will be asking a lot of residents who don’t have such luxurious pensions or gold-plated medical plans to get by with less. Is that fair?” the Enterprise asks.
In our view, the voters of Davis were sleeping for about a decade as the pay and benefits were pushed out of balance. The result is that, for the last seven years, we have asked city staff to take on more tasks with fewer employees and less pay.
In the end, if Mr. Rifkin only believes we can save some money by outsourcing, then the difference between the city adding a three-quarters cent sales tax versus a half-cent sales tax is probably minimal.
We support the notion of looking into all ways to save money, and it’s a reason we support the city examining the possibility of a POU as a way to save money.
That said, at this point, we see no way to avoid at least the June tax measure, without concrete alternatives.
This was illustrated well in the Brett Lee – Kemble Pope exchange.
Kemble Pope cited a survey of chamber members with more than half having no idea about this public shortfall and another 15 percent were only somewhat aware. Only 14% wanted no further reductions in city services.
“People are willing to feel the pain,” he said, at least referring to chamber members. “A good sixty percent said cut expenditures, keep cutting, we’re willing to give up services. We’re willing to give up programs. I don’t think that you understand truly the desire for the public to actually feel a little more heat rather than take on more and more debt for a bunch of goodies that people don’t think we actually need.”
He said to deal with the structural deficit and short term needs, “but this is, I don’t think, going to fly with the community.”
Elsewhere we have pointed out the flaws of Mr. Pope’s survey which seems leading at best and suggestive, if not outright directive, at worst.
The problem, as Brett Lee would quickly point out, is that there is no context for the respondents.
He then responded to Kemble Pope and suggested that, of course, the city should try to save money. He then said, “Perhaps next time you do a survey maybe we can ask some specifics. So when faced with a sizable deficit like the one we’re facing, perhaps you can ask your members if they would support closing a fire station and having a corresponding higher response time for various neighborhoods.”
“That’s the type of thing that would be required in order to bridge this deficit,” he continued. “Or perhaps they would be willing to close all of the parks to stop all maintenance on them, close all the pools, and all recreation programs and see what the percentages are.”
“I think I could stand in front of the Safeway and ask people if they want a more efficient city government, I think I’d be surprised if I got many noes,” he added. “I think on the other hand if I asked people if they were willing to pay more to maintain the current level of city services, such as fire and police, I think they would be supportive.”
So if the answer is don’t tax, we need to make that decision by Tuesday. We then have about four months, maybe five to find $5.1 million in cuts.
As Rich Rifkin wrote, “There is no legal reason we could not outsource the fire service, placing all of it under the umbrella of the UCDFD.”
That is very true and elsewhere we figured out the city might be able to save about $3.25 million if the firefighters were compensated at the same rate as their UC Davis counterparts.
“If the DFD were closed and the UCDFD took over all 4 stations in town, Chief Trauernicht could hire a new staff for the other 3 stations. DFD employees who were interested could apply,” Mr. Rifkin wrote.
“Because the DFD union has chosen not to sign a contract with the City of Davis, this is a particularly auspicious time to merge the departments under the UCDFD umbrella. Of course, doing this would be a political challenge. But if we had the will, it could be done. And it would save the general fund millions and millions of dollars over the next several years.”
Mr. Rifkin understates the political challenge. Merely proposed shared management resulted in two letters from other public officials in protest. Laying off all of the firefighters in the city and having UC Davis hire replacements would be mutiny, recall, and perhaps revolution.
I jest only slightly here. There is just no way that we can do that kind of action. It is the kind of talk for barrooms, not council daises.
That brings us back to the need for a sales tax.
There is a practical reason for that, as well. June 2014 is the only time they can do a sales tax increase. A sales tax increase is the only revenue measure the city can pass that only requires a simple majority. Waiting until the city balances the budget forces the city into the parcel tax – two-thirds majority route, that is just not practical to suggest.
I have asked this question before, and I will ask it again – does anyone have an alternative suggestion? You might want to come up with it before Tuesday.
One poster suggested that that is the job of the council to figure out, that we voted for them to deal with “these budget things.” The truth is the council has figured it out and if the public wishes for them to change their mind, they have to come forward with a VIABLE alternative solution.
I have seen no viable solutions that avoid a sales tax measure in June. I see some suggestions for ways that we might be able to reduce future taxes, but none that avoid a sales tax.
So to be clear, I fully support cost savings measures. I would love to find enough savings to avoid a separate November election, but for all practical purposes, some of which are self-inflicted and the city will have to explain themselves there, I see no way to move forward without a sales tax increase in June.
—David M. Greenwald reporting
Just say no.
And say yes to what?
So just to clarify your position: you oppose all peripheral development, you oppose any new taxes, you think the city should cut the budget to achieve balance? I don’t want to put words in your mouth, but that seems to be the sum of your positions.
We missed an opportunity… if 4000 of us had donated S200, pooled the money and taken the Seahawks by 30 points, we very well solved the fiscal problems. Woulda, coulda, shoulda.
All in on that one!
David wrote:
> I see no way to move forward without a sales tax increase in June.
Sad that David thinks there is no other way since an increase in the sales tax will impact the poor in town (that David often says he cares about) more than any other type of tax increase. The rich buy most non food items on line (just about anything you can get at Target you can get for abut the same price on Amazon Prime without going to the store) and don’t pay sales tax on food…
Explain to me how much three-quarters of a cent on the dollar is going to greatly impact anyone?
LOL, when something keeps creeping up on you inch by inch all of a sudden you realise it has become a yard. A school parcel tax here, another school parcel tax there, a parks tax, Measure O tax, coming plastic bag tax, coming parking tax, increased garbage fee tax, .5% 2006 sales tax, .25% CA sales tax increase as of 1/1/2013, library tax, etc…….
Talk about getting impacted.
Like global warming?
Not even close. E-commerce is about 6% of retail sales.
Of course taxes will impact the poor. That is a VERY unfortunate side effect of tax increases. But so is going bankrupt. Do you have another solution in mind?
I find it ironic that some only care about legislation that negatively impacts the poor when it also negatively impact them.
Where is the concern for the poor when legislation benefits the wealthy and hurts the poor?
Its in your recycling bin.
Or caught in the bushes somewhere, or in a farm field, getting exposed to UV rays and ultimately disintegrating.
LOL Don, thanks for the laugh. Or maybe 2000 ft. in the air being blown by the westerly gale winds on its way to Hawaii.
Does anybody had a list of city services, staff or infrastructure that are up for cutback consideration?
I have one to look at: how much do we spend subsidizing the UCD bus system and what would happen if we reduced the subsidy for a couple years?
It looks like most of the city contribution is the passing through of TDA and FTA grant money to unitrans. It looks like about $600,000 in TDA money and periodically up to $2 million with FTA money.
Thanks. TDA and FTA?
Transportation Development Act (TDA) Funding and Federal Transit Administration (FTA) Grant
I’m confused.
They spent $400,000 and are borrowing $600,000 for studies on becoming a utility provider.
I don’t remember voting on that.
Perhaps we need to replace our city council…
As a matter of curiosity, how much do you currently spend on electricity each year?
You think we need to vote on every expenditure that the city makes? You’ll get your opportunity for a new council in four months.
If they plan on spending $1,000,000 that we don’t have, then yes.
Since we saw what happened in 2006 when the SMUD issue was on the ballot, I think the voters are going to have to trust city staff and council over PG&E and it’s $10 million in campaign expenditures on this one.
I agree with Keith, the city’s timing is deplorable.
I don’t disagree that the timing and the city’s public outreach aspect here are quite bad. But that doesn’t make it a bad policy.
Fortunately city council elections are coming in June.
Maybe then we can do something about the bad timing of our current council.
Are you going to run keith?
If no one else runs, which of the current candidates will you vote for?
I’m not sure the “timing” is going to be better for at least 10 years.
For the sake or argument say that a 20% decrease in utility is possible, or lets say 10%.
If it is confirm that this possible, I would ask, is there a wrong time to do this?
Add that to the fact that the city, not PG&E will have control over how to spend $4.3 million dollars of PPP money.
It seems fiscally irresponsible not to to further explore this, at any time.
I agree with you. If the city can find a way to save money, they should. It would be interesting to see if PG&E will step up with a compromise here.
How is this trusting PG&E?
Putting a measure on the ballot allows PG&E free rein to make their case with their huge monetary advantage over anything that the city or advocacy groups can muster. Leaving it in the hands of the council at least allows decisions in local hands.
Where the ignorant rubes might be swayed by the PG&E money. Because unlike we enlightened elite who are too smart to be fooled, they are swayed by money.
Dunning gets it:
“GREEN, GREEN, IT’S GREEN THEY SAY … I realize this town’s well-heeled environmentalists are doing cartwheels over our proposed power grab, but for many hard-working young families in town, “going green” is a secondary consideration at best … if this mugging of PG&E doesn’t first and foremost lower personal power bills all over town, it should be a non-starter … if you can’t afford the power bill that arrives in your mailbox every month, it makes little difference if that power comes from the wind, the sun, the ocean, the rivers, the ground or from 6,000 monkeys furiously pedaling bicycles at the UC Davis Primate Center … if a city takeover of PG&E can lower our bills, then all the “green” stuff is wonderful frosting on the cake … but if it raises our bills, we shouldn’t even be considering it in the first place …”