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
David: I’ve forgotten: Does a parcel tax necessarily mean that single-family homeowners are charged the same amount as an entire apartment complex? (As is the case with the school district tax?)
Also, can you explain a little more about the “utility user tax”? (How that works, etc.) Also, why is that a “heavy lift” compared to a parcel tax? (If I’m understanding your article correctly, a lower threshold of approval is required for a utility user tax, compared to a parcel tax.)
It depends how the city does it, but theoretically in means an apartment complex would count as one parcel just as a home.
Utility user tax would be a rate based on consumption of some utility- water, phone, electricity, etc.
David: The existing structure for parcel taxes will eventually pit single-family homeowners vs. apartment owners/dwellers (assuming that hasn’t already happened). That creates a difficult environment to gain approval, from voters.
Why is a utility user tax a “heavy lift”, compared to a parcel tax? (Seems that such a tax would be allocated more fairly, between single-family dwellers and apartment dwellers.) Also, I understand that the percentage of votes needed for approval (simply majority) are at a lower threshold, as well.
On a somewhat related note, the development fees for apartment complexes need to be reviewed. As previously discussed (in other recent articles), it appears that new apartment complexes may not be fully paying for the impacts they create.
Easy to get votes from apartment dwellers… they get the goodies, don’t have to pay the freight… for SF HO’s, most consider even $400/year as ‘trifling’ for things they want, compared to their mortgage/other costs.
You seem not to understand about development impact fees… those have to do with expansion of capital facilities to accommodate growth… they are not an “endowment” for future operation/maintenance expenses. The latter is where the City is ‘hurting’.
Little/no GF monies go to capital expansion to accommodate/mitigate new development.
I don’t think this is a fair comment. You’re implying with it that it is cynical manipulation on the part of the council to get votes from renters. But that ignores the fact that they end up losing money on the exchange and they cannot legally tax on a per unit basis. The school district had a more fair system of $20 per apartment but legal challenges wiped that out costing the district a lot of money.
Moreover, what do you think the typical turnout rate is for apartments in a council/ parcel tax election – if it’s 20 percent that would be a high number.
Where’s the logic in a parcel tax that’s essentially blind to the use of that parcel?
To paraphrase a Tina Turner song, “what’s logic got to do with it?” David’s answer is substantially correct…
Paul Gann didn’t want to reform taxation… he was anti-government… at any cost…
Jarvis was primarily concerned with taxation, particularly HO’s with fixed incomes, whose property values were climbing (hence taxes) dramatically, particularly in urban/suburban areas. Got to meet him.
Interestingly, Jarvis did not actively support the Gann initiative, a few years later…
David, based on what I heard Tuesday night, the Council is unlikely to include water, sewer or electricity in the calculations of any UUT amount. That leaves Internet, Cable, Garbage, and Recycling … and possibly Natural Gas. The average monthly bill for those are relatively small compared to water, sewer and electricity. That means the revenue generated from taxing those limited utility charges will be very minimal … unless the Council approves a percentage tax rate that is much higher than what they have discussed thus far.
Making the voters say “yes” or “no” on a very small dollar amount tax at the same time that they are being asked to say “yes” or “no” on a much larger dollar amount parcel tax is inviting “default no” votes that might otherwise be “yes” votes … like Keith O.
I suspect that the “default vote” will be “no”, unless the council comes up with a way to spread any additional tax burden more evenly between apartment dwellers and single-family dwellers.
That is, unless the apartment dwellers turn out in sufficient numbers to “stick it to” single-family dwellers (whether intentional, or not).
An artifact of Prop 13
Another commenter has periodically asked me why it might be a “concern” if the percentage of renters (primarily apartment dwellers) increases, within the city (compared to single-family dwellers). As this occurs, the majority of voters (e.g., apartment dwellers) can essentially “force” single-family owners to pay a grossly disproportionate share of parcel taxes. (As is already the case, with the school parcel tax.)
As I pointed out to Howard above, the turnout rate in those apartments is extremely low. Students don’t turn out to vote in council elections.
David: I suspect that the voter turnout rate in apartment complexes is generally lower.
However, if say, 10% of the eligible population of a given apartment complex votes, that’s likely going to be a LOT more votes per parcel (even if compared to 100% participation of eligible voters in a given single-family dwelling).
The entire situation is starting to remind me of the “electoral college”.
On a related note, do you have any idea how many apartment dwellers there already are in the city, and how that compares to the number living in single-family dwellings?
Have you worked a polling place with a lot of student apartments?… I have… what I believe you will find that although they don’t cast ballots for CC, they DO for bond/revenue issues.
What is misleading about precincts where there is a high number of student or other transient renters, is that there is no automatic mechanism to remove their names from the roster when they leave town. So, they still show up as eligible voters, but “don’t vote”… if you mean by “%-age” of those registered, obviously correct. They’d have much higher %-ages if you discount the ‘ghosts’. Ask the knowledgeable folk at the Elections office.
In the past, I’ve seen 6-7 individuals at the same address and apartment number… when I casually ask the voter, they say they live alone, or one roomie, and have no clue who the other people are. Only the current residents actually show up to vote, in my experience.
You’re correct – but how many people are voting? Most students are not registered to vote here. I’ve seen the raw numbers during council elections and they are very low.
Oh, and some do cast absentee ballots in their ‘home’ precincts… when I was @ UCD, I (foolishly, as it turns out) did not register in Yolo Co, as I figured I had no business voting on matters with impacts after I left (yeah, know there’s at least one who would call that ‘self-righteous’)… spent 5 years as a student (3 on-campus) and now 38 as a ‘regular’ resident.
When I was a student, never thought I’d wind up living and working here… neither did my future spouse…