The opposition to the two tax measures on the June ballot represents an interesting merger between the conservative Yolo County Taxpayers Association, represented by the current acting president Mike Nolan as well as the past acting president John Munn (interestingly enough, Mr. Munn is a one-time school board member and Mr. Nolan is a two-time school board candidate), and the old-time progressives Pam Nieberg and Don Price.
We start with looking at the argument against Measure H. The thing about Measure H is that it is basically an extension of the existing parks tax at $49, and the only twists are that it has an automatic inflator that will keep the present value (a good deal less than the original value) constant, and extend it for 20 years.
The opponents, however, act as though this a tax increase – which it fundamentally is not. They argue: “Davis does not have a revenue problem in maintaining our beloved Parks.”
That is not exactly true. The parks tax only funds a small portion of the total parks budget and this renewal does not increase that. The parks tax only funds $1.4 million of the $7.7 million budget for parks maintenance. The city identified about $1 million in additional annual costs over the next ten-year period. That means that the necessary money in infrastructure needs to maintain our parks is not coming in this revenue measure.
However, even if you argue we have sufficient money right now for parks, defeating this measure will slash that budget by one-quarter. So, while we could argue we don’t have a revenue problem, we would create one by defeating the renewal.
The opponents are right that the city has an employee spending problem and that, in 2004, the voter-approved sales tax went instead to employee compensation. Regarding the 2012 parks tax, however, they 
confuse the issue by throwing it together with the sales tax increases.
They ask, “Where did all that money go? Well, from 2012 to 2016 the average total salary and benefits for all full-time City employees increased over 25% from $99,849 to $124,954.” That’s not exactly true. The money from the 2012 parks tax is going, all $1.4 million of it, to parks. Some of the money from the sales tax did go to a Cost-of-Living Adjustment (although that COLA represents the only actually salary adjustment in the last ten years).
And this is not exactly true either: “But the City government has done virtually nothing to control employee compensation which now totals almost $38 million annually for just over 300 employees.”
The city has probably not done enough to control employee compensation, BUT, they have done a lot more than nothing, with a series of new bargaining agreements that have at the very least reduced salaries in real dollars since 2009.
The city has also brought on Bob Leland as a consultant, who has helped identify actual city costs over time – something that the city has done.
The question that the voters need to ask is – if the city is using the parcel tax for the parks to supplement a small portion of parks costs, does eliminating that money help us to fix the long term fiscal problems in the city or does it simply make the problems worse?
Meanwhile, the Vanguard has long identified roads as a critical underfunded need in the city. Thanks in part to the Vanguard’s efforts, the city has gone from paying virtually no money into the roads fund prior to 2012, to providing about $3 million of general fund money today.
The opponents play on the skepticism of the city, making the argument that “our City is now promising that this time they really will use ALL of the new taxes only for transportation infrastructure needs.”
Additionally, the city promises that now these new taxes “…shall not be used to supplant existing funding for street and bike path maintenance improvements. The baseline maintenance of effort budget for this purpose shall be $3,000,000…”
But they say this promise is hollow. Three million dollars is actually the annual amount the city is now budgeting for road repavement alone. But this new tax measure also proposes to fund a wide variety of additional transportation infrastructure repairs, including “…sidewalks, bike paths, curbs, gutters, street and bike path drainage, signs, striping, and pavement markings, traffic signals and street lighting.”
They write: “The current budget for maintenance of all of these other infrastructure needs is an additional $4,550,000 annually. So the City is really only promising to continue spending $3,000,000 annually for road repavement but there is no guarantee they will continue to spend the additional $4,550,000 annually now budgeted for all of our other transportation infrastructure needs.”
That’s an interesting point by the opposition. Clearly the council was intending to commit to spend the money on new transportation infrastructure needs. Council did their best during their framing discussions to limit what the money could be spent on as well as the ability for them to play bait and switch.
In their response, the proponents of the measure argue: “Measure I revenue must be spent exclusively on streets, sidewalks, and bike paths. It requires the City to maintain its current ‘level of effort,’ meaning that all revenue from the new tax will be added to the $3 million currently being spent and cannot replace it. It cannot be spent on new construction, only on maintaining what we have.”
The voters now will have to decide if we need $2.8 million to maintain our roads, streets and sidewalks.
—David M. Greenwald reporting
The question is have Davis voters hit the wall when it comes to local taxation? Will they finally say enough is enough?
Keith
They haven’t so far. What makes you think that this will be the “hit the wall” time? And one more question. I still haven’t seen either you or the YC Taxpayer Association say in dollars what they perceive as the “right amount” of taxation. How can you know whether we are over taxed or under taxed if you cannot state what you think is the right amount ?
And they don’t explain how we fund parks and roads sans new taxes
Nor Tia, have we seen your bottom line amount as to how many dollars, per household/leasehold is the “right amount”… “optimal taxation”… care to share?
Howard
Sure. I don’t have one.
But, then, I was not the one arguing that “the taxpayers” as a group may have “hit the wall” with no definition of what that wall was in dollars and how it was derived.
It’s not difficult or hard to figure out, you will know when they’ve hit the wall when enough voters say no. Hopefully we’re there now.
“And they don’t explain how we fund parks and roads sans new taxes”
Two good questions for a forum:
1. What is the optimal amount of taxation to run the city and provide desired amenities?
2. How do we optimally fund parks, roads, greenbelt and sidewalks?
How else will we pay for our unfunded liabilities?
Just for the sake of discussion…let us set up a hypothetical.
Say we have a City with a $50M general fund budget, with 80% of that budget ($40M) covering total compensation and the remainder ($10M) covering all the other GF expenditures. Now assume that the Council for that City understands that they need $5M additional revenue each year to pay for road repair (increasing the budget to $55M) and they ask the voters to approve the increase, which they do. Now let us say that five years down the line, total compensation has increased by $5M, so now the City has a GF of $55M with compensation costing $45M and everything else covered by the remainder ($10M). If the City wants to continue spending $5M on road repair, then in order to have the budget in balance they either need to increase taxes again or shift some expenses into an ‘unmet needs’ budget category (otherwise known as ‘acting dishonestly’). So the Council asks the residents to approve another $5M tax increase, but they can’t say it is for the roads since that is what they claimed the last increase was for, so this time they say it is for the parks. The residents, liking their parks, vote to increase their taxes. Now five years on, with total compensation increasing yet another $5M per year, the City’s GF budget, now $60M total, has $50M going to pay compensation and $10M to fund everything else. Over time there is no new money for services because it is all being eaten up by compensation.
In a nutshell, this is what has been going on in Davis for decades. It doesn’t really matter what the City says the increased tax revenues are going to fund, in the end, what it actually funds is increasing total compensation. Every tax increase (and more recently, fee increase) in the past two decades has eventually been eaten up by the increasing costs of total compensation. This will be true for as long as we refuse to change our approach. We can no longer afford the City that we currently have, and we need to find a more cost-effective way to manage our services.
Economic development is the only source of sustainable revenues for the City. Our ability to increase taxes is finite, and some indications suggest that we are already nearing the limit. We need to fundamentally change our approach, focusing on capping compensation and greatly expanding economic development while moving away from the status quo approach of increasing taxes and fees.
“Economic development is the only source of sustainable revenues for the City. Our ability to increase taxes is finite, and some indications suggest that we are already nearing the limit. We need to fundamentally change our approach, focusing on capping compensation and greatly expanding economic development while moving away from the approach of increasing taxes and fees.”
Agree with this point
There’s always kicking the can down the road, followed by mass civil bankruptcy.
I do not dispute Mark West’s “hypothetical” construct. This is how things have operated to a greater or lesser degree for years in our actual city. However, what he has omitted is also of importance.
1. No mention of effects of changes in the composition of the city council or mangers during the “hypothetical” time frame.
2. No mention of variable contribution of businesses during the same time frame including those that were projected to bring in more revenue than was actually the case.
3. No mention of factors that keep some businesses from occupying available space in either the downtown or the neighborhood shopping center.
4. No mention that perhaps some of the innovation center rejections ( or at least lack of support) were based on perceived inadequacies of the proposals, not just desire for no growth.
Who knew that city finances/revenue streams could be so complicated?
There has been no change in the collective behavior, so it doesn’t matter who the individuals are.
What businesses are you referring to? Do you have tax data for an individual business in town showing that it didn’t meet projections, or are you simply speculating? Either way, how do you see this altering the fact that increasing compensation is swamping new revenues?
Such as the restrictive zoning and protectionist policies that you favor? Once again, how do you see this altering the fact that increasing compensation is swamping new revenues?
Two innovation centers were proposed. One was almost immediately withdrawn due to the financial risk of Measure R making the project less viable than at a location a few miles north. The second was withdrawn when it became apparent that the all-powerful Keith O. and the City Council majority were unwilling to accept workforce housing at the site and the developers recognized that a commercial-only project was neither desirable (see: best practices for innovation parks) nor financially feasible in the face of Measure R. Neither project was rejected by the voters, but they were both negatively impacted by a previous voter decision.
It isn’t complicated. The answers are obvious and work every other place except, apparently, where certain residents and CC members choose to remain ignorant of economic reality.
Increasing taxes on residents is not sustainable and only works to make the City a more expensive place to live, harming those least able to adjust in the process. Economic development provides sustainable revenues for the City and increases opportunities for all residents to improve their quality of life, not just those with a secure income and an appropriate place (or two) to live.
What should be obvious in this discussion, but apparently is not to some, is that with an ongoing annual General Fund deficit in the $8-$15M range, and accumulated unfunded obligations of greater than $100M, Davis doesn’t need a few million more in new taxes. What we need is a General Fund in the $80-$100M range, which would be more typical of a city of our size. We will not be able to add $30-50M to our General Fund through new taxation alone. Doing so requires concerted and ongoing economic development.
Unfortunately, raising taxes is apparently the only approach our current CC majority and our City Staff understand, and their piecemeal approach of raising taxes and allowing increases in compensation to eat up the new revenue is what we can expect until we demand fundamental change.
In January, the city’s finance and budget commission was equally divided regarding whether or not there should even be a tax measure placed on the ballot. (Hopefully, I’ve copied this correctly, since the formatting does not lend itself well to copying and pasting.)
And, it is likely that the community will be close to closely “divided” (given the margin required) in June. No surprise there…
I care little about commissions’ recommendations/margins… when I vote, I weigh my judgement much more heavily than anyone else’s..
Thanks for the info tho’…
Howard: I was surprised, since those on the finance and budget commission are generally more informed regarding the city’s fiscal challenges and budget, compared to “average” citizens.
Perhaps puts the “crisis” in a somewhat different perspective. (At least in terms of immediacy, and perhaps without addressing underlying structural problems.) But then again, the specific reasons for these votes are not included in the minutes.
I think that divide reflects the fact that There really aren’t easy answers.
David: From what I gathered, it seemed that the opposition was more closely related to a failure to address the underlying spending structure. (But, the reasons were apparently not fully flushed out.)
All the more reason to discount a “poll”… note, it was not apparently a vote for a recommendation… such a vote would have failed on a 3-3-1 tally.
Am not an “average” citizen, whatever that means…
I’m surprised that you are surprised… I don’t “bullet vote”, I belong to no organization that tries to influence votes. I have very seldom been impressed by recommendations of folk that I do not know, or have ‘vetted’ as to their expertise. Some folk look at “creds”, such as unions, political parties other ‘organizations’. I weigh those lightly.
Maybe you do… if so, please don’t vote. If you base your vote on “likes”, or ‘groundswells’, please don’t vote. If you take input from others, then make your own decisions, go ahead and vote.
BTW the arguments for/against and rebuttals will have about a 2% influence on my votes….
Ron: there’s a legitimate question as to whether we need more cuts or tax increases. I prefer the hybrid approach and believe delays on roads will add $10 million or more to costs
Howard: Again, I’d have to strongly disagree, regarding the depth of knowledge that some on these commissions have.
For example, I doubt that most commenters on the Vanguard have in-depth, detailed knowledge regarding the budget and fiscal issues facing the city. I’m learning, but do not personally claim such knowledge.
Gathering information and knowledge from commissions and other sources does not necessarily mean that one has to agree with their findings. But, it can certainly provide insight that one does not personally have. Some of these folks have significant experience and knowledge.
David…
Without getting into the ‘exact number’, you have learned well, Grasshopper… the question is how to fund that, and, like you, I prefer the combination of cost reduction elsewhere, plus new revenue, as a reasonable approach for the foreseeable (5-10 years) future.
And, it’s even more “interesting” when those on the commissions disagree with each other. That’s when you can really learn about an issue, and perhaps even witness a “flushing out” of the underlying reasons for a disagreement.
And again – 3 commissioners voted against ANY tax measure (in January), for the June ballot at least. Interesting, at least.
Ironically a lot of the Vanguard commenters actually do have detailed knowledge of the budget. Howard probably has thirty years of background on it.
Not a comment regarding Howard (or anyone in particular), but a lot of commenters (and some on commissions) may have “agendas”. And, when there’s a more complex technical issue (whether it’s budgetary concerns, air quality, or whatever), the “truth” can become more easily obscured by those with agendas (which may, or may not be related to the technical issue, itself).
Based upon his prior comments, I had understood that Howard’s expertise was primarily related to roadways/traffic. (Regardless, I understand that anyone can also learn about budget and fiscal issues.)
Ron… how dare you ‘disagree’ with my opinion! [if you had made a positive statement, like “I view things differently”, I would not be posting this] Suppose I should wait to hear exactly what you or other folk tell me what my opinion and vote should be! Good luck with that… your words incline me to do the opposite of what you advise.
I did not question anyone’s expertise (except, now, here, yours). All I shared is how I weigh things… excuse me for thinking! For having an opinion and sharing it.
I await moderation… you sure know how to punch hot buttons, Ron…
And I have a 75% confidence level that you will report this comment. I fully expect my response will be deleted. Or at least a ‘warning’… I suspect you’ll get a full ‘pass’.
So, I “disagree” regarding the knowledge of some of those on commissions (and ability to learn from that), and you wig out? On a blog that encourages expression of opinions/discussions?
I’m not “advising” you to do anything, other than chill out. 🙂
Geez.
Truth be told, it seems that everyone knows how to push your “hot buttons”, and regularly do so without any intent. (Almost all of your “buttons” are hot, all the time!)
Ron… as you persist, I’ll say this as gently as possible…
I questioned no one’s expertise. You say I did, and “disagree”. Whatever.
So, I guess you view commissions as an organization that (inappropriately?) tries to “influence votes”? If not, then why did you even respond in the manner, above? And then, go on to assail me to “dare” (as you put it) to disagree with you?
Sometimes, it seems like you respond at times for absolutely no reason. (At least, no obvious reason.)
Responses such as yours are a reason why some avoid commenting on the Vanguard. it becomes a complete waste of time and energy, with no value.
Howard: I believe that you have now “softened” your latest comment.
Again, I’m not suggesting that anyone “blindly” rely upon commissions, and I realize that some who serve have may have their own agendas. But, I maintain that commission members (on average) have far more knowledge regarding their technical/subject areas, than “average” citizens.
Let’s just leave it at that.
Ron… look at David’s 10:07 post. He is correct… about me… there are 2 FBC commissioners who have, and/or continue to seek my input.
Howard: For what it’s worth, I believe you and David regarding that. I don’t believe that your knowledge is “average”, so perhaps my initial comments are not really applicable for you.
For me, I’ve found that “disagreements” between those on commissions (and/or with external analysts) is where the most interesting information can sometimes be uncovered. (Perhaps/especially regarding more technical subjects.)