If the polling is correct on the sales tax – and we have no reason to believe otherwise – the measure should cruise to an easy victory. Truth be told, the city and council have had an uncommon nervousness about the prospects for renewal – even though status quo tax measures in Davis will invariably pass and get renewed without much in the way of commotion.
In a way that was too bad. As I pointed out a few months ago, with polling as high as 75 to 80 percent for renewal at the same rate, why settle for the status quo? The $8.6 million that the current measure generates would cripple the city if it were cut off, but, by the same token, its passage does little to move the ball forward.
That is because even with the $8.6 million the city remains AT LEAST $8 million in the hole annually. By going up to a 1.5 percent tax instead of a 1 percent tax, the city could add another $4.3 million to its coffers. That would more than replace the loss of the parcel tax for roads two years ago – and do it on a majority vote rather than a two-thirds vote that ended up only generating 57 percent support and thus losing.
The only thing that the city actually “gains” from this sales tax measure is no sunset date. That’s a low bargain at best. As we pointed out, there was little chance a status quo tax in Davis was going to 
face any kind of real challenge.
In fact, while the school parcel tax drew opposition, there was nary a murmur of protest for the sales tax.
So one critical question is why did the city shoot so low when it had so much banked in terms of support and so much need for extra revenue?
Perhaps even more amazing is that there was absolutely no public discussion about expanding the sales tax, despite the Vanguard raising this very point several times.
This of course isn’t the only lost opportunity. A reader wrote in yesterday to lament the fact that there was absolutely no “legitimate discussion” around this renewal about the “community’s miserable, per capita performance on this metric.”
The 2017 State of the City report makes passing reference to it: “Although Davis represented around 32 percent of the countywide population in 2014, according to the BOE, retail establishments in the City of Davis facilitated only 15.6 percent ($589,194) of countywide taxable sales, compared to West Sacramento and Woodland which facilitated 36.7 and 24.3 percent of countywide taxable
sales.”
This was the subject of the Vanguard’s 2016 analysis on Davis lagging in per capita retail sales.
Our data at the time showed Davis generating $8430 in retail sales per capita, compared to over $15 thousand for Woodland, $22 thousand for Dixon, $26 thousand for West Sacramento, $28 thousand for San Luis Obispo and $36 thousand for Palo Alto.
A comparative analysis showed that Davis trailed other college towns (comparable to Claremont but behind San Luis Obispo, Chico, Isla Vista and Berkeley) in this regard, but also behind regional counterparts like Woodland, West Sacramento and Dixon.
The city seems to suffer from two separate problems here.
First, it has failed to address, since 2013, what has become apparent – a lack of resources to fund basic infrastructure. In 2014, the council put a sales tax measure on the ballot. It was understood at that time that the sales tax measure would close what was an immediate $5 million structural deficit.
But at the same time, it was recognized that the city had over $100 million in unfunded infrastructure costs – we now know that number is at least twice that and continues to grow. However, the council in 2014 failed to put a parcel tax on the ballot, failed to put a parcel tax on the ballot in 2016, then finally put the roads parcel tax on the ballot in June 2018 – running up against the parks tax renewal, and it failed.
As we correctly predicted in 2018, the loss of the parcel tax would mean that the city would not have an opportunity to address the roads deficit until at least 2022. As we have pointed out, that is entirely by choice as the council did not even consider the possibility of expanding the sales tax to 1.5 percent.
The second and related problem has been the lack of communication from the council about their fiscal shortcomings. If you look at polling, most people think our fiscal condition is good or fair.
The reality is that this is not the case. The city is running about an $8 to $10 million shortfall – a shortfall that most of the public seems completely unaware of it. A lot of this shortfall would disappear if Davis went from being near the bottom in retail sales per capita to near the middle tier.
As most readers understand, the plan to close that gap has been a commitment to economic development. The city has over the last decade either consciously or unconsciously moved away from the notion of augmenting retail sales in the traditional sense, and is looking toward developing its high tech sector that will bring in both augmented property tax as well as point of sales tax to help close that gap.
We could see the Aggie Research Campus on the ballot perhaps in November of this year. And yet, the council has once again missed an opportunity to connect all the dots here and show the public that the lagging retail sales connect both to our need to renew the sales tax as well as our need to develop more bases for revenue.
As our reader notes, “[A]ll we get is silence and cheerleading for renewal – without any meaningful discussion.”
That lack of discussion which the Vanguard has been calling for since at least 2014 has bitten us, in the loss of the 2018 parcel tax and may well doom us again in 2020.
—David M. Greenwald reporting
“a shortfall that most of the public seems completely unaware of it”
What polling are you referencing or what other evidence do you have of this assertion?
The retail sales gap is stunning for Davis. Is there a source that breaks down the sources of retails sales by community?
Richard, I disagree that the retail sales gap is stunning. It is a very clear result of several factors. First and most important, Davis is not a regional economic hub (like Chico is for example). None of the things that Davis arguably is are retail sales generators … a University town, a retirement community, and a bedroom community. Second, Davis is not a tourist magnet. Third, what little retail sales demand that Davis residents actually generate is very susceptible to cannibalization by Internet sources.
Matt – appreciate this post as it aims back toward what I was hoping would be discussed.
“First and most important, Davis is not a regional economic hub (like Chico is for example). ”
Comparing Davis to Dixon, West Sac, and Woodland I think is instructive – it is not a regional hub, but neither are the other cities. Looking at leakage might be a good metric to understand what is troubling Davis. Bottom line: the average person in Davis probably purchases a sizable number of sales tax eligible goods in other locales.
This has been true for quite some time. The first Core Area Specific Plan the City produced came about in part because city residents reported that greater than 50% of their purchases were made in neighboring cities because the items were not available in Davis. Over the years we have made several plans to address the problem but have consistently failed to implement them. You simply cannot expand your retail sector if all of your focus is on protecting what limited retail you have from the competition (Save the downtown!). Matt’s analysis is wrong. The retail sales gap is a direct consequence of decades of misguided City management.
Comparing Davis to Dixon, West Sac, and Woodland I think is instructive – it is not a regional hub, but neither are the other cities.
You are thinking in the narrow Davis mindset David. Woodland absolutely is a regional hub for the agricultural economic region that surrounds it. In addition, when agricultural business transactions take place, the people who have “come to town” in order to make those agricultural transactions, patronize other non-agricultural Woodland businesses.
I agree that Dixon isn’t a regional hub, but its location midway between Sacramento and Fairfield makes it significantly more of a hub than Davis is. Further, the population of Dixon is only a quarter of the population of Davis, so (for example) the sales tax generated by the WalMart has 4-times the per capita impact as it would if it were located in Davis. Note: the Dixon WalMart reports 400 employees, while the Davis Target reports less than 116 employees (the cut off for being listed in the Top 10 employers in the City of Davis 2017 CAFR). The size of the Dixon WalMart is an anecdotal argument that while Dixon is not a full-fledged regional hub, it is arguably a meaningful hub of its modest-sized region.
I’m wondering how Davis compares to other towns, regarding taxes brought in by restaurants, bars, etc. Seems to me that Davis has an advantage over some other towns, regarding the relative amounts of these types of businesses.
(And, how that compares with retail sales tax – regarding tax rates, percentages that the city receives, etc.)
And exactly how does that relate to the pros/cons of the sales tax extension measure? Please elaborate… would the information you wonder about, affect your vote?
I know it will not affect mine…
If you think it’s irrelevant, why would you want to ask an irrelevant question, yourself?
The claims is that Davis lags in per-capita sales tax. Some claim downtown is struggling, despite the plethora of restaurants which seem to be doing well – and resulting challenges regarding parking in the downtown area. Downtown was never a major retail center.
Perhaps if you don’t know the answer to my question, you don’t really have anything of value to add.
For what it’s worth, I agree with David, in that a sales tax rate increase should have been explored. Perhaps matching nearby communities which have higher rates.
I don’t understand why a council would feel “responsible” for a possible failure of a measure (e.g., by taking a needed “risk”). Let the city deal with the consequences, if it fails.
We’ll assume you’ll voluntarily adhere to those very same standards when you claim/posit things. Called “role-modelling”… and, not a bad concept. Mark did cite the original Core Area Specific Plan. Some of his post might be Mark’s opinion of how that Plan was followed/implemented. Some may be factual.
I find it curious to use the word “need”, as opposed to “should”, “could”, or the phrase “it would be helpful if”… but you don’t NEED to justify your wording…
Fact, or opinion? [edited]
Crosswalks, bike lanes, travel lanes. As they do now. [edited]
No.
And, what will be the impact of a significant increase in those crossings? (Here’s a “hint” for you – it’s in the EIR disclosures, as noted by another commenter. And, the results aren’t “good”. Should we go ahead and look up exactly what it says, again?)
Basis for that comment? Isn’t the site about the same size as the former Families First / Sterling site?
I have posted the links before but will do so again since some appear to be unaware of how to use Google…
1961 Core Area Specific Plan http://www.davishistoricalsociety.org/7-exploding-1946-71/Livingston-BlayneyDavisCoreAreaPlan.pdf/view
Rather interesting discussion of the plan and its impact: http://www.davishistorytoday.org/2017/08/the-davis-core-area-plan-of-1961-moment.html#more
Every CASP and GP that followed, up to and including the current downtown plan, all build upon the basic ideas found in the ’61 version. It is rather interesting to see how the vision has evolved over time. The City website has links to more recent versions of the GP and CASP for those interested.
All of us.
Thank you for reposting those links Mark
Ditto…
Any plan from 1961 probably “assumed” that sprawling development patterns would continue into the future – including for Davis.
Instead, Davis pretty much took steps to protect its downtown, until now at least.
What Davis downtown does “best” is to function as a place for restaurants, bars, and entertainment. Nothing needs to be “fixed”, regarding that. In fact, housing is not necessarily a good mix with those activities. Nor are the additional traffic/parking challenges that would result.
Any housing that’s actually built downtown would be expensive, to boot.
If there was truly a potential demand for a vast increase in retail space, perhaps there wouldn’t be a proposal to turn University Mall into what is primarily another megadorm.
And, perhaps the former Davis housewares building wouldn’t be for sale, and University Commons might be fully-occupied. (Perhaps I’m leaving out a couple of other examples, as well?)
Correction – “Davis Commons”.
Perhaps Hibbert’s could be included in that list, as well.
I guess I have a question Ron – the University Commons project proposes keeping the same footprint for retail in the main building and I think add a couple of pads (not sure if that’s the current proposal and can’t look it up at the moment) – why is adding residential to that footprint a sign of anything other than the need to better utilize existing space?
https://www.cityofdavis.org/home/showdocument?id=12085
It depends upon what your definition of “better use” is.
Regardless, I take it as a sign that there’s limited demand for retail/commercial space, vs. residential space. Even though some are claiming that the city has an “imbalance” (shortage) of commercial space, compared to residential space.
I’m still wondering how these students are going to get across the street (to UCD), via already-impacted intersections.
In response to Don’s comment, someone else has repeatedly pointed out that the University Commons proposal is not maximizing the potential retail space, even under existing zoning (as I recall). Some of those comments may have been subsequently deleted, but it’s difficult to tell at this point.
By the way, isn’t there sufficient acreage at University Commons to include an Affordable housing site – as was apparently just funded at the Sterling site?
Of course it depends on the definition of better use – that’s an entirely subjective standard. But it does negate your other points made above about sufficient demand for retail.
Not at all. There’s a slight increase proposed due to the MASSIVE amount of student housing proposed for the space above the mall.
If you “throw enough new people” at a declining market, you will still get some “positive movement”. However, you might ask yourself if it’s worth the trade-off. (We can discuss some of the negative impacts of doing so, if you’d like.) This is essentially the same thing that some are proposing for downtown.
I noticed that you disregarded my question regarding a possible inclusion of an Affordable housing site, on this several-acre infill parcel.
So ignore smart growth principles by putting people near jobs and commerce? Maintain low density and single story developments? Push new growth to the periphery? Is that really your position?
What jobs? Are you advocating for inclusion of innovation-center type businesses on this large infill site, which happens to be “within 200 yards” of UCD? (Maybe not a bad idea!)
Overall, both have practical limits. Given our current system, I don’t view dense infill as “preventing” sprawl.
I view it primarily as a retail mall. For the most part, not the location I see for high tech businesses and innovation. Those type of high tech I see as a better fit on the south end – Area 52 and URP.
Not answering for Ron, but it seems “megadorm” is like other buzzwords, used by several folk… kinda’ like “weapons of mass destruction” (WMD), “the Red Menace” (circa 1950’s), “clear and imminent danger” (still current).
As the University commons moves forward, perhaps we’ll get a clearer view of existing retail space vs. proposed. Right now, from what I’ve read it is a “push” or a modest increase.
Without “knowing the answer in advance”, again, I”m wondering what impact CostCo has had on Davis retail sales, accessed via what’s been informally referred to as the “CostCo Highway” (by Bob Dunning, I think).
Frankly, it’s pretty tough to compete with that.
And if Costco has had a negative impact, what is the remedy?
What makes you assume that there’s a “remedy”?
If not a ‘remedy’, why your question/wondering? If “it is what it is”, what does that have to do with the Davis sales tax renewal issue?
Meant as honest question…
Just a topic for discussion/consideration.
In the meantime, it would be wise for Davis to try to hold onto what it has, in terms of retail/commercial space.
The same type of issue when discussing the decline of brick-and-mortar stores, due to online sales. Which is an issue that’s been pointed out repeatedly, on here when this subject comes up.
There are a few retailers that seem to be doing well – Costco being one. Of course, a lot of CostCo sales are grocery items, which I understand aren’t subject to sales tax.
Has ‘always’ been true… when I was a student, didn’t have much discretionary money… even in the 70’s, there was a “premium” to be paid if I bought clothes, durable goods in Davis… I waited until I was home… cheaper… DL&H and Wingers were particularly bad (Lawrences was better for clothing), as they saw themselves as the “only game in town”, particularly for students who usually had no cars. Seemed like they had a 5-10% mark-up compared even to the Bay Area… my home base at the time…
Davis has had a lot of “boutique” stores in the Downtown… when you could do better for same/equivalent, at a Mervyns’, Wal-Mart, etc. Many overestimated their ‘niche’.
I’d suggest that the moderator post the number of comments that he is deleting in this article, as well as in other articles.
For one thing, it appears that a cited quotation on this page no longer exists. It also appears that a commenter may be responding to “himself”, as a result of the deletions. Again, citing a comment that’s not even included in his own response to himself.
What would be nice is being able to discuss moderation without getting deleted.
#doh!#
But seriously folks, what would be nice is if the deletion were noted along with the reason why – cited from board comment policy. I have too often gotten the “you should know why” treatment. Not cool.
The problem is that it really isn’t anyone’s business why posts are being pulled, and citing the reason simply invites side-tracking the thread. If the individual has a concern, that person can contact me directly. By definition, discussing it here is off topic and is specifically not allowed.