Davis, CA – The ballot arguments for and against Measure Q – the city initiative that – if approved – would increase the sales tax by one percentage point have come out.
One thing that is interesting to note is that Davis, West Sacramento and Woodland all have similar measures on the ballot to increase the sales tax by one percentage point.
Of note here is that while the city of Davis projects this to add about $11 million annually, Woodland’s would add $16.5 million annually and West Sacramento’s $20 million annually.
That once again demonstrates the lack of retail sales in Davis compared to Woodland and West Sacramento – both of which are still slightly smaller in population to Davis (even more so during the school year when Davis has an effective population well above its stated amount).
As I have continued to harp on – this is a self-inflicted wound that is not getting any better.
The second point I would add is that while some suggested that if Davis were to raise its sales tax, they would no longer shop here in town. Leaving aside the question as to how much people shop in town for sales taxable items to begin with (see the data above), but the fact that many regional areas are similarly raising their taxes kind of negates that threat.
Add to that, sales tax would appear to be a natural area for additional revenue when you consider that local cities are adding $11 to $20 million in revenue and the typical hit on the average person is going to be fairly negligible. Against, if you purchase an item for $1000, you are only paying an additional $10 on the tax.
That’s a fairly big bang for a fairly small hit.
Nevertheless, looking at the actual ballot arguments several points stand out.
First, I notice that the signatures on the yes on Q side are all from current or former elected officials. In fact, the primary five signatures are from former mayors – Lois Wolk, Robb Davis, Brett Lee, Gloria Partida and Lucas Frerichs – only Partida currently sits on the city council.
While I understand that there is a thinking that former and current elected officials have the seal of approval from the voters, there is also the argument that the No side has made that the council is out of touch and irresponsible and so in some ways not having any “private” citizens plays into that.
On the other hand, the No on Measure Q has NO ONE who is or has been on the council. Again, that could play either way. What does jump out at me is there is a distinctly conservative flavor of the signees – you have the President of the Yolo Taxpayers Association, the former chair of the Finance and Budget Commission and Business Owner Jeff Boone.
Then again, you have Alan Pryor who has generally supported tax measures, and Elaine Roberts Musser who has as well – both are fairly angry about the commission situation and the state of things.
The flavor of argument overall is one of anger over fiscal irresponsibility by the current and past councils.
They argue, “The Davis City Council conveniently blames our fiscal problems on recent inflation and unspecified “additional services”, but is pushing to increase taxes FOREVER.
“The real problem is our Davis City Council has irresponsibly granted excessive salary increases to Senior Management and Firefighters while the city is in dire fiscal straits. The latest salary increases, granted by the current Davis City Council, will cost taxpayers millions of dollars over the coming years.”
They have a strong point here. A lot of the city’s fiscal problems are related to fiscal irresponsibility over the last 20 to 25 years. The Vanguard has spent a lot of time and energy demonstrating where this started.
I am a little disappointed that they have only focused on the expenditure side – because there is another side of the coin here – the city has failed to solve the revenue side of the equation – and I don’t mean with more taxes. I mean with economic development, keeping the downtown strong and expanding the city’s retail base.
At the July Davis Downtown meeting, Kelly Stachowicz, the Assistant City Manager and Katie Yancey, the Economic Development director cited the fact that Davis in its downtown has a vacancy rate of 17.4 percent, whereas the Sacramento Region has a vacancy rate of 7.7 percent overall.
This ties into the expected impact of the actual tax in Davis being only 55% of that West Sacramento.
The No on Q argument closes with: “Say NO to irresponsible spending that has gone off the rails. Tell our Davis City Council that there will be NO more money until they 1) create a plan to use our tax dollars wisely, 2) stop the runaway escalation of employee compensation, and 3) implement independent financial oversight controls.”
It sounds good – right? But how practical is it?
For example, in the last ten years, the voters have voted down three projects with Economic Development components and one parcel tax that would have go to improving the roadways.
Has that changed fiscal priorities by the city? Drive down a lot of roads and they are in just as bad a shape as they were a decade ago – maybe even worse. The city has not changed their fiscal policy. If anything things are only getting worse.
We will see what the voters end up doing. But even if the voters end up supporting the tax measure – which given everything we know is still the most likely outcome – the suggestions put forward by the No on Measure Q side should be heeded.
Holy Cow! David wrote an article that reflects what I and others here on the fiscal econdev train have been saying for a while now about the woeful state of economic development in Davis. The need for the city to keep taxing the population because it can’t increase sales tax revenue through increased retail sales.
I don’t go downtown very often these days. The movie theater is horrible (they barely run the air conditioner and it’s generally stuffy and warm…even my temperature tolerant kids don’t like it); lately we’ve been going to Woodland or Vacaville to see movies. But just yesterday we were downtown around 11:00 on G street. It was deserted except for some homeless people sleeping in the walkways. I looked around and saw empty shop spaces, tattered and torn awnings and faded exterior paint everywhere. I walked over to the Avid Reader and there was a little more activity on 2nd Street and on F…but it’s still not that much better. It’s freakin Saturday morning and downtown looks like a rundown ghetto. I know there are plans to fix up G street and turn into a mini-park. But that’s not going to magically fix things and create a sudden flood of new business and businesses to the area. If you go to University Ave in Palo Alto or College Ave/Shattuck in Berkeley on a Saturday morning; it’s not dead…it’s lively, busy and generally one of the most crowded times on those streets and for shops on those streets.
Here’s the thing; all the econ development stuff is linked. Downtown businesses have in the past opposed peripheral retail. But generally stuff sold on the peripheral isn’t the same kind of stuff that people look to buy in a downtown area. Business parks and incubators….etc…..that creates the need for more business services for those companies; lawyers, bankers, accountants, insurance…etc… all become more prominent in the business community. So even though that R&D or manufacturing facility isn’t located downtown (how could it?….did HP set up in downtown Palo Alto?) or even a business incubator….the professionals that service those businesses are the kind of businesses that locate downtown. Those professionals create a desirable target market that attract new business so that existing retail businesses grow and new retail businesses show up to serve these professionals.
But as long as there is a stranglehold on peripheral development of any type the myopic and misinformed as well as those idiotic retail store size restrictions (seriously the Bel-Air in Woodland is a much bigger and nicer grocery store than anything in Davis. The Nugget in Vacaville is much bigger and nicer than the ones in Davis.) the this town will slowly gasp for air fiscally speaking in trying to keep up it’s current standard of living.
Keith
I wholeheartedly agree. We started strangling Davis when the voters turned down the Richard Blvd underpass expansion. Getting downtown is increasingly difficult and South Davis is really cut off. West Sac and Woodland have really taken away Davis’ sales. We need to think much more concretely about development plans, or we’ll just spiral down to losing services and amenities.
David Greenwald said … “I am a little disappointed that they have only focused on the expenditure side – because there is another side of the coin here – the city has failed to solve the revenue side of the equation – and I don’t mean with more taxes. I mean with economic development, keeping the downtown strong and expanding the city’s retail base.”
You, and everyone in Davis, shouldn’t be a little disappointed. You should be a lot disappointed … in the City’s handling of both expenditures and revenues. The Argument For the additional tax starts, “Measure Q is critical for the health, safety, and financial stability of Davis. While our community has grown and costs have increased, revenue for city services haven’t kept pace.”
A simple fact check of that ballot argument statement clearly shows how disappointed ALL Davis residents should be.
Fact Check #1 of “While our community has grown” … The over the last Census decade the population in Davis has grown at a rate of less than 0.2% per year (from 65,622 to 66,850). The number of businesses in Davis has shrunk precipitously and as reported by the City’s Development Director downtown has a vacancy rate of 17.4 percent. Arguably our community has shrunk, not grown. Fact checking organizations would label that argument as “pants on fire!”
Fact Check #2 of “costs have increased [and] revenue for city services haven’t kept pace” … A review of the available Audited Financial Statements of the City shows that in the 10-year period from 2012 through 2021 (the last year the City has provided an audited financial statement for) City Revenues for Governmental Services rose from $61.8 million to $92.0 million. That is a compound growth rate of just under 4.9% each year! At the same time the revenues for the Enterprise Funds that fund the City’s Utilities rose from $40.1 million to $65.7 million. That is a compound growth rate of over 5.6% each year! During the same period the inflation rate of costs reported by the Government had a compound growth rate of 2.26%. In what reality does a 4.9% growth rate not “keep pace” with a 2.26% growth rate. Fact checking organizations would also label that argument as “pants on fire!”
Bottom-lien, even though I agree with the article’s statement that voters should be disappointed with the City’s dismal record on economic development, the annual revenues of the City have clearly grown, but the horrible discipline on expenditures has squandered those additional revenues.
Matt – you misread what I said which was that I was little disappointed that the ballot argument only focused on the expenditure side rather than looking at the lack of revenue coming from business.
David
You can only ask for so much in a campaign statement. There’s a limit on the argument length. It’s also difficult to make complex connections in this document. It’s the role of the press to interview the ballot proponents and opponents and expand on their arguments. There needs to be a public dialogue facilitated by outlets like the Vanguard rather than expressing disappointment about one side or the other not putting forth a perfect argument. Time to go to work.
I also think its notable that Elaine and Alan signed on to the opposing statement. I doubt that either of them have been on this of a tax issue in the past. I also wouldn’t dismiss Jeff Miller simply as a “conservative”. He has been on the inside of the Fiscal & Budget Committee for a long time and his concerns were mirrored by several others on the commission. It would be naïve to expect the Yolo Taxpayers to not sign on to a statement such as this one.
In order to maintain the current level of services and expand the programs the public has indicated they want (homeless services, affordable housing programs) the city needs more revenues.
Revenues can come from economic development, increased sales or property taxes, or user fees/taxes. Economic development has been blocked. The methods of taxation available are limited in a general law city. The council has concluded that the sales tax increase is necessary because revenue options other than taxes are gone and other forms of taxation are less likely to pass.
Economic development has been discussed for more than 15 years now. If any of the business parks had been approved, they’d probably be generating revenues now. But all economic development options have been scuttled. The Davis market is anathema to commercial developers.
“…there is also the argument that the No side has made that the council is out of touch and irresponsible….”
And running unopposed, or being re-elected by whopping margins.
“the city has failed to solve the revenue side of the equation – and I don’t mean with more taxes. I mean with economic development, keeping the downtown strong and expanding the city’s retail base.”
The city has failed? How many more commissions, ad hoc committees, economic development directors, would you like?
Talking and planning doesn’t get anything built. See “anathema” above.
“Keeping the downtown strong?” Okay, Keith Echols has described the unpopulated downtown on a recent summer day. What does that tell us about the Davis downtown? That nearly all of the stores and especially eateries are geared toward students. The change over the last two decades downtown has been significant in terms of the numbers of businesses closed but especially in the change from retail to food businesses.
At this point, there is no changing that trajectory.
Davis is a college town with a bunch of downtown businesses aimed at students. Yes, you can build housing downtown. Guess who will happily occupy that new housing? Students. Yes, additional peripheral retail will probably be necessary if housing is approved along Mace. The existing shopping centers can provide for that, and probably will on their own. An additional shopping center could be added, or the constraints on the Second Street Crossing shopping options could be removed. Those were negotiated with the Downtown Davis Business Association to protect downtown retailers, and I’d bet most of those who participated in those negotiations are gone now.
But even if exceptions were made, constraints were removed, and land was rezoned for more retail, it would take quite a while for any project to move forward. The reputation of this town is set. See “anathema” above again.
There’s not a lot to debate. You can argue for reduced services or for another form of taxation, but that’s about it. If you want “better oversight” or reduced employee compensation, run for office. Throttling the revenues will not achieve those goals.
Don, Davis has abdicated its status as a University/College Town. A University Town is predominantly about growing intellectual capital. In the last 30 years Davis has seen its intellectual capital decrease, not increase. When I arrived here 26 years ago Davis had much more intellectual capital than it does now. Since 1998 it has lost more jobs that are centered around intellectual capital, and especially intellectual capital created at its neighbor UCD. In addition, the number of Davis residents whose job is all about the creation of intellectual capital ( (regardless of whether that job is within the City Limits) has plummeted. Davis is much more of “beds and breakfasts” town with its primary industries being rental housing and restaurants and coffee shops) than it is a University town. Davis is also become much more of a retirement town than a University town, with retirees living in Davis outnumbering people who work in intellectual capital jobs by at least a factor of 2 to 1.
The fact that the bulk of the restaurant and coffee shop customers are students does not change the fact that the economic activity has nothing directly to do with the University … it is a human services activity.
Our tax revenue challenges can clearly be linked to the lack of diversity in this town. The communities who continued to thrive during economic recessions are those who have a very diverse population of race, incomes and affordable homes to live in. If we continue to be such an economically homogenous community we’re going to continue to have these fiscal challenges. If we create a healthier economically diverse community we will see a healthier fiscal situation.