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Helene Scheider press conference on Feb. 7, 2012

Paul Wellman

Helene Scheider press conference on Feb. 7, 2012

Helene’s Gambit

Mayor Proposes Sales Tax Bump, Pension Reform

Wednesday, February 8, 2012
By Nick Welsh (Contact)

In a dramatic, solitary, and undeniably unconventional assertion of political initiative, Santa Barbara Mayor Helene Schneider unveiled an ambitious package of four initiatives she plans to qualify for the November ballot that she contends will go a long way toward putting City Hall on more stable economic footing.

At a solo press conference conducted in the downtown offices of videographer Brent Sumner, notably devoid of any trappings of office, Schneider outlined a package she said had something for everyone to both like and dislike. “As a matter of fairness, everyone should participate, and everyone must sacrifice,” she said. The centerpiece of her plan would increase Santa Barbara’s sales tax by half a cent. That, said Schneider, would increase city revenues by $10 million. Of that, half would go to the city’s general fund and the rest would go to the Santa Barbara Unified School District.

Schneider suggested the money could be used to restore library hours, boost restorative policing of the homeless, and maintain the city’s infrastructure, among other things. But because those revenues would go into the city’s general fund, they could be used for any purpose the council deemed fit. General purpose initiatives have the strategic advantage, under state law, of requiring only a simple majority to pass, rather than the two-thirds required for most initiatives. Schneider said she was moved to act after watching the State Legislature, caught in its perpetual fiscal crisis, repeatedly raid local governments’ revenues. Likewise, she noted, the Santa Barbara Unified School District has cut funding by $20 million in recent years in response to chronic state shortfalls. Her plan, she argued, would help insulate both City Hall and the local school district from the state’s budget violence and effectively contradict the “false choice” that pits “cities versus schools” in the battle for state dollars. “I refuse to endorse that way of thinking,” she said. “We are One Santa Barbara.”

The 50-50 split would have to be approved by voters in a separate initiative. Even so, its impact would only be advisory. Still, Schneider insisted, any elected official who sought to tamper with so clear an expression of voter intent would be committing “political suicide.” Another measure would increase the business license fee charged on downtown bar owners — anyone selling booze after 11 p.m. — by 0.25 percent. “For a $3 beer, that’s one penny extra,” Schneider said. That would generate approximately $250,000, she estimated, and could be used to offset the high cost of dispatching so many cops to lower State Street to keep the peace weekend nights.

Perhaps the most politically confrontational of her proposals would require all city employees to make the maximum contribution to their retirement pensions. Currently, city cops and firefighters pay roughly 3 percent of the “employee contributions” to their retirement, and City Hall makes up the other 6 percent. Under state law, the maximum city employee contribution is 9 percent, and under Schneider’s proposal, all employees would have to pay the full maximum out of their own pockets. (Non-public safety employees already do so.)

If enacted, this provision would save City Hall nearly $2.5 million a year. It would also cost a typical police officer about $8,000 to $9,000 a year. Schneider said she was moved to act by a “a perception of unfairness in our public employee retirement system.” And she linked the pension proposal to the sales tax increase, so that if one fails, they both fail. The booze tax can rise and fall on its own.

For Schneider, normally a careful and methodical liberal inclined to move in incremental steps, this was an unusually bold statement. She had no one at the podium with her, and no power endorsements to announce. Rather than ask her council colleagues to put the items on the ballot, Schneider said she will spearhead a campaign to collect 9,000 signatures by June. As to where the money would come from to pay the signature-gatherers, the mayor said, “Clearly I have some fundraising to do.”

Although the idea has been germinating for nine months, Schneider waited until Monday to begin telling city officials, her council colleagues, and the affected unions what she had in mind. Councilmember Grant House — normally an ally — praised Schneider for “stepping out there.” Councilmember Dale Francisco — often on the other side of Schnieder — gave her high marks for “cleverness.” But Daraka Larimore-Hall, head of the Democratic Central Committee, expressed serious reservations about Schneider’s decision to keep potential allies in the dark. “If you’re asking people for money and effort and support, it’s good to have their input at the outset,” he said. This help, he said, could prove especially crucial for an election in which there could be as many as three proposed tax increases on the statewide ballot.

The unions representing city police and firefighters felt especially blindsided by the announcement. “I’m more than a little disappointed,” said Tony Pighetti of the firefighters union. He noted that the city’s sales tax and bed tax revenues have increased dramatically and that property taxes are no longer dropping. “I’m just not sure where this is coming from,” he said. Given that City Hall has shed 80 positions in the past three years, and the budget has gone from $105 million to $95 million, union reps asked, are such measures really required?

Pighetti and Eric Beecher of the Police Officers Association both objected that Schneider’s proposal bypasses the collective bargaining process entirely. When City Hall hit hard times, Pighetti said, the firefighters agreed to make concessions worth millions of dollars even in the middle of a contract. “Every time they’ve asked, we’ve been there to help,” he said. “So why this and why now?”

In the coming week, Schneider will be meeting with representatives from the police and firefighter unions, both smarting from having endorsed three loosing candidates in the most recent City Council election.

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