Tax Hike Dead in the Cradle

Council Votes Against Poll to Test Temperature of City Voters

Thursday, April 11, 2013
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Although a clear majority of the Santa Barbara City Council believes new sources of revenue are urgently needed to meet hundreds of millions of dollars in deferred capital needs, the council voted 6-1 against hiring a polling firm to “take the temperature of city voters” regarding a possible sales tax increase that might have gone on the November ballot. Mayor Helene Schneider ​— ​who had previously expressed the keenest interest in such an increase ​— ​argued that a city-sponsored survey made no sense if a solid majority of the council did not support the need for new revenues. At least three of the seven councilmembers ​— ​Frank Hotchkiss, Dale Francisco, and Randy Rowse ​— ​have expressed intense skepticism to such a tax hike.

The discussion over the proposed $30,000 polling contract grew heated at times. Councilmember Grant House publicly challenged Hotchkiss to reconcile his stated opposition to any tax increase with his demand that City Hall hire more cops. “My question is, which programs do you want to cut?” House asked. Hotchkiss said he had homework to do before he could answer that, but he vowed to do it. Schneider’s turnaround on the issue was most dramatic. Not only was she most vocal in the need for new revenues, but she had launched an independent ballot campaign last year to increase the sales tax, split the proceeds with the public schools, and impose some modicum of “pension reform.” Schneider is up for reelection this November, and the burden of waging the pro–tax increase campaign would likely fall to her. With a split council, the campaign challenges would be significant.

While City Hall can sustain yearly operations without additional funds, no services cut during the recession can be restored, and pay increases for employee unions that have long gone without will become more politically painful. The additional $10 million a year that a half-cent sales tax would have generated would have helped cover some of the city’s unmet road repair costs, among other things. Bendy White, ever alarmed by City Hall’s colossal scale of deferred maintenance, struck an anguished tone in voting against the poll. “Right now, we’re taking from the future,” he lamented. “We owe the future a better package than a bag full of loans and run-down buildings.” Only Councilmember Cathy Murillo voted in favor of paying for the survey, passionately arguing that the results might reveal strong popular support for such a tax increase.


Independent Discussion Guidelines

I am really SHOCKED that Hotchkiss has been blustering to spend more money on cops and whatever else panders to his right-wing base, but at the same time he could not back up that bluster with any way to pay for it.

Good Republicans NEVER do that.

John_Adams (anonymous profile)
April 11, 2013 at 8:52 a.m. (Suggest removal)

Ironically Hotchkiss is the right-wing's best chance at the Mayorship. Francisco has way too much baggage.

Ken_Volok (anonymous profile)
April 11, 2013 at 9:44 a.m. (Suggest removal)

Put it on the ballot, let the voters decide......period.

BeachFan (anonymous profile)
April 11, 2013 at 10:04 a.m. (Suggest removal)

It is irresponsible reporting to refer to a tax hike as "raising revenue". Taxes are the confiscation of other people's work and productivity. Governments do not earn revenue but instead take it with the presumption of force (arrest, prison, etc) to compel earners to give up a portion of the value of their labor or capital risk-taking.

A civil society requires and benefits from government services that are in balance with government confiscation of wealth. What is missing from this article and the city council meeting is why can't we get 10% more efficiency out of our existing government workers and processes? Answer: there is no incentive to do this and no penalty for changing how things are done. Throw in union backed council members and you can see why this is not discussed.

Nick isn't helping and doesn't care to.

willy88 (anonymous profile)
April 11, 2013 at 12:15 p.m. (Suggest removal)

Ohhhhhhhhhhhhh.... ouch: that is quite a tumble straight out of the gates, "Willy88."

Yes it is correctly called "tax revenue"; legally, semantically, and colloquially.

It's the Internal REVENUE Service, fergawdsakes.

binky (anonymous profile)
April 11, 2013 at 1:24 p.m. (Suggest removal)

Some good points Willy. But it's the cops that have the biggest pension liabilities for the City. Their ability to pad their salaries with outrageous overtime hours, and have their ending pension based on this inflated salary is what is killing the system.

What's left? City streets and infracstructure deteriorate and you start closing pools, parks, libraries. Which is why you let the votes decide. If they support, ok, if not, well, cuts eventually will need to be done to offset the long term pension liabilities. Of course, long term thinking is severly lacking in this County.

BeachFan (anonymous profile)
April 11, 2013 at 1:28 p.m. (Suggest removal)

Not just in this county, BeachFan - it may be a national disease.

JohnLocke (anonymous profile)
April 11, 2013 at 5:13 p.m. (Suggest removal)

Infrastructure should have a firm budget as a percentage of revenue, something like 30% a year.
The city has allowed salaries and pensions to eat up all the revenue and now they want more.
Even IF the city got a tax increase approved, in short order it would end up 100% to salaries and pensions.

The salaries and pension cost are way out of line with private enterprise and in general there is way too many city employees. Go back 50 years and look at the increase in city wages and pensions compared to the average city citizen wage. Also look at the head count to population ratio. I think the results would show the real issue. City head count and cost are out of control!

loneranger (anonymous profile)
April 11, 2013 at 8:35 p.m. (Suggest removal)

Are you guessing, loneranger, or do you have actual data to support your beliefs? If the latter, post a link.

SezMe (anonymous profile)
April 12, 2013 at 12:38 a.m. (Suggest removal)

"It is irresponsible reporting to refer to a tax hike as "raising revenue".
-- will88
Somebody has been reading Atlas Shrugged and forgot it is a make believe novel.

SezMe (anonymous profile)
April 12, 2013 at 12:39 a.m. (Suggest removal)

The sales tax sounds like another one off deal designed to allow the City to muddle through its finacial mess.

Rather, the City needs to develop a long term financial plan (5 years) to balance the budget based on Generally Accepted Accounting Prinicples, and over the next ten to fifteen years, repair our streets (and the rest of our infrastructure) and fully fund the pensions and other retirement benefits.

We may even need a charter amendment.

jack (anonymous profile)
April 12, 2013 at 5:29 a.m. (Suggest removal)

yea, agreed that "long term thinking is sever[e]ly lacking " and yep, it's not just a local political problem. Yet this lack of longterm thinking (maybe Lawrence Kahnemann would call it lack of "slow thinking") likely reflects actual DEEP divisions among "the people". We can't even agree on basic terms like left, right, center, libertarian, and social democracy.
Amplifying this lack of any consensus is the deteriorating public school system -- and I mean reaching back into the 1980s. And of course it's not just about the lack of funding, OK, OK. That is an aspect of it, though. But lack of leadership and accepted overall goals (long term thinking) is part of it. I've been looking to Finland.

DrDan (anonymous profile)
April 12, 2013 at 8:23 a.m. (Suggest removal)

Aside from the discussion about the desirability of the tax we need to pay attention to the significance the decision which was to NOT hire an "expert" to advise our elected officials as to how to act. I am proud and sort of stunned that the council denied this request of staff and put the burden where it belongs--on their own shoulders. This is why we elected them.

RHS (anonymous profile)
April 12, 2013 at 10:12 a.m. (Suggest removal)

Lost in all this is the fact that the sales tax is the most regressive, disproportionately falling upon the people with the least discretionary income and accumulated wealth. Santa Barbara is a very wealthy place--can't we do better than raising the sales tax?

And as for "willy88"'s "... why can't we get 10% more efficiency out of our existing government workers and processes? Answer: there is no incentive to do this and no penalty for changing how things are done": government workers are doing more with less, and have been doing so since at least the late '70s, just like all workers. It's the standards of productivity that keep being raised higher and higher, to the point where highly educated and trained staff are doing their own erstwhile clerical work through automated systems for written products, record-keeping, mailing, and even technical drafting. Not to mention '88's non sequitur, "no penalty for changing how things are done." I guarantee, there are severe penalties for changing how things are done, unless you get authorization from several layers of management, and it'd better be in writing or else you'll be hung out for the buzzards. Been there, done that, got hung out more than once and then once too often.

GregMohr (anonymous profile)
April 13, 2013 at 11:56 a.m. (Suggest removal)

I've maintain we should have a special tourist sales tax, regional residents show ID and don't have to pay the tax.

Ken_Volok (anonymous profile)
April 13, 2013 at 1:57 p.m. (Suggest removal)

Ken, nice try but it wouldn't pass the equal protection clause. The best we can do is my favorite bumper sticker: "Welcome to Santa Barbara! Spend freely, leave your kids here, and go home."

GregMohr (anonymous profile)
April 13, 2013 at 4:54 p.m. (Suggest removal)

In Truckee Ca residents get cheaper use of the winter ice rink and the recreation department facilities. I've long wondered why we don't get a break on beach parking for example; that is, since they started charging at East Beach anyway...
Tourists are already taxed out the wazoo.
We're never going to start changing the comical and unsustainable public pensions WHICH ARE bankrupting us until we end of as insolvent as San Jose, Stockton, and Vallejo.

italiansurg (anonymous profile)
April 14, 2013 at 7:40 a.m. (Suggest removal)

kudos to City Council for killing this AND for dropping the bad idea of instituting a "sales tax" at all. It's regressive [see GregMohr 4/13 post above], and doesn't achieve the needed revenue from those who have the most to give.
A chicken in every pot!

DrDan (anonymous profile)
April 14, 2013 at 8:31 a.m. (Suggest removal)

This big issue is that they city's salaries and benefits have grown way faster than inflation, going from consuming 62% of the city's revenue in 2000 to 80% last year.
There needs to be a reasonable cap for salaries and benefits so there is money for roads and infrastructure.
The general fund is approx $100M a year and we have $200-400M of infrastiurecture backlog, I would think it would be reasonable to budget 30% of th general fund for roads and infrastructure, this would probably require salaries and benefit expenses to be reduced to 50% (certainly no more than 62%) which also seems reasonable.

loneranger (anonymous profile)
April 14, 2013 at 3:47 p.m. (Suggest removal)

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