Revenues for Revenues’ Sake
Subject to Whims of the City Council
Mayor Helene Schneider’s multi-pronged initiative effort is being proposed not in her role as mayor, but independently as a private citizen, and therefore without input from city officials. She attempts to address problems that are at the forefront of many discussions by Santa Barbara residents, and issues that we on Council get letters and phone calls about daily.
Under California law, every new tax must be approved by a vote of the people. Taxes are classified as “general,” i.e. the revenue can be used for any governmental purpose; or “special,” meaning the revenue is dedicated to a specific governmental purpose. The mayor has chosen a general tax with no specific spending targets or limits because the threshold for approval set by state law for this type of proposal is a simple majority versus a two-thirds requirement for special taxes.
The term “Pension Reform” is used in the proposal, but is misleading. The proposal merely revisits a time when the public safety unions agreed to the current structure as a way to cooperate with city budget issues. Going back to full employee PERS (Public Employee Retirement System) contributions will likely mean a shift back to the city of up-front salary expenses, wiping out whatever savings are touted. Furthermore, these negotiations are usually done in bargaining sessions, in good faith, and not at the ballot box. Contrary to popular belief, our bargaining units gave concessions at times when the city needed them to.
The “Entertainment District Tax” is a new business license fee affecting a number of businesses in a zone that goes from Sola Street to Cabrillo Blvd., and Santa Barbara Street to Chapala Street. Because the city is not allowed to directly tax alcohol sales, the new fee applies to businesses which serve alcohol and are open past 11 p.m more than six nights per year to “new” customers. While most people might think this targets only the clubs in a few blocks of lower State Street, it actually includes restaurants up to Sola, and on the beach, and includes 100% of the revenue of any business serving alcohol at any time, including hotels and grocery stores. This tax would be unfairly levied on businesses that have nothing to do with needed added police service. In fact, the “extra expense for police service” is not quantified by a dollar amount in the proposal. As I understand it, the usual weekend patrol force is standing by on a few blocks on State Street near the clubs during closing time. These officers are otherwise ready to deploy to anywhere in the city for service calls.
The proposed initiative mentions that these new taxes would help to fund enhanced safety, libraries, parks, etc. One part of the proposal involves giving the Santa Barbara School District half of the proceeds. While our schools are worthy recipients of our tax dollars, they have two parcel taxes on the June ballot already, and the district includes entities located outside of the city limits.
Given that previous councils have spent record high revenues and reserves into deficit, why would the voters elect to re-stoke the spending fire with no certainty of results? In addition, this proposed tax hike has no sunset like the school parcel tax and can only be repealed or amended by another election.
The Independent’s Nick Welsh published names of the donorsfor this campaign, which is composed in large part of those involved with subsidized housing and homeless services, so my guess is that those folks are counting on some of the revenue going in that direction.
The issues in these proposals are, as the mayor said, things we hear about in City Hall from citizens every day. While I do respect the effort and initiative the mayor has put forth in these ballot measures, I must voice my disagreement with any proposal set forth to raise revenues for revenues’ sake, without any template for targets and limits on spending. A half-percent sales tax may not be unreasonable, given the types of defined goals that voters normally support, but these proposals are 100% discretionary and subject to the whims of Council. In addition, our revenues have shown improvement on their own; in fact better than we cautiously anticipated. So for now, let’s choose to grow and control our revenues and expenditures together, and have you, the voters, select specific priorities in the future if that is, in fact, your desire.
