Schneider Postpones Tax Initiative Package One Year

The first time Santa Barbara Mayor Helene Schneider publicly unveiled her ambitious package of four ballot initiatives — back in February — she was, very conspicuously, all alone in front of the microphones. But when she unveiled her revised plans this Tuesday — at the new Casa Blanca restaurant — about 15 people, even more conspicuously, stood right behind her. Backing the mayor’s initiatives, dubbed Invest in Santa Barbara, were two Santa Barbara school board members, two City College trustees, and at least one representative from the Hope School District, all keenly interested in the $5 million a year Schneider claims her proposal to increase local sales taxes by half a cent would generate for public education. (The sales tax hike would generate an estimated $10 million a year; half would go to City Hall, the rest to public education.)

Also on hand were a number of bar owners, whose objections to Schneider’s initial plans — to increase the business tax charged on sales of alcohol in the city’s entertainment district — gave Schneider sufficient pause to rewrite that provision. And looming very large — albeit quietly — were representatives of Santa Barbara’s politically potent guns-and-hoses coalition, the unions representing city cops and firefighters. Where the public safety unions had initially balked, though never officially, at Schneider’s ballot initiative requiring their members pay the maximum amount into their retirement legally allowed — 9 percent — they are now supportive.

In the past five years, City Hall has had to cut $20 million from its budget. With the state budget in perpetual meltdown mode, cities have found themselves increasingly at odds with the State Legislature and school districts over limited revenues, and services suffer. By passing this tax increase, Schneider said, Santa Barbara voters can achieve a much needed element of local control and accountability.

Much has changed since February, when Schneider sprang her proposal on Santa Barbara’s political world with such a dramatic dearth of advance warning that it generated considerable backlash. But perhaps the biggest change in Schneider’s plan is its timing. Rather than appear on the ballot this November — as first proposed — the mayor is now pushing to qualify it for the November 2013 ballot. That happens to be when she’s scheduled to run for reelection; more critically, it keeps her proposal off this November’s ballot for which two statewide tax increases — one proposed by Gov. Jerry Brown and the other by wealthy activist Molly Munger — have qualified. Democrats statewide have declared passage of Brown’s sales tax increase an urgent necessity and many party activists complained Schneider’s initial proposal threatened to crowd an already dangerously overcrowded ballot. By backing off, she can avoid such criticism.

The other big change came last Tuesday night when two parcel taxes that would have generated $4 million a year for the Santa Barbara school district failed by the narrowest margins imaginable. Although the district has decided to try again in November school board members Susan Christol Deacon and Kate Parker made it clear, by showing up for the mayor, they’re interested in exploring all revenue options, no matter how uncertain. (The initiative to split the proceeds with local schools is strictly advisory and could legally be revoked by any subsequent city council willing to risk the consequences on any given Tuesday.) And joining the money hunt since last February is Santa Barbara City College, so cash strapped it had to turn away 1,500 students this past year, and the Hope School District.

And last week, voters in San Diego and San Jose voted to pass stringent pension reform measures regulating how much city workers have to pay into their personal retirement. And Wisconsin Gov. Scott Walker — who profoundly offended the labor movement by passing a law banning collective bargaining for public employees — survived a union-led recall campaign. Reading these election results, the two unions most affected — police and fire — have opted to switch rather than fight. The firefighter’s Tony Pighetti remains upset that Schneider is hoping to achieve at the ballot box what he thinks should be pursued at the bargaining table. But by putting off the election for a year, he reckoned, the unions would have time to negotiate an acceptable deal for paying their maximum retirement. Should voters decide to lock that in afterward by voting for Schneider’s initiative, Pighetti said, he’d support it.

Whether this is enough to mollify critics of Schneider’s initiative package within the Democrat Party has yet to be seen. Some hardcore union supporters might not be swayed; within party circles they can be influential. One group that Schneider did appease, however, was downtown bar owners, concerned they were being singled out in Schneider’s first draft and, in fact, they were. After meeting with Bob Stout — owner of the Wildcat Lounge — as well as other owners, Schneider is proposing new language that would affect any business that sells alcohol anywhere in the city. Right now, City Hall levies a tax on all businesses based on gross sales but, strangely, exempts all alcohol sales from these calculations. Schneider’s rewrite would delete this exemption. “I’ve said all along that if people have a better idea, we should sit down and talk,” she said. The bar owners, Schneider said, did so, and from those discussions emerged “a better alternative.”