A BID Is a Tax

The Business Improvement District (BID) proposal, which Matt Kettmann covered in a story on September 16, is being pushed by a few wineries in Santa Barbara. The story fails to offer alternative information that voters and consumers should have.

As originally proposed, about a quarter of the revenue generated by the “tax” is to be used for advocacy with elected and other government officials. That alone was a frightening concept. When people decide to pay for wine tastings — or to purchase wine at all — they do not decide to pay for advocacy of ideas that they do not know and of which they may not approve.  Now, in the promised fifth iteration of the proposal, the proponents are saying that they will not use the money for marketing to the wholesale trade or advocacy.  But that language is not yet written and needs to be reviewed. Let’s verify this before we accept that it is included.

Second, I believe it has been proven that the proposed mixture of government and free market agencies inherent in this proposal inevitably leads to questionable public policy. We remember bad effects from urban renewal and downtown improvement districts, for example. The demise of a vibrant downtown State Street is attributed by many to the “revival” that forced marginal businesses out of the area and allowed it to be taken over by fund managers and large real estate owners.

We also know that assessments taken of producers and consumers and used for marketing of agricultural products has resulted in laws limiting competition. For example, the price of raisins to consumers was held hostage for decades to a similar agricultural board, California dairy products were artificially restrained, table grape production was limited and so forth. These groups invariably represent the profit and marketing interests of the growers over those of the public in general.

Finally, this is a tax, pure and simple. Taxes should be voted on by the people being asked to pay them. Instead it is noted by advocates of the proposal that as the “fee” will be paid by nonresidents, we really need not concern ourselves with the equity. After all, they are not going to even notice it.

This is pretty blatant hypocrisy. If people are being asked to pay a tax, such as the transient-occupancy tax in hotels, we require a public vote to proceed. This transient consumption fee should be seen in the same light.


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