Wednesday, September 29, 2010

City Council's Tax Appetite

Pacifica has lost its way. City Council just doesn't get it. More taxes, however prettied up and marketed, are not the answer. Tax Measure R on the November 2 ballot is another in a long line of misguided tax schemes and actually leads the way for another $6 million in new taxes within 14 months.

California unemployment is over 12%. Property values have fallen. Home sales have dropped. People are struggling to make ends meet. Personal income is flat. People are rightfully very anxious about the future. A recession is not the time to pick the public's pocket.

Here is a critical part of the official ballot statement for Tax Measure R signed by the entire City Council in August 2010:
"Pacifica continues
to spend
more than it receives"

Well, City Council wasn't kidding when they admit to spending more than they receive. It's been going on for years, and certainly made worse by the recession.   Just exactly what is the point they are trying to get across with a statement like that? Don't forget, two of the incumbents think they have done such a good job of spending more than they get that they are asking us to re-elect them!

These same 2 have been part of the process of approving salaries and benefits that Council isn't able to fund. Not a ringing endorsement of fiscal responsibility!  Salary and benefits are a huge part of our budget, as they are in other municipalities. A large difference is the ability to pay those costs. We can't afford what has been negotiated by our council over the past 12 years. 

For the past ten years, Council has been piling up the debt. The total city indebtedness is north of $125,000,000. That's $6,250 per voter. 
Employee pension debt alone from years prior to 2009 is $32 million, being paid by the taxpayers. That isn't taking into account the ongoing pension debt piling up today again. 

The City Council advertises their economic plan. Council figures this plan will generate $6 million over five years. Take a moment to look at this plan found here:.

It's all of three pages. It contains no due dates for any objective. No revenue expectations are attached to any part of the plan. The committee that produced this holds monthly meetings. No meeting minutes are available to gauge progress. No list of committee members is on the city website, and the parameters or financial background to participate in this process are unknown.

In short, our supposed roadmap out of this Council generated mess is a casual vague plan lacking due dates and revenue targets. The plan is so lacking in detail it would get you flunked out of your high school term paper class. It holds the council to no accountability standards. Give us your money and trust us says Council. You think that's right?

 Unfortunately, City Council has taken us for this ride before. In 2004, Council convinced the voters to approve a five year fire assessment tax to support Pacifica fire services. Many people expected an economic plan to be developed while the five year tax was in place to fully support fire services. Wrong. Council immediately laid off three firefighters. No economic plan was developed during the five year tax. Council broke faith. 

Over the horizon, in 2011, is the first leg of $6 million in new taxes---a $4 million public safety property tax assessment.  This tax is rigged by City Council to get around Prop 13 and will require only a majority vote, not 2/3. Adding insult to injury, only property owners will be allowed to vote.  If you are a voter and do not own property, you cannot vote. If you are a renter, you cannot vote. If two spouses are on the title of the house, only one gets to vote. If you own multiple properties in town, you get multiple votes, one for each property. If you are an out-of-town landlord or are an out-of-town corporation (Bank of America anyone?) and own property in Pacifica, you get to vote.

In conclusion, vote No on Tax Measure R in November. The Pacifica Chamber of Commerce authored the argument against this tax. Not a single hotel manager thinks this tax helps Pacifica hotels in a very tough economy. Even San Francisco is rejected new taxes and fees, demolishing the Pacifica Council's argument: well everyone else is raising taxes.  Measure R just whets the appetite of City council for more taxes next year, taxes that disproportionally keeps renters, minorities, younger people without houses from voting at all and allows out-of-town corporations to vote. The economic plan the City touts is of no value.  Council broke faith by laying off firefighters in 2004 after the five year tax was approved.
We deserve a better, leaner city budget that addresses the tough issues Council has ignored for years.

Jim Wagner, Mark Stechbart


Heather Tanner said...

This is primarily the reason I am against the hotel tax. I know that we need to get revenue in and it is becoming dire. The reality of the situation is we might not be able to avoid raising taxes in the short term to solve this problem.

But the proposed hotel tax is flawed, in my opinion. The hotel tax is based on the reasoning that the hotels will continue to be pulling in similar revenues from which to collect the taxes. The reality is the hotels are pulling in some of the revenue they are because they are able to keep their prices low enough to draw visitors from SFO and SF area hotels. We raise the tax, they will ultimately be forced to raise their prices or add other costs to the hotel stays of their guests. Without anything else to draw visitors, the hotel tax could be a huge bust - causing lost business and a decrease in tax revenue. Wrong direction!

We have other resources we can use to create revenue. Parking fees at our beaches could have a minimal impact on our citizens and, yet, increase revenue. We could have furlough days like other government entities. Yes, the city council could also take a pay cut. We could ask employees to job share or reduce hours by 10% to cut salary expenditures.

My point is, there is an awful lot of creativity we could employ to help the budget get to where it needs to be. We don't have to unfairly burden one industry, especially when the plan to tax is not foolproof.

Anonymous said...

No one ever considers the hotel tax before booking a room.

Steve Sinai said...

I consider the total cost, which includes the hotel tax.

When I start seeing the city doing things FOR local businesses, instead of only doing things TO local businesses, then I'll start voting for these kinds of taxes.

Lance said...

Hotel tax,$160,000 per year.
Vreeland's misguided "city hall by the sea" fiasco, $275,000.
Hotel tax, $160,000 per year. Vreeland's bio-diesel boondogle, $170,000. Three years of Hotel tax to replace the money wasted by just one ego-driven councilman. Remember that when you go to vote.

Anonymous said...

"No one ever considers the hotel tax before booking a room."
By all means, assume that people are stupid.
It'll keep you surprised, at least.

And then there are the wannabe council candidates ready to embrace this anti-business tax and become part of the problem.
We don't need more fiscal ignorance.

todd bray said...

Steve do you own or work for a local business?

Anonymous said...

Heather, please don't sound so clueless. Read Prop 21 - if it passes we never get to charge for parking.

Furloughs cost the state of California how much? 27 lawsuits - duh Estimates show the furloughs cost the state a billion dollars instead of any savings at all.

Contrary to everyones wishes there are no quick fixes.
Most of Pacifica's budget are salaries. Pacifica has 8 or 9 unions. Do you think they will support cuts?

El KNow it all but knows Nothing Todd Bray said...

Todd, are you a local business owner?

Steve Sinai said...

Todd, I have my own one-person contract programming business. I've done that since 1989, and none of my clients has ever been in Pacifica.

Anonymous said...

Yeah, Prop 21, that's the $18 vehicle license fee that will be on your vehicle's registration forever if it passes.
Allegedly to fund state parks, it may only allow the thieves in the legislature to shift funding away from parks that was already budgeted for them.
It's another example of our disfunctional budgetary process, and a regressive tax on many people who can ill afford it.
You comfortable professionals out there reading this blog and wondering what I'm talking about should wake up and become aware of all the struggling families and individuals who are facing financial ruin through job losses, illness, etc. Your bubble could burst tomorrow.

Anonymous said...

Wow big news - this city has spent more than it takes in since the Barbara Carr days. There just has been no increase in income. Nothing. Every development gets voted down. And, we have already cut and combined positions until there are not enough people to do the work.

Say what you will but at least Steve Rhodes has a plan. We have never had that before. And, it still includes cutting $8 million more from employees or have you forgotten.

Anonymous said...

Guess you all want to add some of our city employees to the job losses.

Kathy Meeh said...

Anon 7:34am, from my view this city should not be in the position of having to charge for parking at our beach, or increasing the TOT tax either. And similar to Heather Tanner and others I will vote against the TOT tax.

Let the city sell-off some of their properties and green light development-- alternatively city council could have "bake sales". Adding $18 to the vehicle registration tax is okay with me.

Similar to Steve Sinai, I agree until we get a change of city council that will support a sustainable city, I'm not voting for any new taxes. This year the city has been able to add an embedded tax to our electric utilities bill, and for 6 years city fees keep increasing. Anyone that can do the math, knows that is not good enough (probably doesn't cover inflation), and continuing to downsize city personnel and services doesn't work either.

City council candidates running, who are NOT likely to improve this city? Vreeland, Digre, Davidson, Leon.

City council candidates running, who will likely IMPROVE this city? Arietta, Vellone, Stone, Clifford, Tanner. You have 3 votes, vote with care and wisdom.

Anonymous said...

"Every development gets voted down."

Name them.

Inquiring Mind said...

Kathy Meeh said, "I'm not voting for any new taxes."

Kathy, can you explain why you have been justifying the hotel tax over the last several days?

Vreelander said...

I am on the council and you people are not

So thus, I poop on you all

Kathy Meeh said...

Anon 11:02am, try this old version of blocked development: Mori Point. Our citizens voted to develop Mori Point property as a hotel/convention center, but it was blocked in the Planning Commission.

There following, Mori Point (geographical center of this city) was 100% "saved by members of the current city council", and has become threatened SF garter snake paradise (equipped with dinner supplied by equally threatened Red Legged frogs). So rather than develop a city economy, members of this city council 4 chose to support removal of all 110 acres of Mori Point land from this city (now GGNRA property).

Removal of economically productive acres from a geographical city center in favor of one threatened species eating another? Sounds like 4 candidates of merit for the Darwin Awards previously suggested an Anon.

TOT tax. "Inquiring mind" 11:02am, I have been justifying those who have an alternative view of supporting the 2% hotel tax increase-- not the tax increase itself. Clearly the city is faced with a series of "failure to thrive" no good choices, compounded by city council majority (4), eight years of poor city management. What to do?

My personal position was made clear on earlier posts you may have understandably missed. I did NOT support Measure D last year, and I do NOT support increasing the TOT tax. In fact, I suggested reducing the current TOT tax to 8% and advertise the same. A TOT tax at 8% in a naturally beautiful but underdeveloped city might attract business (compare to developed cities at 12%, 14%, or 17% San Francisco). Its not just revenue from TOT tax that is significant, but also 1) keeping our current business alive, with the trade-off 2) protecting or increasing city sales tax revenue.

Heather Tanner said...

Anonymous - I will try not to sound so clueless as you put it. I believe you might have missed the point of my post.

My point is this - its easy to say let's tax because we need money. Harder is to look for alternatives to the tax. The TOT tax, as I said earlier, is flawed. Its based on the principle that the business revenue will remain the same - and yet we are taking away a large reason the hotel owners are competitive. We offer nothing in return. So, we are asking hotel owners unfairly to carry the burden of our collective fiscal failure. I do not believe that is fair or wise.

If we're going to "try" something to fix our financial problems - why not "try" something that supports or creates business? Why not lower the tax or generate revenue in other places?

I am certainly aware of Prop 21 - which, as it stands now, is NOT a law. It has no binding affect now. If it does pass, obviously, we'd have to look for other revenue streams.

The point all along was I am not afraid to look for other solutions. If it comes down to it and we have to propose a tax, then we should. But the tax needs to be fair and balanced and necessary given all of the circumstances. I don't think the case has been made that the TOT tax is fair and balanced here. Necessary, maybe.

Thank you for your support, Kathy.