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Santa Barbara City Council


Sales Tax Increase Appears Dead on Arrival

City’s Proposed Half-Cent Bump Probably Won’t Make November Ballot


Friday, March 15, 2013
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A half-cent sales tax increase that would have generated $9 million a year for the City of Santa Barbara may not technically qualify as “dead on arrival,” but it appears close. “It sure looks like it,” said Mayor Helene Schneider shortly after a special meeting of the City Council to discuss the possible tax bump.

For the council to place the matter before voters this November, five members of the council must vote to do so. By the end of this Wednesday’s special meeting, it appeared the plan only had four solid votes. Councilmember Dale Francisco announced he couldn’t support placing the measure on the ballot until the council had demonstrated sufficient fiscal restraint during “good times.” Councilmember Frank Hotchkiss — running for re-election this fall — had made it clear previously he would not support it. And Councilmember Randy Rowse expressed great skepticism about giving the council a blank check worth $9 million a year. Rowse did keep the possibility open, however, of letting voters decide pending the results of a city-sponsored survey on the matter.

Schneider, a strong supporter of the tax ballot idea, said it came as a surprise that the measure required a five-vote supermajority. Until last Wednesday’s meeting, she and the rest of the council had been under the impression a simple four-vote majority was sufficient.

Where councilmembers might disagree on the wisdom of a tax hike — especially in the wake of a recovery seen by many as fragile — there’s consensus that City Hall has a boatload of unfunded capital needs worth hundreds of millions of dollars. According to City Administrator Jim Armstrong, the value of these unfunded needs could be as high as $400 million and as low as $200 million. He stressed that City Hall could manage without the new tax revenues without making further cuts.

Sales taxes are on the rise as are bed taxes; property taxes, however, remain flat. Over the past six years, 90 positions have been cut from the City Hall payroll in response to chronic budget shortfalls. But without the new revenues, Armstrong stressed that big ticket items — like a new police station or a refurbished Cabrillo Bath House, long identified as high priority improvements — cannot be paid for. And without the new tax revenues, he added, hundreds of millions of dollars in road repairs and slurry sealing will be delayed or not done. The quality of streets will decline, and later efforts to bring them up to snuff will prove much costlier than if they been done sooner.

Adding to the pinch is the $45 million in revenues City Hall has had to make do without because the State Legislature — coupled with the California Supreme Court — abolished redevelopment agencies throughout California.

Propelling interest in the sales tax measure was the success other California cities have had passing them. Of all the sales tax increases proposed last year, 79 percent were approved by voters. Even Santa Maria — known for its conservative voters and even more conservative politicians — passed a sales tax increase last June. But even with such numbers, success was hardly preordained. Many on the left end of the political spectrum oppose sales tax increases because they have disproportionate impact on low income residents. Voters on the right side of the aisle tend to reject tax increases out of hand.

Schneider had floated a package of ballot initiatives last year in which she linked a tax increase to pension reform and to school funding. Although Schneider said she collected enough votes to qualify for the ballot, she withdrew the measure because of lack of political support from crucial allies.

Comments

Independent Discussion Guidelines

Sounded as though the majority is supportive of a telephone poll. But how can such a poll be believable? $25,000 for about 300 responses --- and will the questions be made public? An important question would be, would the called support outsourcing some of city services (as was discussed by public speaker Smith.) Hard to imagine how 300 responses would be an accurate prediction of anything in terms of how the city would vote.

3rd paragraph from the end: should be "legislature", not "legislator", although our legislator, Das Williams, was strongly in favor of cutting off the RDA funds from Santa Barbara (and other cities.) As for Schneider's initiatives, she has said frequently, without sharing the signatures, that she got enough names to qualify for the ballot, but until those names/addresses were verified by the city, there's no way of knowing whether she had enough or not. (Iya Falcone can attest to that....)

at_large (anonymous profile)
March 15, 2013 at 10:21 p.m. (Suggest removal)

Tax the tourists, they get most of the benefits!

Ken_Volok (anonymous profile)
March 15, 2013 at 10:46 p.m. (Suggest removal)

$25,000 for 300 responses to a simple telephone survey tells you all you need to know about why our fair City is going broke, and whether you need to vote for a tax increase. The only tax increase I'll agree to is one that would pay for sending our elected officials to a financial literacy boot camp with Suze Orman.

blackpoodles (anonymous profile)
March 16, 2013 at 12:05 a.m. (Suggest removal)

Threaten to cut teachers, firemen or police. Then the tax increase might have a better chance.

Botany (anonymous profile)
March 16, 2013 at 5:41 a.m. (Suggest removal)

Why is that government (staffs and our elected representatives) look to fix budget problems by increasing taxes?

We already are highly taxed but our government officials haven't done a very good job of managing the funds that they already take from us. Instead of repairing the streets they give the employees higher salaries. Instead of repairing the Cabrillo Bath House (presuming that it needs to be refurbished and not just maintained) they give the employees sweetheart retirement benefits. Etc., etc.

And the RDA went away partly because SB and other cities were abusing that program. RDA funds were used as just another source of funding for projects that were not redevelopment of blighted areas, as specified by the RDA law, but should have been general fund obligations.

Accountability has been lacking. But that is easy when 80% or more of the public are apathetic.

art (anonymous profile)
March 16, 2013 at 9:03 a.m. (Suggest removal)

It is disappointing to watch the liberal politicians continue to push for sales tax increases (they just lost such a battle in Los Angeles) when sales taxes are the most regressive and unfair tax. The mayor especially knows this and should explain why she pushes this burden on those with little discretionary income instead of a tax or assessment of some sort on the main creator of the need for more services and the biggest slacker --the adult fun zone on lower State.

RHS (anonymous profile)
March 16, 2013 at 10:05 a.m. (Suggest removal)

The council should be spending their time creating a sustainable pension plan, not looking for more 'revenue'.

loneranger (anonymous profile)
March 17, 2013 at 8:03 a.m. (Suggest removal)

With Frank Hotchkiss so unwilling to raise the sales tax now, we all look forward during the next few months of budget season to his fine wisdom and courage to argue specifically and convincingly which projects and activities the city no longer should pursue. Saying no to revenue is cheap talk, but saying yes to specific cuts instead is the real leadership void that politicians like Hotchkiss and Rowse never can muster.

In this article Rowse exhibits his own brand of courage and leadership by claiming that that as a council member he is unfit to decide on how to spend or save any increase in city revenue.

John_Adams (anonymous profile)
March 17, 2013 at 3:10 p.m. (Suggest removal)

Hotchkiss could be fracked for gas.

Ken_Volok (anonymous profile)
March 17, 2013 at 4:20 p.m. (Suggest removal)

There are easy cuts to be made. Start by ensuring that basic government services (public safety, police, fire, street repair) are adequately funded, then go after the planners and admin staff that don't ever have to deal with the public effect of their work, then the special interest and pet projects of various staff and Council. A 50% cut in traffic planning staff would return us to the level of 10 years ago, before bulbouts, microroundabouts, elimination of driving lanes, etc.

Then eliminate the big spenders from the Council at every opportunity. Problem is, with such a high proportion of government employees of all types in SB, it's easy to get them to vote for each others' interests.

JohnLocke (anonymous profile)
March 18, 2013 at 12:18 p.m. (Suggest removal)

And how could it be a "surprise" that 5 votes were needed? Does our Mayor know anything about how city government works?

JohnLocke (anonymous profile)
March 18, 2013 at 12:20 p.m. (Suggest removal)

Paul Casey said last month that the city had $30-40 million reserved for projects. Street maintenance, not downtown tourist-oriented projects, were one of the intended purposes of RDA funds. Francisco should be in a better position to demonstrate fiscal restraint now than in the past, when his support for hiring unneeded cops didn't buy him their endorsement, and SBPD became instantaneously unethical.

14noscams (anonymous profile)
March 18, 2013 at 9:52 p.m. (Suggest removal)

But SBPD IS unethical, and not instantaneously. Goes back a ways...

JohnLocke (anonymous profile)
March 18, 2013 at 9:56 p.m. (Suggest removal)

I agree, chop tourist oriented expenses FIRST before all others.

Ken_Volok (anonymous profile)
March 18, 2013 at 10:11 p.m. (Suggest removal)

Didn't I just read that SB gets over a $billion in revenue from tourists?

JohnLocke (anonymous profile)
March 19, 2013 at 8:31 a.m. (Suggest removal)

Remember, the Dem's have been telling us that there is not a deficit problem but instead a revenue problem, so stop talking about having government live within it's means and get these taxes raised now. Even funnier, is that Dem's are the ones proposing the most regressive and oppressive taxes on the poor; increased sales tax. If only the Repubs had pushed for this the Progressives could have demonized the entire concept...

italiansurg (anonymous profile)
March 20, 2013 at 5:59 a.m. (Suggest removal)

The biggest PR problem for the Dems is that now that they have the governorship and super majorities, they actually have to take ownership of the problems they create.

Botany (anonymous profile)
March 20, 2013 at 6:15 a.m. (Suggest removal)

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