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The County’s Fleecing of Goleta Must End

The Revenue Neutrality Agreement Is Neither Just Nor Fair


“Goleta has the worst Revenue Neutrality Agreement (RNA) in the history of California,” according to Dave Mullinax of the California League of Cities. Revenue Neutrality Agreements are a Sacramento-designed mechanism to smooth revenues for counties when new cities incorporate. For most communities, this is a short-term transition period. But not in Goleta.

Under the terms of the RNA, the County of Santa Barbara (pop. 420,000) has taken from the City of Goleta (pop. 28,000) over $80,000,000 since the Goleta’s incorporation 11 years ago. That’s $80 million from the taxpayers of our small city. Goleta’s Revenue Neutrality Agreement permits the county to take 30 percent of all our sales tax and 50 percent of all property tax until the end of time.

The county has two arguments to justify this taking: Goleta agreed to the terms of the RNA, and the county needs the revenue. But, if one reads the history of the cityhood vote, one can see that the choice Goletans faced was to accept the onerous terms of the RNA or forgo, once again, the creation of a city in the Good Land. We opted for cityhood along with this flawed agreement.

The county’s other argument is that it needs the money. Of course it does. The county has a voracious appetite for money, spending $850,000,000 every year and wanting more. Goleta, with a budget of around $20 million, lives within its modest means. We are solvent because of the commitment by our past and current City Councils to spend our funds judiciously. With the onerous RNA, Goleta has an antiquated traffic grid, no permanent City Hall, no public spaces to gather, no parks and recreation department, and on and on. Under the terms of the current RNA, it is not able to. This has to change.

Every city in the county pays for the services it receives from the county. And Goleta pays these same fees, plus the extra $5 million for the RNA each year, for which Goleta receives no additional services. None. Nada. Nothing.

The tax revenue the county takes from the city every year prevents Goleta from becoming the city it can and should become. Unless the RNA is terminated, the great-grandchildren of Goleta’s current citizens, and the great-grandchildren of those great-grandchildren, will still be paying the county this extortion from Goleta taxpayers.

Is this just? Is this fair to the people of Goleta? Isn’t $80 million enough?

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