Goleta Punts Sales Tax Talks to July

Goleta’s council meeting late Tuesday night unspooled like an episode from Clash of the Titans as arguments collided on the effect of adding one percent to the city’s sales tax in dire economic, pandemic times.

“Right now, the Fed is predicting at least two years of economic impacts,” said Councilmember Kyle Richards of the need to add revenue to keep providing city services. “Things could get worse if there is a continued wave of infections,” he emphasized, “or they may contribute to continued economic impacts. These are the facts.”

“In a recession, it’s hard to justify [a new sales tax] as good public policy,” Councilmember Stuart Kasdin said, who is often Richards’s ally on the council. “We’re not [up] against a wall,” he said, because the previous round of budget reductions maintained the city’s rainy day fund. “Those funds are available, and if we need them, we’ll use them.”

At the heart of the disagreement was Kasdin and Roger Aceves’s contention that the tax would affect people on the lower end of the economic scale the hardest and residents who could not vote. While Richards, James Kyriaco, and Mayor Paula Perotte acknowledged the timing was bad, they insisted that services all residents counted on the city to provide were otherwise threatened.

Kasdin and Richards were both voted onto the council in 2016, and both have serious experience weighing the costs and benefits of plans and programs. Stuart Kasdin was a member of the White House Office of Management and Budget in a previous lifetime and taught government at George Washington University. Kyle Richards is the academic policy analyst for the UCSB Academic Senate and has been there for more than two decades. When they were first elected, the two often saw eye to eye on council issues. Here, they parted ways.

“I understand a sales tax is regressive,” Richards said. “Losing government services is also regressive. If we have to cut services like the library, community center, parks, roads — it will hurt the poorest the most.”

Richards noted the current thinking: “There’s a growing worry and realization that the virus and its economic impacts will be wider, deeper, and longer lasting than originally thought. Scenario 2 [budget cuts] might be enough to weather the storm, but we might need additional cuts.” He added that one of the city’s largest economic engines, UCSB, was still uncertain if on-campus classes would resume or if students would return.

“Goleta might need additional revenue that’s not in the budget for programs like economic stimulus and other safety-net programs,” Richards argued, asking where the money would come from when sales and hotel taxes were already down.

Richards also said he didn’t understand why there was opposition to letting Goleta voters choose. Consultant Richard Bernard, who had spoken earlier, had taken surveys that showed support for the tax increase had actually grown between February and May to 68 percent of the 579 likely voters surveyed.

The mayor agreed with Richards but added a twist: “I want to make one point crystal clear,” Paula Perotte said. “I am not voting to raise Goleta’s sales tax. I am voting to put the measure on the ballot to let voters decide.… By election time, maybe the virus will be beaten and the economy returned to normal,” Perotte said. “But the virus is making a comeback in 17 states, California being one of them. Most predict that a vaccine might be available a year from now at the earliest.”

The mayor noted that the state and federal governments had yet to help her city and that the next stimulus package was stuck in Congress. “We’d be tone deaf if we deprived voters of the chance to vote on this measure,” Perotte said.

Kyriaco, who joined the council in 2018, recognized the tax would most affect people with lower incomes, but he thought the issue had to be balanced against what accomplished the most good. Though the survey offered that much of the city’s sales tax is paid by people living outside Goleta, Kyriaco noted that likewise, city residents work and buy in other areas. He’d been struck by Public Works’ words the previous week that the city could “pay now or pay a lot more later” to repair roads; as they deteriorated, they would need more rehabilitation.

The proposed measure, if passed, would appear on November’s ballot: “I do not believe we will see a higher turnout than the one we are about to have, including from members of underrepresented populations,” said Kyriaco, who has run campaigns for several Democratic candidates in the past. “I think we are going to see a significant increase in the numbers of less-likely voters, occasional voters, first-time voters, every which kind of voters.” The state and county were taking every step possible to ensure people could vote, he said. “The challenges we face won’t go away. And they won’t resolve themselves if we don’t put this on the ballot.”

Aceves, the longest-serving member sitting on the council, weighed in last. “The great majority of our constituents are out of a job, furloughed, fired, or their business is not returning,” he said. If 579 people were polled, even more went un-polled, Aceves thought. “These are the ones who will vote in November.” Just as the public was tightening their belts, “staff did a great job cutting expenses. That’s what the public wants you to do,” he told the other members of the council.

In normal times, Aceves claimed, he would totally support raising Goleta’s tax by one percent to the level of Carpinteria and Santa Barbara’s 8.75 percent. “But now is not the right time to raise taxes, absolutely not, not when we’re going into a recession,” he said, and he predicted a depression would follow. Residents who were out of work and on unemployment would find that ending in July, Aceves added. To raise the tax by one percent “just does not look good.” Cutting expenses and making income without raising taxes was the way to go: “We’re not going to be able to tax our way out of this.”

Needing a four-person vote to gain the ballot itself, the measure instead went 3-2 for the ballot language to return to the council battleground on July 7.

---

At the Santa Barbara Independent, our staff continues to cover every aspect of the COVID-19 pandemic. Support the important work we do by making a direct contribution.