Opponents and proponents of utility taxes have differing views on the role of local government
On November 5, voters will decide more than just the fate of the utility tax. They also will determine, indirectly, how much of a role local government will play in the economy of the region.
Both the city and county of Sacramento have utility-user tax measures on the ballot this election year: Measure T and Measure G respectively. Residents and businesses pay a utility-user tax either to the city or the county. The tax is levied on electricity, natural gas, telephone and cable-television services.
Players on both sides of the issue say they want what is best for city and county residents, yet proponents and opponents have vastly different visions of the role of local government and of how taxpayers’ money should be used.
Ted Turnes, president of the Natomas Community Association, fears the impact Measure T would have in his own community if it passed. More importantly, though, he fears what it would mean for city government.
“My concern is that this will reduce the city’s ability to act proactively. It has only been in the last few years that I’ve really seen the city have the revenue to really allow them to take the time to do the analysis and establish policies to ensure that the city is a good administrator and that it treats its residents fairly and equitably,” Turnes said.
But members of the Sacramento County Taxpayers League don’t embrace such a vision, so the 41-year-old nonprofit organization is challenging both the city and county taxes. Joe Sullivan, director of the league, said the fact that Sacramento city residents pay a utility-user tax that is three times higher than that of any other city in the county is unfair, an inefficient use of taxpayer money and an undue financial burden for low-income residents.
Sullivan’s response to the city is simple: “Look at your budget and see where the money is going, and some of that money should be diverted to cover shortfall.
“If you go through the entire budget, they may have to cut back a little bit, but not if they handle their money properly.”
The league takes its watchdog role seriously, by scrutinizing government spending and by directing a spotlight on how public officials use the public’s money. Sullivan said the league wants to see the utility-user tax reduced to a level that is fair and in line with that of the county. And the league ultimately would like to see the utility tax eliminated throughout the county, which is why it brought both measures to the ballot.
City and county officials, as well community organizers, are anxious about how extensive cuts in services would be and how they would affect quality of life in the Sacramento region. For example, Turnes fully expects that the parks that have been slated for development in North, South and West Natomas would be put on hold; library hours would be reduced; and police presence in certain areas would be reduced.
“When you reduce the city’s budget by $39 million, there are going to be some changes. There’s no question about it,” Turnes said. “I think many of the changes in Natomas would be the same as citywide, but I also think there would be the potential for some additional changes in Northern Natomas, an area that is expanding rapidly and in a development mode.”
Presently, the city’s utility-user tax is 7.5 percent; the county’s is 2.5 percent. Yes on Measure G would mean the county would continue to collect the tax, and no cuts in county services would ensue. If voters approve Measure T, the city’s utility-user tax would be reduced to that of the county during a five-year period, and city services would be cut.
Members of the Taxpayers League say this incremental reduction would ease the stress on the budget and would allow the city to adapt and find better ways to use other sources of revenue. City Finance Director Gus Vina, however, strongly believes the passage of Measure T poses a serious threat to the city’s budget. He said that at the end of five years, the seemingly small 1 percent annual reduction in funding would have caused the city to lose close to $8 million in revenue annually.
“We have to see if the measure passes or not. Then, we really have to sit down and figure out where we can make cuts that will reduce the city’s budget by $8 million dollars per year,” Vina said. “We have not made (final) decisions, but there’s no way you can avoid cuts to public safety. There’s no other way to do it.”
Vina said police and fire protection alone account for 60 percent of the city’s budget. On average, each city household pays between $12 and $15 each month through the user-utility tax. Those who cannot afford it get it back in the form of a rebate, and those who can afford it are getting a lot of services for that amount of money.
Although few city and county agencies want to discuss specific budget cuts, Vina ventured to say that the city anticipates losing between 5 percent and 20 percent of its staff in every department if Measure T passes. That could mean cutting 50 to 200 police officers, which would mean slower response times for both city and county residents’ calls; neighborhood POP (police on patrol) officers could be pulled out of neighborhoods that sorely need them. Passage of the measure also could lead to the closure of between two and seven fire stations and, therefore, slower response times by stations that have to cover a larger geographic area.
Yet, despite these dismal projections, Sullivan dismisses the city’s claims by saying it’s just crying wolf.
“That’s the standard argument,” said an emphatic Sullivan. “All of the police are going to be gone. All the firemen are going to be gone. They’re going to shut all the stations, and take milk away from children. That’s the standard pitch. But notwithstanding, I respect the fact that they’re going to have to look at their budget, and they’ll be doing this over five years. They make it sound as if this is going to drop from $39 million next year. That’s not the case.”
Sullivan further explained that the league garnered signatures from 15,000 residents who support a reduction in the tax. But Vina said the city’s contact with community members reveals that members of the public like the services they have and do not want them reduced.
Proponents of the tax believe the Taxpayers League’s view of the city budget process is shortsighted and doesn’t look at the larger picture. “I don’t buy the underlying argument that the city’s not using its revenues wisely,” Turnes said. “To reduce the tax, you’re really throwing the city back to where it was, and not only that. My greater concern is that the momentum the city has going on a number of initiatives to improve the quality of life for the long term—that momentum would just be stopped.”