Need U back: Leaders think Sacramento’s one-time tax increase has lasting appeal

Facing soaring pension obligations, City Council considers asking voters for another round of Measure U funding

This is an extended version of a story that ran in the March 23, 2017, issue.

Sacramento city leaders are doing a U-turn on Measure U—at least on their plan to phase it out.

Measure U is the temporary half-cent sales tax voters adopted in 2012 to offset recession-era cuts to the police, fire and parks departments, primarily. The measure called for the tax to end in 2019. Yet, if city leaders want to leverage this year’s unrelated $12.8 million budget surplus on initiatives for affordable housing, homeless relief and youth services, then Measure U has to keep backstopping the general fund.

The special tax raised north of $42 million last year. That’s a lot, but the city is staring at more than $320 million in unfunded liabilities thanks to ballooning pension costs.

That reality was made clear last week to the Measure U Citizens Oversight Committee. City Finance Director Leyne Milstein told the committee that council members are working to get Measure U back on the 2018 ballot.

When asked by committee members, Milstein acknowledged the city’s policy originally called for a “wind down” of Measure U spending next year—but no longer. “We’re taking direction from our policymakers, and their direction right now has been to pull together a subcommittee of the council to talk about Measure U renewal,” Milstein said. “Thus far, we have not received direction or response to suggestions for planning for wind down.”

The council members working to bring Measure U back are those on the Budget and Audit Committee, including Mayor Darrell Steinberg. It was during a February Budget and Audit Committee meeting that Steinberg announced his intention to put at least $5 million of the city’s current budget surplus into its Affordable Housing Trust Fund, which has failed to produce any affordable housing since the council weakened regulations that make developers contribute to its mission. Steinberg also identified paid youth internships as another priority for one-time surplus spending.

Speaking to the oversight committee, Milstein said that, so far, there has been no direction to put surplus dollars aside for the event voters don’t re-up on Measure U in 2018.

Over the last four years, Measure U funds allowed the parks department to regain 60 percent of its 2008 staffing levels, while the police department got back to 94 percent. The fire department, Milstein testified, has been fully restored to pre-recession staffing levels.