October 19, 2013

Our View: Measure X tax increase is too much and too general

If the question were simply whether Modesto needs more police officers and some more money to hire them, the answer would be a simple yes.

If the question were simply whether Modesto needs more police officers and some more money to hire them, the answer would be a simple yes.

But that’s not the question that the Modesto City Council has put before voters with Measure X. The council has asked for a whopping $26 million a year more in revenue by raising the sales tax by one percentage point.

The council promises half of that will be spent on public safety, but it is not a guarantee. In order to make Measure X easier to pass – requiring only 50 percent plus one for approval – it was made a general tax increase rather than a dedicated tax hike, which needs a two-thirds majority. So it becomes a “trust us” tax.

The idea of trusting the current council is made more difficult by the fact that this measure was rushed onto the ballot only a few weeks before the deadline.

That last-minute action is the primary reason that the sample ballot contains no opposition arguments. Opponents – there are two groups – didn’t have time to meet the deadline.

The strongest opposition to Measure X may not come from organized groups but from general distrust of government, especially after this month’s disruptions in Washington, D.C.

Furthermore, the sales tax just went up as a result of Proposition 30, which was approved last fall. Currently, the sales tax rate in Modesto is 7.625 percent. The northern San Joaquin Valley community with the highest sales tax rate is Lathrop at 9 percent.

The Bee cannot support Measure X for several reasons.

• The city and the council handled the whole process poorly. They did not adequately explain to taxpayers about the cuts made or not made and what permanent changes the city has made in doing business. In budget hearings just last spring, the council was not given options for making serious cuts. Councilwoman Stephanie Burnside, who leads the Finance Committee, pointed this out repeatedly.
• While the city has reduced general fund positions, the comparison point is usually 2008, which was a high point in both budget and workforce.
• With the economy slowly improving, property tax and sales tax revenues are rising. They stand at $11.4 million and $27.8 million, respectively, for 2013-14, and are expected to go up about 2 percent per year.

Some have asked why that money can’t be spent to restore police positions and boost other departments. The answer boils down to this: Those increases in revenue will be partially swallowed up by rising payments to the California Public Employees Retirement System and to replenish the employee benefits and workers comp funds.

If Measure X passes and the council lives up to its promise to spend the money on new and restored positions, other parts of the city budget likely will have to be cut because of this red ink. That’s going to be a hard sell to the public – and to the employee bargaining units, all of which have expired or soon-to-expire contracts.

• Citizen oversight committees sound like a good way to track spending, but as we have seen with those overseeing school bonds, they haven’t been particularly effective. They have no influence on decisions ahead of time and become something of an audit committee. It is council members and the city manager who will be making the spending decisions.
• Although we would like to have more police officers on patrol and in special units such as gang prevention, a big boost in funding for the city will do nothing to relieve the crowding at the county jail facilities or the squeeze at the stage of prosecution. There is a long-range plan in the works to expand jail space, but that is separate from and won’t be affected by Measure X.
• We believe that Stanislaus County needs to have a countywide sales tax dedicated to road and transit improvements. Being a “self-help county” would make us eligible for significantly more state and federal dollars. The council agreed to word Measure X so that if a countywide road tax is passed, the city’s 1 percent tax would be reduced by one-half cent. Sounds nice, but practically speaking, if Measure X goes into effect, we don’t think that Modesto voters will understand – or believe – this arrangement.
• Proponents are making the case that Measure X is just a penny. Actually, it is a one percentage point increase in the sales tax, the most regressive form of taxation. Sales tax increases hit poor and middle-income families the hardest.
• If passed, Measure X would expire in six years. But with most of the money devoted to ongoing expenses, specifically salaries, we are concerned that it would become a forever tax.

Modestans do want to get off the auto-theft list. They want to feel safe and to enjoy their parks. But Modestans also want their tax money spent prudently and with utmost accountability and transparency. In the past couple of years, the council has fallen short of that in several key areas, from the initial waste in the opening rounds of the Neighborhood Stabilization Program to the price paid for land for so-called affordable apartments.

Former City Councilman Tim Fisher made some reasoned arguments against Measure X in our editorial meeting. A one-percentage-point increase in the sales tax, adding up to $156 million over the life of the tax, would be a serious drag on the economy. And, he asked, has the council looked at all the strategies to downsize departments other than public safety?

Measure X asks too much of Modestans without a guarantee that it will be spent in the most critical area. We would support – and think many residents would as well – a one-half percent sales tax increase dedicated to public safety.

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