Modesto says it doesn’t have enough money. How did voters respond in sales tax survey?
Modesto officials considering a tax measure for the November ballot got some good news Thursday — The city’s polling firm found that 65% of the voters it surveyed support the sales tax increase.
True North Research President Timothy McLarney went over the survey results at the City Council’s Finance Committee workshop for the city’s upcoming budget. (The City Council in January directed City Manager Joe Lopez to hire a polling firm to gauge voter support for a tax measure.)
The survey found 54.7% of respondents were very or somewhat satisfied with city services. And 65% would support a 1% sales tax increase that was spent on police and fire services, safer and cleaner parks and other public spaces, better traffic enforcement, reducing blight and maintaining streets and sidewalks.
Modesto officials are considering a general sales tax, which requires 50% plus one vote to pass.
The survey was conducted March 25 to March 30 of a random sample of 1,117 registered voters likely to vote in the November election. The survey had an overall margin of error of plus or minus 2.9%.
Support for the sales tax dropped to 60% after survey respondents heard arguments against it, including that residents already pay too much in taxes and now is not the time to raise taxes as they cope with the pandemic and inflation.
McLarney said these poll results were very strong among the entire range of voters and showed a strong demand among voters for the improvements the tax increase would fund.
For instance, he said in dual Republican households — which are the most conservative and tax-resistant — the initial support was 59% and dropped to 52.1% after they heard the arguments against the tax.
He said his firm’s experience in other California communities is that Republicans’ support for these tax measures often comes in percentages “in the 30s, maybe the 40s.”
“To have 59% of Republicans also support this proposal indicates that clearly there is a lot in this measure that is attractive to your residents and it sort of supersedes partisanship,” McLarney said.
A 1% sales tax would raise Modesto’s sales tax rate from 7.875% to 8.875%. The city estimates the tax increase would bring in an estimated $39 million annually to its general fund, which primarily is spent on public safety.
The Finance Committee voted 3-0 on Thursday to have Lopez prepare a ballot measure for a 1% sales tax and bring it to the full City Council for consideration. Council members David Wright and Rosa Escutia-Braaton and Mayor Sue Zwahlen cast the votes.
“I think our citizens are ready for us going to the next level, making sure we have the funds to do what we need to do to make this a city that they can be very proud of and also a city that people want to come and visit and spend their tax money here,” Wright said before the vote.
Expenses outpacing revenues
McLarney’s presentation came on the third and final day of the Finance Committee workshops for Modesto’s 2022-23 budget, which starts July 1.
The city’s proposed 2022-23 operating budget is $512 million, with $168.5 million of that for the general fund.
Modesto officials told a familiar story about the general fund. It continues to have a structural deficit because while its revenues are growing they are not as growing as fast as its expenses. Those expenses are primarily for employees compensation, including pension costs.
City officials have said they have to offer competitive compensation to compete for quality employees among other public agencies.
The general fund gets its revenues from sales, property, business and other taxes. The city is projecting general fund revenues of $168.5 million in 2022-23, which is about $5.3 million more than the current general fund revenues. But the city is facing about an $8.2 million deficit.
City officials propose closing it by using $4.5 million from the nearly $46 million in one-time pandemic relief funding Modesto has and is receiving from the federal American Rescue Plan Act and through such cost savings measures as not filling 10 vacant positions.
Lopez, the city manager, laid out what Wright called a sobering assessment of the general fund and the city’s struggle to provide the services residents expect.
Lopez said the city is at an inflection point in terms of the services it can provide.
For instance, he said, the police and fire departments’ share of the general fund budget has risen from 67.9% a little over a dozen years ago to 81% today. That has meant less money for parks and recreation and other basic services.
And while the police and fire departments have seen their budgets increase, the city has cut dozens of police officer and firefighter positions over the years because the city cannot afford them. (The city also has eliminated dozens of other positions since the Great Recession.)
Police have 26 vacancies
The Police Department is allocated 210 sworn officers, from Police Chief Brandon Gillespie to new officers undergoing police academy training.
But Gillespie said he has 26 vacancies and instead of staffing patrol with 90 to 100 officers he is operating patrol with 80 officers. He said in an interview that officers can earn more and have lower workloads at other law enforcement agencies.
Officials said at the workshop that Modesto has 0.9 police officers for every 1,000 residents and should have 1.4 officers per 1,000 residents based on its crime rate.
Lopez said Modesto’s 76 parks have a $74 million backlog in deferred maintenance and repairs. And the city is pruning its approximately 81,000 trees that line city streets every nine to 11 years instead of the preferred five-to-seven-year cycle.
Councilman Chris Ricci said at Thursday’s workshop that Modesto has come up with solutions that have the potential to take a big bite out of the city’s problems.
He said that includes the Downtown Streets Team that provides work and other opportunities for homeless people, the park ranger program, having outreach specialists work with homeless people, and pairing mental health clinicians with police officers on calls involving people undergoing mental health crises.
But Ricci said the city is paying for these efforts with one-time funding, often from the American Rescue Plan Act. “We have great ideas ...,” he said. “... We don’t have the ability to sustain the programs in the long term. I find that absolutely terrifying.”
Jared Boigon with San Francisco-based TBWBH Props & Measures joined McLarney from True North in Thursday’s presentation. True North is based in Encinitas in San Diego County.
How much the city is paying the consultants and additional information about the survey — including a breakdown of respondents by gender, age, party affiliation as well as how many completed the survey in Spanish — were not immediately available.
The Bee has filed a California Public Records Act request with the city for this information.
Citizens oversight panel?
Boigon and McLarney said while the survey results were very promising (McLarney said they are among the best he’s seen in the current election cycle), the city still has work to do if it decides to put a sales tax measure on the November ballot.
That includes telling the public the facts about the city’s finances and its needs and creating trust that the city will spend the tax as it says it will. As a general tax, Modesto could spend the tax increase on practically anything.
But cities that have passed general sales taxes often put in place nonbinding resolutions stating how they will spend the money and created citizen oversight panels to ensure that happens.
Modesto put sales tax measures on the November 2013 and 2015 ballots. Voters rejected both of them.
The survey results and other information from the budget workshops are available at www.modestogov.com/252/Operating-Budgets and then by clicking on the “Budget Workshop Presentations” link.
This story was originally published April 25, 2022 at 6:30 AM.
