Comment on City of San Leandro Plans for Parcel Tax in November 2018
I support tax measures that enhance public services and programs as long as I am confident the money will be well spent - which requires at a minimum that the public agency is currently managing its budget well.
Accordingly, I am opposed to the hasty and ill-planned effort by the City of San Leandro to place a parcel tax measure on the November 2018 ballot. The City is running a significant budget deficit due to exploding pension costs for public safety workers. Any funds raised in the new tax will be used to backfill this deficit and not address the cause of the City budget deficit nor result in any sustained, enhanced services for our community.
Moreover, the San Leandro school district's parcel tax is expiring in June 2018. The district is managing its funds well. Renewing its parcel tax is vital for the continued success of our schools. If the City Council places its own parcel tax on the same ballot as the school parcel tax, the City Council will likely cause both measures to fail (as each requires 2/3 support for approval).
The City Council, if it proceeds with a parcel tax this November, is risking inflicting significant damage to the partnership between our City and schools that so many of us (myself included) have worked extremely hard to foster and enhance for the benefit of the children of our community and welfare of all San Leandrans.
Below is an article in today's San Leandro Times on the City parcel tax under consideration.
City Council Looking at Parcel Tax
Tax money wanted for rising police, fire salaries, pensionsBy Amy Sylvestri, San Leandro Times, May 17, 2018
xThe San Leandro City Council is considering asking taxpayers to open their wallets and approve a special parcel tax for the police and fire departments.
The City Council voted unanimously on May 7 to begin the process of putting a parcel tax for public safety on the November ballot, which would largely go to police and fire salaries and pensions.
The next step will be to poll the public to see if there is enough support to pass the tax.
It’s an election year and the endorsements of the police and fire unions can give a candidate a boost. More than half of the council is up for reelection in November.
But the tax may be a tough sell to voters – as the city’s budget projections show it will be in the red for at least the next decade, due to rising expenditures.
The voters have approved four other tax measures in less than five years. Measure HH passed in 2014 and extended and doubled to a half-cent an older sales tax. Measures NN (a tax on marijuana sales), OO (a tax on warehouse space), and PP (a hotel tax) were passed in 2016.
The new public safety parcel tax is being considered because the city faces looming unfunded pensions. Also, the police and fire unions say they need more money for equipment and staffing.
Currently, the fire department wants $650,000 for new vehicles and equipment, as well as money for additional crew members. The police say they need $400,000 for new radios.
But by far the biggest expenditures come from salary and pension costs.
Currently the San Leandro Police Department accounts for $40 million of the city’s $112 million budget expenditures, which funds 135 staff members – 93 of which are sworn officers. The average annual cost of an officer is $270,000 including benefits.
The city contracts fire services with the Alameda County Fire Department at a cost of $23.7 million per year, which pays for 63 firefighters in town.
The amount of the tax is still to be determined after public polling results. The city is considering taxing an additional $140 per parcel, which would bring in $6 million per year.
Yet to be decided: commercial and residential priorities could be taxed a different rates, the tax could be assessed based on size or per parcel, exemptions for seniors and disabled people could be considered.
Only one public speaker addressed the City Council regarding the tax. Sean Burrows of the firefighters union unsurprisingly said that he’d like more funding and said that putting a tax on the ballot couldn’t hurt because it gives the public a chance to make the decision.
Former Mayor Stephen Cassidy emailed a statement Monday saying that the city shouldn’t attempt to ask for more taxpayer money at the same time it is forecasting 10 years of budget deficits and has $188 million in unfunded pension costs.
“Exploding pension costs constitutes the cause of the city’s looming fiscal crisis, (so) San Leandrans will legitimately ask why the city has not immediately cut its expenditures and entered into negotiations with employees to reduce pension costs prior to seeking any new tax,” wrote Cassidy. “There will not be (enough) support in the community for a parcel tax to fund rising and unsustainable pension costs for public safety officers.”
Councilman Pete Ballew acknowledged that he has spoken with several residents who are concerned about the city’s finances.
“I haven’t even asked the public; they’ve volunteered it,” said Ballew. “They are very vocally wanting to know what we are doing to raise revenue and lower expenditures.”
Ballew, who is a former police officer, said that the city’s cops and fire personnel are their “own worst enemy” because he says they do their jobs so well that he public might not think they need more staff or funding.
Aside from the issue of public support, another challenge will be a significant time crunch – the city usually likes a full year to work on a tax measure and it’s now less than six months to election day.
Councilman Ed Hernandez countered that waiting might not pay off if there is an economic downturn in the meantime.
“If we don’t do it now, the probability of it passing in 2020 may actually be less,” said Hernandez.
Mayor Pauline Cutter ultimately voted to go ahead with the polling, but said she was wary of rushing the tax and having it result in an unsuccessful vote.
“I hate to be the lone man out but I’m not sure this is the right thing for right now,” said Cutter. “I’m just worried this is going to be back to bite us and we won’t be supporting our police and fire like we should.”
City Council members are all vocal about that support because the backing of those unions can be helpful during their campaigns. This November, Cutter, Councilman Deborah Cox, Councilman Lee Thomas, and Councilwoman Corina Lopez are up for reelection. Councilman Benny Lee is in the middle of his second term, but is running for mayor against Cutter.
The school district is also considering a parcel tax of its own, which could crowd the ballot and potentially discourage voters from saying yes to both.
Another challenge is that earmarked parcel taxes require a supermajority of two-thirds for approval.
The costs of getting a parcel tax on the ballot would be about $130,000 including consultant’s feels, the survey, and election costs, according to a city staff report.
The City Council said they want the police and fire unions to chip in on the the costs of the survey.