Proposed tax hike draws support, criticism, but little community response
on October 12, 2014
After fifteen minutes, when it was clear nobody was coming to fill the twelve empty chairs in a conference room in Hilltop Mall, members of the city’s finance department packed up their presentation materials. They said turnout at the other meetings has been similar.
This was the fourth public information meeting for Measure U, a proposed one-half cent sales tax hike (up to 9.5 percent) on the ballot this Nov. 4. Amidst the public figures vying for attention this election season, the quiet measure has sprung to the political forefront, if not quite into public discourse.
In an attempt to raise awareness about Measure U, the city’s finance department has spent a considerable sum of money to reach out to the public with fliers, mailers and more than a dozen meetings with the community and business representatives.
“Nobody’s been opposed to it,” Richmond revenue manager Antonio Banuelos said. “On the contrary most have been championing it. Not one single merchant opposed to it.” He cited the Council of Industries (which couldn’t be reached for comment) and the 23rd Street Merchants Association as groups in support of the measure, projected to bring in more than $7.5 million in tax revenue for 2015. About half of that would come from Richmond residents ($2.93 per resident, per month) and the other half to be split between non-Richmond residents and businesses.
But some merchants have raised doubt about the Measure. Sergio Rios, vice president of the 23rd Streets Merchants Association and owner of Bob’s Cleaners, said he knew very little of the tax. Rios added that he’s wary of it because of the heavy tax burdens he already pays and the city’s lack of transparency. “Where’s the rest of it [property taxes, etc.] going?” he asked.
Most taxes pool into what’s known as the city’s general fund, where money is disseminated at the discretion of the city council. And right now, according to the finance department’s mid-year review for 2014, the city is dealing with a $7 million budget deficit. That forecast was confirmed by finance director James Goins, who said the 2012 Chevron refinery fire is still costing the city $6 million a year in depreciated values.
In fact, according to the review report, Richmond’s total assessed values decreased 14.6 percent last year. (The actual “structural deficit” the city currently faces is a result of almost $141 million in expenses with a little more than $134 million in revenue.) Across the country, cities on average increased 3.45 percent in assessed value. Richmond was the only city in Contra Costa County to experience a decline in assessed values.
Goins said the revenues from the seemingly sudden Measure U tax would be split three ways between street improvements, public safety and health, and wellness and youth services. But the Measure U funds will actually be going into the general fund purse, so it isn’t possible to be certain of how the dollars will be spent. It will ultimately be up to the council’s discretion to be “used for any legal municipal purpose,” city attorney Bruce Goodmiller wrote in a Measure U voter information pamphlet.
Councilman Tom Butt, an ardent proponent of Measure U, said people complain to him more about poor infrastructure conditions than anything else. “This is really a slam dunk for me,” he said.
According to a feasibility survey conducted by Godbe research, crime prevention tops the list. Street repairs also rank high among voters. Fifty-eight percent of voters said they’d be more likely to vote in favor of the measure if they heard the money would be used to increase police patrols in their neighborhood; 50.4 percent said the same in regard to street improvements.
“The only source of money we have for street repairs are gas taxes and Measure J funds,” Butt said of Measure U’s value. “That’s only about $4 million a year, just to stay even where we are. We need about three times that much [to improve the streets].”
But fellow councilmember Corky Booze, the dissenting voice on the council, said that’s a null point, as he doesn’t think the money will realistically end up going toward the roads. “The city doesn’t have a money problem,” he said. “It has a spending problem, and more taxes on the people’s backs isn’t the answer.” He cited various debts the city has incurred recently—including some union benefits that have been carried over from last year (“we keep kicking the can down the road”)—debts he said will likely absorb much of the Measure U revenue.
Likewise, Alex Aliferis, executive director of the Contra Costa Taxpayers Association, argued that the “lack of oversight” is worrisome. “What is the guarantee that this tax will not be used to pay for spiraling pension, debt, and salary costs?” he wrote in the voter information pamphlet. “General fund tax money can be used for anything.”
Councilmember Jim Rogers disagreed, writing that the Taxpayers Association is funded by the exact out-of-town businesses that would be most affected by the tax. “None of 100,000 Richmond residents filed ballot arguments against Measure U,” Rogers wrote in the same pamphlet. “The ½ percent sales tax will restore $7.5 million budget cuts to vital services like pothole repair, police, firefighters, libraries, and parks/recreation.”
Booze said he also opposes it because there’s no expiration date on the tax, known as a “sunset clause.” Neighboring El Cerrito, which was the model for Measure U, currently has a 2017 sunset on its 9.5 percent sales tax. But on this November’s ballot, El Cerrito is asking for a nine-year extension and doubling of Measure R, passed in 2010. Booze added, “I don’t like never-ending taxes.”
But Goins said there’s a good reason for it. Instead of trying to use the tax revenue piecemeal, the finance department intends to buy a lump-sum bond (likely $30 million) that would be paid off over the years with the incoming tax dollars. Revenue manager Banuelos said, “With the bond, we can use the money quicker and have bigger impact [than we could with] increments.”
So far, the outreach hasn’t had much impact outside of the Civic Center. Sergio Mendez, an assistant branch manager Wells Fargo in Richmond, said he hasn’t heard a word about it from his usually vocal customers, so it’s “off my radar.”
It will be on radars come Nov. 4. The measure needs 50 percent approval, plus one, to be passed.
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