|Sierra Madre's 10% UUT rate is among the highest|
Verbiage from the sample ballot argument in favor of Measure UUT follows below, and is in italics. There is a lot that needs to be commented upon, so I have decided it would be best to discuss this statement paragraph by paragraph.
We respectfully ask that our citizens approve Measure UUT which will cap and extend the Utility Users Tax (UUT) at its current 10% rate to preserve city services and keep Sierra Madre a full-service city with its own Police, Fire and Library.
I would have used the phrase "fellow residents" rather than "our citizens." I am not certain that very many of the people living in this town would happily see themselves as being subjects of the City Council.
It should also be pointed out that while it does sound like sacrifices are being made by capping our utility taxes at 10%, that rate is still at the extreme high end of the UUT scale in California. Only one city in this entire state now has an 11% UUT rate, but it taxes fewer categories of utility usage than we do. Meaning that Sierra Madre will still lead the state in total utility tax rates should Measure UUT pass, capped or not.
There is also that rather unfortunate fear mongering the four elected officials who signed this document seem all too eager to engage in. The absurd claim that we might need to outsource a volunteer Fire Department aside, there is little the City of Sierra Madre would not be able to renegotiate to the benefit of all should Measure UUT fail at the polls. The Police Department, which consumes about 53% of our General Fund budget, might find itself having to take a shave, but what person working in the private sector has never had to worry about budget cuts?
Besides, didn't we have a Police Department before Sierra Madre even had utility taxes? We can certainly afford to keep one with a 6% UUT. All it would take is a little hard work and a willingness to achieve financially realistic compromises.
If Measure UUT is not approved, the UUT will sunset to 6% by July 2016, resulting in an annual loss of approximately $1,000,000 to our $8,000,000 General Fund - nearly 13%. It is highly unlikely that property tax, sales tax, or other revenue sources will increase sufficiently to offset this loss. Unlike property tax or sales tax, each dollar paid through the UUT stays in Sierra Madre and funds local, rather than county or state services. Sierra Madre will be faced with reductions that will degrade services, compromise maintenance of facilities, and could result in outsourcing of one or more departments such as Police, Paramedics or Library.
Again, it is sad to think that all these four members of our City Council have to offer us is fear mongering. If the Police Department should ever be outsourced, it would be because of their failure to negotiate a realistic deal with the SMPOA.
I suspect that given the alternative of either losing their jobs or agreeing to a contract that the people of Sierra Madre can actually afford, a satisfactorily negotiated deal with our Police Department could be reached. This is how business gets done in the real world. It is also what happens when we have a City Council that does what it was elected to do.
The UUT comprises approximately 31% of the General Fund, from which Public Safety, Library Services, Public Works and Community Services are funded. We recognize that our citizens demand the most value for their tax dollars and have successfully implemented cost-cutting initiatives since 2010 that have saved nearly $1.3 million, keeping the UUT below the voter-approved rate of 12%. Measure UUT is not an enhancement, it will keep the tax at its current 10% rate, while providing the means to maintain services at the present level.
This is the paragraph where most of the larger discrepancies (a nicer term for it) can be found. First off, the voters approved the possibility of 12% utility taxes way back in 2008. A rate that, had it ever been implemented, would have literally been off the chart. No city in California has ever dared to put a 12% utility tax into effect.
What the voters approved in 2012 was a 6% utility tax. This is the decision of the people that Walsh, Harabedian, Capoccia and Moran are pretending never took place. Measure UUT is actually an attempt to reverse that 2012 vote. A do-over ballot initiative created in hopes of reinstating something that happened somewhere back in the previous decade.
Another thing that needs to be questioned is the claim that City Hall has somehow managed to cut $1.3 million in costs out of its budget over the last two years. As was pointed out here on The Tattler last Friday (link here), the data being supplied by California State Controller John Chiang shows that this might not be the case. While it is true that total salaries dropped by $585,358.00 to $4,824,552.00, benefit and retirement costs soared from $992,452.00 in 2010 to $2,045,825.00 in 2012. This huge increase, much of it paid for by the taxpayers, is more than double that of 2010.
What this means is that total yearly employee costs, rather than having been significantly cut, instead actually increased during this period, going from $6,403,662.00 to $6,870,377.00. And rather than any mythological $1.3 million plus dollars in savings during this two year period as the UUT4 is claiming, it appears that a significant percentage of this money was instead quietly redirected into increasing employee benefit and retirement costs.
Based on what you can see on the State Controller's site (link here), City Hall's often stated demand that our combined utility tax rates must remain at the very highest levels in California is now being driven by the need to fund vastly more expensive employee retirement and benefit costs. The majority of which are still paid for by the taxpayers.
The big question now is do we as taxpayers actually want this? As a small town of less than 11,000 people, can we really afford to pay for a City of Los Angeles style of government?
The choice is to continue the UUT at its current rate, or face difficult budget cuts where one or more of our major departments are outsourced, or where public safety, public works and community services are significantly curtailed. Any of these outcomes would change the nature and character of this safe, self-sustaining village.
City Hall's notion that it is the most vital portion of our community's "nature and character" is an interesting, if somewhat self-indulgent, viewpoint. I would prefer to believe that such qualities come from the people who actually live and pay taxes in this town. And yes, we actually are quite self-sustaining. If we weren't it would be hard to afford to live here.
City Hall, on the other hand, is not at all self-sustaining. It is utterly dependent upon our tax money for its continued existence. And, as it stands now, they could be receiving far more than they actually need to get their job done. The value of what we are receiving in exchange for our generosity might not be where it needs to be either, and by lowering the UUT hit to 6% a lot of the excess baggage we are currently carrying will at last be removed from our backs.
Budget cuts may be difficult, but merely throwing more tax money at our perceived problems is not easy, either. Just ask the residents of our community who struggle to somehow make ends meet every month. Unlike City Hall they do not have the luxury of demanding more money every time their budgets get tight.
Tomorrow I will discuss the sample ballot argument written by three Sierra Madre residents who oppose the passage of Measure UUT. I hope you'll join in.