IE Business Daily Business news for the Inland Empire.
Hemet and Temecula will have proposed sales tax increases on their local ballots this fall, and Riverside is considering doing the same. All three municipalities say they need more money to provide basic services, including police and fire protection.
When Hemet voters enter the ballot box on Nov. 8, they might experience a feeling of Deja Vu.
That’s because the city’s ballot will include a proposal to increase the city’s sales tax by one percent. If it passes, the measure will generate an estimated $10 million a year in revenue, every cent of which will be used to pay for more police and firefighters.
Hemet is not alone in considering a special tax that would raise more money for basic services. About 250 proposed bond measures, general taxes and special taxes will appear on local ballots in California this fall, said Michael Coleman, a financial consultant to the League of California Cities in Sacramento.
What makes Hemet unique is that, in June, voters rejected Measure E, a special tax that would have raised $10 million annually for more police officers and firefighters.
Because it was a special tax, Measure E needed a two-thirds majority to pass, a threshold it didn’t quite reach. The November ballot measure will be a general tax, which requires only fifty percent of the vote plus one.
Ordinarily, supporters of a proposed tax increase that voters rejected probably would wait a year or two before trying again. But Hemet’s need for more police and fire protection is so severe that Measure E’s backers decided to try again as quickly as they could, Fire Chief Scott Brown said.
“We’re at critical mass with this issue, meaning we can’t let this situation get worse than it is,” said Brown, who along with Hemet Fire Chief Dave Brown campaigned hard on behalf of Measure E. “We’re looking at handling 17,000 calls this year, and we don’t have nearly enough manpower for that. We’re still just little Hemet.”
By law, revenue generated by a general tax can be spent on anything, but the Hemet City Council has pledged that any revenue from the November tax initiative – assuming it passes – will be spent exclusively on extra police and firefighters.
Hemet is not the only Inland Empire city considering a special tax that would replenish its general fund.
Last week, the Temecula City Council voted to place a proposal on the November ballot that would add one-cent to the city’s sales tax, raising it from eight to nine cents. That would generate approximately $23 million a year while preventing the city from having to cut police and fire protection and some of its parks and recreation programs.
On Aug. 9, the Riverside City Council is scheduled to discuss placing a general tax on its ballot this fall, one that would raise the city’s sales tax by one cent.
Should Riverside voters say yes to that proposal, the measure would raise between $48 million to $51 million a year. That money will be spent on basic needs, including code enforcement, tree trimming and sidewalk and road repair, City Manager John A. Russo said.
“Right now, we’re just looking to fix the basics, the things that absolutely have to get done,” Russo said. “We probably won’t get all of it, but we can get close. We have to if we’re going to keep Riverside a first-rate community.”
Russo compared having to repair some of Riverside’s streets now to having to clean out a clogged rain gutter: you might get away with ignoring it for a while, but at some point it will do damage if it isn’t fixed.
“Sooner or later that thing is going to leak and it’s going to cause a problem,” Russo said. “And you can’t keep saying ‘we’ll fix it later’ because then it just gets worse and more expensive to fix. So we have to get our hands around this thing.”
Cities and counties are resorting to bond measures and special taxes in part because they aren’t getting help from the state capital like they used to, Russo said.
“California has dismissed itself from having to provide financial help to cities,” Russo said. “It’s happening all over, not just in California, but it’s worse in California because they took redevelopment away from us. The attitude in Sacramento is that we’re on our own and that we need to fix these problems ourselves.”
The absence of redevelopment, which the Brown Administration eliminated in 2012 in a budget-cutting move, is part of the reason Riverside hasn’t been able to build a downtown police facility, Russo said.
“We lease space from Riverside County, but the county has told us that’s not a long-term option,” Russo said “If we had [redevelopment] we would be able to build a downtown headquarters with a holding facility.”
Because it takes only a simple majority vote to pass them, most cities would be well-advised to try for a general tax rather than a specific tax, although passing any tax can be difficult, Coleman said.
“Hemet probably should have tried a general tax the first time,” said Coleman, who runs a consulting firm in Davis that educates municipalities on the intricacies of public finance. “They pass about two-thirds of the time. A special tax is approved maybe half the time.”
The Riverside tax would appear to have a good chance of passing. Sixty four percent of the city’s residents said they would support a one-cent sales tax increase that would pay for increased public services, and 63 percent said they see a need for such funding, according to a recent survey.
No matter the cause, someone or some organization is certain to oppose a proposed tax increase, and sometimes they succeed.
“There are always a lot of factors involved,” Coleman said. “I’ve seen [tax initiatives] fail in liberal communities, places where you would expect them to pass, because of some outside issue. People are mad at the city council, or someone on the council did something wrong. A lot of things can come into play.”
Russo agreed, saying he tried when he was on the Oakland City Council – he served from 1995 to 2000 – to get more money for public works projects, but usually failed.
“I fought those battles and lost because there was always some program that was going to save the world that had to be funded,” Russo said. “So it would get funded and all that would happen is it would create more bureaucracy. And the roads in Oakland are still terrible. Go drive them and you’ll see.”
