If you read the Davis Enterprise's Wednesday addition you would have seen a small and scant article depicting the discussion from Tuesday Night on the City's Budget. This article glossed over some very serious concerns with the city's fiscal situation to paint a fairly rosy picture. The picture fails to inform the public of the magnitude of the fiscal problems facing the city or the fact that the city council majority's plan to deal with these problems is in essence their own version of tax and spend while at the same time they ignore serious structural problems with the current budget.
City Finance Director Paul Navazio is recommending that the city consider three separate tax increases.
First he wants a public safety tax on the ballot sometime in 2009. Now City Councilmember Stephen Souza wants that on the ballot by November 2008 and made an impassioned plea as to why we need to fund police and fire immediately, however, that did not seem feasible to Mr. Navazio .
Second, Mr. Navazio wants a new sales tax on the ballot--asking for a renewal of the sales tax and an additional quarter-cent increase to pay for street and road maintenance. This would be placed before the voters in 2010.
Finally he wants to replace the parks tax with an increase in the municipal services tax in June of 2011.
So, the Davis voters will be looking at three new taxes over the next four years.
Mayor Sue Greenwald warned that seniors and others on fixed incomes are already stressed by the sales tax system, this increase could potentially put them at risk while really not adding much in additional revenue to the city.
However the most alarming statement came from Councilmember Don Saylor who proclaimed the end of the structural deficit.
The bottom line is that we really have not even dealt with the issue of a structural deficit.
According to Mayor Sue Greenwald
We have also not begun to account our unfunded liability which would take $4.2 million a year to pay off.
The 800 pound gorilla, according to the Mayor, is the combined water and sewer capital improvement costs; current projections place costs around $335 million. What this means is that the tax increases in the next four years being proposed by council will be in a way dwarfed by the "fee" increases we will have to pay over the next 20 years in order to simultaneously expend money on a new water supply system and a sewer capital improvement system.
As one councilmember explained to me, we have not even really dealt with the structural deficit that is really looming--that of unfunded mandates in terms of employee retirement pensions. These are not even included on the books. So to suggest that we have solved our structural deficit is very misleading. We have not even touched on the real problems.
All of these tax increases are basically what is necessary to maintain current level of service with perhaps a small increase in police and fire with the public safety tax. None of these will deal with the ballooning entitlements we are handing out to city employees upon retirement. These are lifetime benefits that we are handing out and they are right now not even on the books. That does not mean that the problem is gone. It is simply a matter that this council is trying to get reelected and push off this problem to future councils and future generations.
To me that is the heart of fiscal irresponsibility. And, when the city's budget director says:
---Doug Paul Davis reporting
City Finance Director Paul Navazio is recommending that the city consider three separate tax increases.
First he wants a public safety tax on the ballot sometime in 2009. Now City Councilmember Stephen Souza wants that on the ballot by November 2008 and made an impassioned plea as to why we need to fund police and fire immediately, however, that did not seem feasible to Mr. Navazio .
Second, Mr. Navazio wants a new sales tax on the ballot--asking for a renewal of the sales tax and an additional quarter-cent increase to pay for street and road maintenance. This would be placed before the voters in 2010.
Finally he wants to replace the parks tax with an increase in the municipal services tax in June of 2011.
So, the Davis voters will be looking at three new taxes over the next four years.
Mayor Sue Greenwald warned that seniors and others on fixed incomes are already stressed by the sales tax system, this increase could potentially put them at risk while really not adding much in additional revenue to the city.
However the most alarming statement came from Councilmember Don Saylor who proclaimed the end of the structural deficit.
"Today we really can look at the structural deficit as we refer to so often as something within our grasp. The numbers are so small that they will be taken care of by small increases in the economic development plans that are already underway."Councilmember Lamar Heystek remains very concerned about the structural deficit and is reluctant to support new taxes without a demonstration up front that we have improved things with current funds before we ask for additional funds.
The bottom line is that we really have not even dealt with the issue of a structural deficit.
According to Mayor Sue Greenwald
"We have a structural deficit, we haven't really done anything to improve it, we've just changed our accounting principals, made them less conservative. But that also means it's going to be more sensitive to downturns in the real estate market and other potentially recessionary phenomena."In fact the problem is far worse than that. She continued:
"We have not only not reduced it [structural deficit] but we've also made ourselves more vulnerable to our PERS contributions."If a problem occurs our payments may go up greatly increasing our structural deficit
We have also not begun to account our unfunded liability which would take $4.2 million a year to pay off.
The 800 pound gorilla, according to the Mayor, is the combined water and sewer capital improvement costs; current projections place costs around $335 million. What this means is that the tax increases in the next four years being proposed by council will be in a way dwarfed by the "fee" increases we will have to pay over the next 20 years in order to simultaneously expend money on a new water supply system and a sewer capital improvement system.
As one councilmember explained to me, we have not even really dealt with the structural deficit that is really looming--that of unfunded mandates in terms of employee retirement pensions. These are not even included on the books. So to suggest that we have solved our structural deficit is very misleading. We have not even touched on the real problems.
All of these tax increases are basically what is necessary to maintain current level of service with perhaps a small increase in police and fire with the public safety tax. None of these will deal with the ballooning entitlements we are handing out to city employees upon retirement. These are lifetime benefits that we are handing out and they are right now not even on the books. That does not mean that the problem is gone. It is simply a matter that this council is trying to get reelected and push off this problem to future councils and future generations.
To me that is the heart of fiscal irresponsibility. And, when the city's budget director says:
"Our revenue and expenditures are getting pretty well balanced."And when the city's only newspaper agrees with it and does not dispute that information:
"The city has slowly and diligently chipped away at that budget gap, bringing its spending plan more stability and reliability."We are not being well-served and we are really not aware of the burdens that are headed our way down the road.
---Doug Paul Davis reporting
