Sales Tax to Go Up Again; Same for City Employee Salaries, Perks, and Pensions

by Bonnie Donovan

Are you missing those monies from the oil companies, yet?

The City of Santa Barbara is facing a budget shortfall of $7.1 million this year and even more in the next few years. City officials are advocating for another sales tax increase to 9.25% in hopes, they say, of preventing further cuts to “essential” services.

Should the sales tax increase receive approval, it will be implemented on April 1, 2025, with the generated revenue allocated to the general fund. While the list of priorities has been established, the actual distribution of funds will be determined by the council's decisions during the annual budget cycle. 

The growth in salaries, pensions, and retirement plans, has plunged our state, county, and city into significant financial trouble, and once again, it’s the taxpayers who will bear the burden.

I’ve submitted a Public Records Act Request (PRAR) for the last five years of CALPERS bills to illustrate where the city’s funds are allocated and why they’re seeking an additional half-cent sales tax from us.

A reevaluation of how public services are managed is probably necessary, considering the financial pressure caused by union obligations. Perhaps it’s time to consider converting more departments to private contractors to avoid the financial burden of union obligations, except for essential services like police and fire. 

Approximately a decade ago, four members on the City Council proposed the idea of outsourcing the management and maintenance of our municipal golf course to a private company. This decision has proven successful, as evidenced by the funds allocated for upgrades in the upcoming budget session. It's essential to consider how much money we've saved through this change. Some council members opposed the idea, prioritizing the protection of union jobs over the course's upkeep.

In the fiscal year 2023, Measure C allocated an additional half a million dollars to the promenade, which adds to my initial PRAR of over $3 million. Perhaps it's time to consider another PRAR to reflect our updated total funding.

When and Where Do Regular Tax Increases End?

As city staff and council members propose yet another tax increase, it's crucial for residents to stay alert. While I supported the modernization of our police department through Measure C, the ongoing promotion of specific agendas by certain candidates raises concerns.

At what point do we say enough is enough?

It has been just six years since the implementation of Measure C, which introduced a one-percent sales tax increase intended for infrastructure repairs, maintenance, and improvements. However, there are concerns that the funds are being rapidly depleted without achieving the intended goals.

A thorough examination of the report is essential to understand the allocation of Measure C funds. It is important to note that the 1% tax is designated for capital projects rather than operational expenses. Despite attempts to label it as a “discretionary” fund, the priorities established by voters clearly indicate that the primary focus should be on paving streets and enhancing the police station, with additional capital needs such as parking lot maintenance also being considered.

During previous budget discussions, Council member Kristen Sneddon attempted to label it as a slush fund, but that notion was quickly dismissed.

Threatened Cuts to Things We Need and Love

The discussion around housing has emerged, particularly regarding its role in supporting the Affordable Housing Trust Fund. However, due to the general nature of the tax, only a small portion will contribute to this fund. The pressing need lies in operational funding, as cuts to library hours, parks and recreation programs, and basic maintenance are often the first to occur. The ongoing fiscal challenges are exemplified by the situation on State Street, where significant financial resources have been wasted over the past five years.

In November 2000, Santa Barbara residents voted in favor of Measure B, which raised the transient occupancy tax from 10% to 12%. The additional 2% tax revenue is specifically allocated for the Creeks Restoration and Water Quality Improvement Division, ensuring that funds are directed towards enhancing local waterways and their ecosystems.

Following the approval of Measure B, voters also supported Measure C in November 2017, and now, six years later, there are calls for further increases. This raises a critical question about the sustainability of funding and whether the community's needs are being adequately met, prompting discussions about the balance between necessary improvements and the potential for overreach in tax increases.

The question needs to be asked whether payroll and pensions are draining the general fund that should otherwise be funding these improvements.

Individuals face a variety of taxes, including income tax, gasoline tax, and sales tax on purchases, in addition to property taxes. Furthermore, there are numerous charges referred to as fees. This terminology stems from the passage of Proposition 13 in 1978, which many believe solely addressed property taxes, but has extended well beyond that.

Measure I Just Another Prop 13 Go-Around

Proposition 13 established that the government could not increase taxes without public approval through a vote. As a result, many charges are now labeled “fees” to circumvent this requirement. For instance, fees associated with the Department of Motor Vehicles have risen significantly, contrasting with the previous trend of vehicle registration costs decreasing as vehicles aged.

Additionally, utility costs, and various other services have adopted this fee structure, contributing to the overall financial burden on residents. The evolution of these charges reflects a broader trend in government financing, in which traditional taxes are supplemented by fees that may not require direct voter approval

Review the spending details of Measure C for the fiscal year. It covers areas like parks, libraries, housing, and homelessness, and a little allocated for fire station

Measure I is set to allocate funds towards parks, library, housing, homeless, and emergency services that may lead to increased costs in multiple areas. 

Since this money goes into the general fund, it could also be used to contribute to pension expenses.

The City of Santa Barbara is optimistic that a proposed half-cent sales tax increase will generate $15.6 million each year. This measure is set to appear on the ballot for the upcoming election on November 5. During a recent City Council meeting, members discussed how the funds could be allocated to various essential services.

The council unanimously approved a comprehensive list of priorities that the additional revenue would support. Key areas of focus include ensuring emergency services, contributing to the Local Housing Trust Fund, enhancing housing affordability, and tackling homelessness. The plan also emphasizes the importance of keeping fire stations operational, maintaining library services, and ensuring public spaces and parks remain safe and well-kept.

 As I see it, Measure I is simply one more in a long line of additional tax increases, with no end in sight. When faced with overwhelming challenges, however, it is essential to reconsider and alter the approach rather than repeating ineffective strategies.

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