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Thursday, May 23, 2013
Opinion: The progressive case for voting no on Sacramento's Measure U
by Steven Maviglio, published on October 13, 2012 at 2:06 PM
Storyline: In and Around Sacramento
It is no surprise that anti-tax and chamber-of-commerce types oppose Measure U, the measure to raise sales taxes in the City of Sacramento. Their knee-jerk reaction to raising revenues is predictable. But progressives have plenty of reasons to oppose Measure U as well.
Measure U is a regressive sales tax. That means that poor and middle-income families will pay the same rate as Sacramento’s wealthiest citizens, essentially subsidizing the rich for services that we all receive.
According to Citizens for Tax Justice, since seniors, students and low-income families spend most of their money on essentials, a sales tax hits them the hardest. Measure U will cost these families hundreds of dollars each year and require a larger chunk of their income than it does of our city's wealthiest citizens.
It’s a reverse-Robin Hood policy. And it’s why none of the statewide ballot measures that seek to increase school funding is exclusively a sales-tax hike.
For example, the governor’s proposal (Proposition 30) to funds schools and balance the state budget relies heavily on progressive taxation (where the wealthy pay a higher percentage).
Measure U also will give our city the highest sales tax in the region. It will drive jobs and businesses out of Sacramento and put our city at a competitive disadvantage with neighboring communities. And who will suffer from a decline in retail sales? Low-wage retail employers, students with restaurant jobs, and seniors who try to supplement their Social Security checks with part-time employment.
I would like to think that most of Sacramento’s city council members know this. Most of them are good progressives. They just chose to ignore it.
Instead, they spent $40,000 of taxpayer money on a political poll to tell them which type of tax was the easiest to pass—not which tax was the fairest or would produce the most stable level of revenue for the city. Just the one that would sell at the polls.
Furthermore, this tax increase—which would make Sacramento’s sales tax the highest in the region—does not guarantee more human services, more funding for programs to reduce homelessness or even more community safety from our firefighters and police. The $28 million in additional revenue (which, at best, is a guess, given that retail sales will likely be driven out of the city because of its high tax rate) can be put toward anything that the city council wants, whether it be arena studies or pay increases for city management.
A better option would have been a revenue increase targeted for police and fire, and other city priorites. But the City Council did not go that route because it needed a two-thirds, rather than a majority vote -- even though their own poll showed targeted taxes scoring well above the votes they needed; 78 percent of voters indicating they supported a "special purpose" tax for fire, and 76 percent favored it for police.
That's another reason Sacamento voters should scrap Measure U. It’s time we sent a message to the city council that Sacramento citizens want accountability and fairness in tax policy and budgeting.
Disclosure:
Steven Maviglio is a Democratic political consultant and delegate to the 2008 Democratic convention. The views expressed here are his own as a Sacramento voter.
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You use most of the column to criticize the method of revenue collection and then casually mention an alternative without specifying how revenue might have been collected in such a scenario - how would those targeted taxes have been collected according to those poll questions that gained favorable responses?
Meanwhile, saying this isn't a good Measure based on what might have been better, in your opinion, doesn't help much as at this point in time such alternatives don't exist.
Also, while sales taxes are regressive, it's not really fair to say that a measure like this causes the poor to subsidize the rich or to characterize it as "reverse-Robin Hood." I agree with you on principle about tax increases like this, but these kinds of remarks don't help. Not having the rich subsidize the poor through progressive taxation is not the same as having the poor subsidize the rich. If a poor man and a rich man both eat the same meal and pay the same price, neither has subsidized the other - as compared to the rich man being asked to pay more for his meal to help cover the cost for the poor man.
There are other, better examples of relatively less wealthy people subsidizing relatively wealthier people: For example, single people subsidizing the child raising of richer people with kids, or renters subsidizing the million dollar mortgages of rich folks' second homes. But sales taxes aren't so clear cut - and while you argue against this marginal increase, you don't argue against sales taxes in general, which would be the logical position to take if one is dead set against non-progressive taxation.
The problem for poor people is that they have no cushion to absorb additional expenses. All of their money is spent in most pay periods, whereas rich people can afford not only to pay more but also to save a portion of their income. Increasing the cost of taxable products for the poor simply causes other purchases to be avoided as they're playing a zero sum game - and so a sales tax increase on one item causes a sales tax reduction through reduced sales on another. The relatively rich also have greater flexibility and transportation to spend their money elsewhere, thus avoiding the tax increase.
One could also advocate for specifically progressive sales taxes by taxing items that poor people tend not to buy on a regular basis: New cars, boats, and jewelry, for example. But, again, such a measure isn't on the ballot.
For starters, I'd urge you to read the poll this article links to. The Council City spent taxpayer dollars to explore which revenue options would be most popular, and what political messaging would work to sell them. Targeted revenue taxes that were more progressive were included on the list. However, the City Council proponents of raising taxes believed, as the poll indicates, that the 2/3 vote threshold would have been more difficult to achieve than the majority vote option (raising the sales tax that they ultimately decided on) in a year when there are three tax increase proposals on the statewide ballot. It was a pure political decision -- and low- and middle-income families will be paying the price, as the article notes. Instead of taking a political risk and championing progressive taxes, the City Council proponents took the easier route.
I'd have to disagree that pointing out the flaws of Measure U when there are no other alternatives on the ballot isn't purposeful. Measure U should be able to pass or fail on its own merits. And again, it was the City Council that refused to put any other alternatives on the ballot -- again, because they didn't think they could muster the 2/3 vote.
I'd also quarrel with your statement that sales taxes aren't a clear cut regressive tax. They are. The poor and middle class will pay a larger percentage of their income than our wealthier citizens for city services. And take a look around: poorer communities don't get the same level of services that wealthier parts of the city do.
I didn't say that pointing out the flaws (if that's what you had actually done) wouldn't be purposeful, I said that saying how much better an alternative (that isn't even on the ballot) might have been isn't especially purposeful. But given that your argument was based on regressive taxation when the other two options would also have been based on the same mechanism undercuts all of the purposefulness anyway.
I also understand the math and the reasoning behind the idea that sales taxes are regressive - and they are for the most part. However they are less so if you're barely making ends meet and spending a lot of your income on sales tax exempt food staples. You actually have to have enough money to spend significant amounts on big taxable products to notice such a marginal increase in a big way. By comparison, a payroll tax is the most regressive as you pay it on every dollar you make (at the low end) without being based on how you spend it.
As I said earlier, the argument about sales taxes being regressive is more meaningful if you're arguing in favor of doing away with them entirely than if you're arguing for or against a .25% or .5% increase. Instead, you were arguing in favor of a different sales tax increase, that you happened to prefer, despite being equally regressive. Not much principle there.
At .5%, Measure U will increase costs for a person making $400/week by less than $2/week (because at least some of their spending will be tax exempt). I don't like that despite how small it is - but if your issue was truly to argue against regressive taxation you'd be arguing against sales taxes in general and saving them a lot more by eradicating them. But that's obviously not your real position.
And I'm well aware of what the poorest neighborhoods are like - I live in one of them. I had a trespasser removed from my property who had 44 outstanding warrants. The police officer let him go, rather than waste several hours and assorted resources and resulting in a 45th outstanding warrant and little other outcome. I was burglarized three times and had my homeowners insurance revoked (temporarily). I was cited by the City for a code violation for having a messy yard, despite the fact that the messy yard is an intentional mechanism for making the house look less appealing as a target for further burglaries. The City has enough resources to cite me while I try and protect myself but not enough to protect me so that I don't have to. Such is life.
Meanwhile I'm trying to develop an extreme urban infill project that the City wants - but the permitting will cost more than it would for a McMansion in the suburbs. The City needs more people living, working, and spending within its borders and yet it makes it expensive to achieve that result. If it costs me an extra penny on a two dollar taxable item while we wait for priorities to be re-ordered, so be it.
These points would've had a lot more impact if KJ had the guts to actually put them in the ballot opposition statement, like he promised he would.
Mayor Johnson bowed to union pressure, and made a purposeful and strategic decision to not submit a ballot opposition statement.
I guess having the mayor's political advisor take up the cause again on an obscure corner of the internet is some sort of face-saving tactic to get that phantom opposition captured in print.
As the credit indicates, these are my personal views and have nothing to do with the Mayor.
SPOA is a "NO SHOW" for the second straight year. Continuing to receive their pension contribution on the backs of the laid-off youngest officers and the overall safety of this city.
The poll was authorized and paid for with taxpayer dollars by the City Council to determine which type of revenue raising options would be the most popular, and what the most popular messaging techniques were. In other words, taxpayers subsidized the Yes on U campaign, saving them $40,000 in polling costs.
Your comment: "A better option would have been a revenue increase targeted for police and fire, and other city priorities."
Falls flat on its face in light of the continued arrogance of SPOA. 6 1/2% pay increases over the last 18 months, allowing junior officers to be laid off, diminishing the front line ranks protecting the streets of Sacramento...and yet not contributing one dime to their annual 32% pension contribution.
Current CalPers formula for public safety officers is 9% of that 32%. Almost every other group stepped up to the plate including FIRE 522, not forgetting that 5% raise they will be receiving at the same time they will start making their full 9% contribution as of Jan 1, 2013.
Going back to last year's SacPress article
Guide to salary and benefits for police officers:
http://www.sacramentopress.com/headline/51651/Guide_to_salary_and_benefits_for_police_officers
"Most of the officers in the department earn about $70,000 per year, Leong said."
"On top of the base salary, benefits for police officers include the city’s payments of about $28,000 into CalPERS each year for each officer, Leong said."
The math is pretty simple, $28,000 x 9/32 = $7875 annual employee contribution that the city is paying on top of the $20,125 employer contribution. At that time there were 701 sworn officers equating to at least an additional $5.5 million dollars annually picked up by the city. Of course that $70,000 avg is now 6 1/2 % higher, about $75,000, as are all the other figures and SPOA's contribution is still 0%.
This is still a broken situation that SPOA has, for the second year in a row, walked away from at the expense of city residents, businesses and their lowest officers jobs. That's the bottom-line.
Had SPOA stepped up, acted like mature adults taking on their pension responsibility and allowed their rank and file to actually vote on the proposal, before laying some of them off....we might have seen a different, more palatable proposal.
You avoided all that in your talking points, along with your spokesperson role with
"Californians for Retirement Security"
In the last 4 years, the discretionary portion of the city's budget went from about 72% to 84% for public safety. When is SPOA going to start paying their contribution? Right now it's 9%. Didn't the legislature just pass a pension reform proposal that will ultimately require 50-50 contribution from employers and employees? Most of the city employees are already 90% there. A far cry from 0%.
You're cracking me up. Now you're a champion fighting against wasteful spending related to the failed arena? Ha Ha Ha.
Btw, perhaps you'd have the brass to use your real name and a photo if you're going to insult people that take the time to contribute to sacpress.com.