Internal View of Mace Ranch Innovation Center
It is that time in the election cycle, and the Davis City Council is very shortly going to be figuring ways to raise revenue. It may well be multiple measures. The Transient Occupancy Tax (TOT) may only raise about $300,000 at present, but, as Councilmember Lucas Frerichs told the Vanguard, that’s a nice sum of money for a tax that will not impact local residents.
We may also get a parcel tax that deals with either parks or all infrastructure, depending on the size.
I think we made a mistake last month putting the soda tax in with other revenue measures, as I do not see the soda tax as a way to fund existing city needs but rather a way to create programs to deal with vexing issues like childhood obesity and diabetes.
Overall, I think this is a good time to take stock of where we stand. Since about 2008, actually even before the great recession hit, the Vanguard warned the community that our compensation system was unsustainable. Since then and really since July of 2010, the council has been doing a much better job of trying to deal with city finances.
But the fundamentals of the system remain troubling, even as the great recession has receded and economic recovery and revenue growth continue. What has happened since 2008 is that we have cut around 100 employees – most of them through attrition. We have cut back on city services. We have cut take-home pay – in some cases substantially.
However, we pay more per employee today than we did in 2008 and that is largely a function of the fact that our compensation system is unsustainable.
In short, we are paying more for fewer employees and receiving less in the way of city services. Our employees are working harder, taking home less pay, and yet we are paying more for them.
The bottom line is that we are still about $10 million in the hole annually on city infrastructure and, without short-term ways to finance it, our buildings, roads, sidewalks, pools, parks and greenbelts will continue to deteriorate. In short, the great amenities that many of us have come to expect are threatened without funding.
Councilmember Brett Lee may have told the Enterprise this week he’s “not sure” if he will support a tax measure, but it is safe to say that a tax measure is coming.
No sooner does a tax measure get bandied about, but the anti-tax crusaders start to poke their heads out of civic hibernation. Thomas Randall the other day, in a comment on the Enterprise site, stated, “Its time for a change and for the Davis City Council to move away from constantly placing measures for additional taxes on the ballot from election to election which when they are passed continue to raise the cost of living in the city and the residents financially suffer.”
That sounds good, but where has he been during the discussion on economic development?
The city is looking at ways to diversify its revenue. At this point it is unclear whether Nishi is going to generate ongoing revenue, but the city is looking toward things like the hotel conference center and Mace Ranch Innovation Center (MRIC), among other initiatives, to generate the long-term revenue we need.
But where have Thomas Randall and his often-partner in crime Jose Granda been on these vital discussions that could very well help their cause in stopping the endless cycle of tax measures? I have not seen them at all around these issues.
Instead, we get proclamations, “Unfortunately, the socialistically minded city council members who likely make a high income themselves personally are insensative (sic) to the financial needs of average income Davis residents.”
That is certainly not my sense at all. First of all, none of the councilmembers are wealthy. Some of them make decent livings, but several of them have very modest incomes and come from backgrounds that are even more modest.
I talk to most of them very frequently and there is a real concern that the city needs to find more diverse revenue sources – precisely because they believe that, while the community has been extremely generous with supporting schools and parks and sales tax measures in the past, it is not an endless well that can continue to be tapped.
However, Mr. Randall’s statement, “It is time for a voter revolt in the next election against this situation,” describes something very unlikely in liberal Davis.
If either Mr. Randall or Mr. Granda is interested in reducing the number of tax initiatives, the city and also the school district need more consistent revenue sources that they can tap into.
Economic development seems the most logical way that we can move in such a direction. Mace Ranch Innovation Center was estimated by the EPS study to generate around $2 million in net revenue. Some have argued that this is a conservative estimate.
For one thing, the city had previously discussed a potential $1 to $2 per square foot assessment. That proposal alone could increase revenue by $2.5 to $5 million per year. At some point, MRIC will have the kind of fiscal analysis and scrutiny that Nishi has undergone.
The developers have pushed for a mixed-use component of 850 units of housing. When the Vanguard interviewed Councilmember Frerichs, he said he opposes housing on the MRIC site. Having said that, he noted, “I feel somewhat conflicted on that.” He cited that smart growth principles suggest “mixed use is the way to go.” But he said, “This proposal was brought forward as a strictly commercial R&D proposal without housing.” He added, “I think that housing at that site will actually really hurt its chances for approval.”
What the Vanguard has suggested in the past is that instead of looking to 2.5 million square feet of R&D space, look at a far denser project at 4 million. The thinking there is that most of the initial infrastructure costs are going to be similar, whether it’s 2.5 million or 4 million, but the property tax and potential sales tax and assessment will generate additional revenue for the city.
These are questions the community will undoubtedly have to sort out, but they represent the way forward to avoid the endless tax cycle. Rather than a futile and empty threat of a tax revolt in liberal Davis, why not help plan for the future – a future that could avoid many of these tax measures, if they indeed generate the type of revenues we hope and need?
—David M. Greenwald reporting
The post Sunday Commentary: Why Aren’t Anti-Tax Crusaders Leading the Way on Economic Development? appeared first on Davis Vanguard.
