Opinion: The progressive case for voting no on Sacramento’s Measure U

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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October 13, 2012 | 6:45 PM

“A better option would have been a revenue increase targeted for police and fire, and other city priorites [sic].”

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.

October 14, 2012 | 8:46 AM

Thanks for your comments. They are insightful but I can’t agree with several of them.

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.

Article Author
October 14, 2012 | 11:01 PM

But you were championing two tax options that aren’t on the ballot – one for police and one for fire – and BOTH were based on sales tax increases (I just read the document at the link you posted – thanks for undermining yourself so conveniently). That makes no sense in the context of an opinion piece that’s criticizing sales taxes as being too regressive. Yes, there were other tax proposals in that survey that weren’t sales tax based, but they aren’t the ones you were championing after the fact.

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.

October 14, 2012 | 11:09 PM

In short, for anybody who bothers to pay attention to your argument it boils down to “I don’t like Measure U because it doesn’t funnel revenue increases exclusively towards police and fire services.”

October 15, 2012 | 8:21 AM

Assuming we can keep it civil, it would be great to have both of you a chat to discuss/debate Measure U.

October 15, 2012 | 9:00 AM

Actually, Tony, there’s no where in the above where I’m championing a sales tax increase for police and fire as you suggest that I do. I called for a “targeted revenue increase.” Charter cities have other options besides sales taxes — but they require a 2/3 vote. The poll actually included parcel taxes as an option for parks, not for police and fire. As Measure U is written it can be used for “ANY municipal purpose.” I don’t support sales taxes in general because of their regressive nature, but am pragmatic enough to understand we can’t repeal the sales taxes we already have. Adding insult to injury with another regressive tax increase is what my concern is about. And the bottom line here is that the City Council, which can’t balance its own budget, is asking more money from low- and middle-income families who are having a hard time balancing theirs.

Article Author
October 15, 2012 | 3:27 PM

The proposals targeting police and fire were both based on sales taxes. A parcel tax (as was suggested for parks, not police and fire) is also regressive and likely to be more painful for some than a sales tax as it’s less incremental in its application. But if you’re maxed out on your ability to pay for your home (as many are – or worse), a parcel tax could topple you over the edge. And if landlords are charged based on residential units, then it gets passed on as a rent increase.

October 13, 2012 | 8:46 PM

Great points Steve, except you’re a day late and a dollar short.

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.

October 14, 2012 | 8:49 AM

I’m not writing this as the Mayor’s former campaign manager; I’m writing this as my own opinion. For what it’s worth, the regressive tax argument was a component of what was belatedly submitted a few hours past the deadline that the City Clerk refused to publish in the official ballot argument.

Article Author
October 15, 2012 | 11:05 AM

Nobody is buying KJ’s “dog ate my homework – the sun was in my eyes” argument.

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.

October 15, 2012 | 11:12 AM

If you want to attack the Mayor, you certainly are welcome to it. Lord knows you’ve had enough practice. And as usual, you don’t let the facts get in the way of the it either.

As the credit indicates, these are my personal views and have nothing to do with the Mayor.

Article Author
October 13, 2012 | 8:58 PM

Rose ville, west sac and county areas are going to get more business on major purchases. Raising taxes may lower revenue cause people dont have to purchase items in the city of sacramento. City council spends spends spends and instead of watching what they spend they revamp K Street or want to give away 50 years of parking revenue for an expensive downtown Arena. Oops they are running low on the general fund. Must cut fire police and city services. Meanwhile my city water, sewer and smud rates have raised dramatically. Sadly the voters may believe the lie and pass this tax. No on U.

October 13, 2012 | 10:45 PM

Who would vote for measure when the main group supporting it (the fire union) is breaking the law by plastering their signs on properties without the owners permission. It is ironic the firefighters union has taken such a public position on Measure U, since it their pensions and refusal to reform work practices that is bankrupting Sacramento and making the measure necessary.

October 14, 2012 | 11:19 AM

Well, your points about engine crews and ambulance no with standing….at least fire is stepping up to the plate on the pension issue.

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.

October 14, 2012 | 3:04 AM

You wrote, “A better option would have been a revenue increase targeted for police and fire… even though their own poll showed…78 percent of voters indicating they supported a “special purpose” tax for fire, and 76 percent favored it for police.” WHAT Poll Steve? Can you provide a link? I’d love to learn more about that poll. Heck, I recall attending meetings towards a previous proposed sales tax where the poll showed voters did not support sales tax for police; so law enforcement joined on to work with faith base, community based organizations so the proposed sales tax would be considered. Law enforcement already has the budget monopolized and now grants whereas community organizations can’t get grants unless they work with law enforcement. They aren’t doing it because they thought it was useful in reducing gang/youth violence they are collaborating with law enforcement to get MONEY/ grants. In fact that is the reason some will consider the sale tax because it could open funding for their CBO if they support a-deterrent-not-a- solution-sales tax for law enforcement. And who the heck orchestrated the poll you made reference to Steve?? Also, the low income community can’t support retail because we’re too busy paying court fees, fines, restitutions, reimbursement, work project…….

October 14, 2012 | 8:36 AM

The link is imbedded in the article above; click the words “political poll.”

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.

Article Author
October 14, 2012 | 11:12 AM

Sorry Steve, while apparently we will both be voting “NO” On Measure U it will be for different philosophical and fiscal realities.

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%.

October 14, 2012 | 12:15 PM

Sales taxes are inherently regressive, and in my view, that’s a good reason to vote No on Measure U. Cash-strapped Sacramentans are already coping with higher fuel and food prices, increasing the sales tax could hurt them more than it helps.

Anonymous
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October 14, 2012 | 5:38 PM

“The $28 million in additional revenue … can be put toward anything that the city council wants, whether it be arena studies or pay increases for city management.”

You’re cracking me up. Now you’re a champion fighting against wasteful spending related to the failed arena? Ha Ha Ha.

October 15, 2012 | 9:03 AM

Well “Doubtful” perhaps if you actually read what I wrote you’d understand that I’m saying that the revenues raised from raising this sales tax could go for any municipal purpose — whether its an arena study or pay increases.

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.

Article Author
October 15, 2012 | 10:12 AM

Hey Doubtful. We appreciate your interest in The Sacramento Press – just a reminder that we do not allow personal attacks. However, I think we can all agree that informed and civilized debate is absolutely awesome.

October 15, 2012 | 11:08 AM

Yeah, Doubtful. In the future let’s restrain ourselves to just a single “Ha”. Mmm-kay?

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