City of Santa Barbara officials want to consider a sales tax increase for November’s ballot and will propose polling company options to the City Council within a month, according to City Administrator Jim Armstrong.
“We’re talking to you about new revenues, not because the city’s facing a crisis,” he told the council at a special workshop Wednesday morning.
No action was taken at the meeting, but at least four council members expressed support for doing some voter support polling.
“We can deliver you a balanced budget every year without a new revenue source, but there are a lot of needs that we and the council have identified,” Armstrong said, “and we don’t see a way to deal with those needs unless we find a new revenue source.”
The city has $441 million in unfunded capital needs projects — including an estimated $216 million for streets maintenance and $54.5 million for a replacement police station — and a huge shortfall in pension funding. Last year, Finance Director Bob Samario said the city has $267 million in unfunded pension liability because of low investment returns and many benefit enhancements in the past decade.
The city also has cut down on routine and deferred maintenance, especially to parks.
Council members were most receptive to either a general or specific sales tax increase. A general tax measure would need majority approval, and a special sales tax measure would require a two-thirds approval by voters to pass.
One option, according to City Attorney Steve Wiley, is to have a general sales tax measure and an advisory measure to specify what the revenues would be used for, adding that the advisory measure isn’t binding for the City Council, even if it’s approved by voters.
If the council wants to place a measure on the November ballot, it needs two-thirds approval by council members — five of seven members — and to do so by July. The council would have to unanimously approve putting a measure on the ballot in 2014 or any other non-city election year.
“Really, we’re looking at a sales tax measure if anything,” Mayor Helene Schneider said.
“I do think we need a kick-start of some kind to turn the corner and not let these deferring costs get away from us even further,” Councilman Bendy White said.
Councilman Dale Francisco said the city needs to find a better way of funding itself, not keep increasing tax rates.
“My feeling is the state in general is going to have to find ways of funding operations besides continuing to raise taxes on people,” he said. “The danger that I see with an improving economy is that we go back to the old ways of funding things.”
Councilman Randy Rowse said: “We can make decisions and have intents, but our ability to control future council decision-making on any given Tuesday is small.”
During public comment, local attorney Jim Smith said the city needs to find another option to balance its budget. Santa Barbara is facing hundreds of millions of dollars in unfunded long-term debt, so raising taxes to bring in another $10 million won’t be the fix, he said.
The city should outsource some of its services to private industry as some other cities have done to cut back on pension and benefit costs, he said.
“You can load up the taxpayers with another tax, which is going to treat the symptom and not the problem, and is going to kick the can down the road,” Smith said. “The other thing you can do is implement meaningful change.”