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Local News

Goleta Council, Chamber of Commerce Push for End to Revenue Neutrality Agreement

Councilman Jim Farr says the $5 million the city pays to Santa Barbara County every year amounts to 'double dipping'

A newly formed citizen coalition and the Goleta Valley Chamber of Commerce are calling for more political pressure over the City of Goleta’s revenue neutrality agreement with Santa Barbara County.

City voters approved incorporation in 2001, and with it, never-ending payments to the county of half the city’s property taxes and 30 percent of its sales tax.

At a chamber event Wednesday, Goleta Councilman Jim Farr and Chamber of Commerce President/CEO Kristen Miller detailed the city’s payments to the county — about $85 million so far — and why they believe it needs to end.

The chamber released a consultant report on the revenue neutrality agreement in 2008 and re-released it this month, comparing Goleta’s agreement to other new California cities.

No other agreement goes on in perpetuity, and most other cities have payments based on a fixed amount, not a percentage, Miller said.

“The main thing we are bitter about is this,” she said, pointing to a graph showing the payment projection over time. “It goes up, and it goes on forever.”

Goleta paid about 34 percent of its general fund revenue to the county in the first 10 years, due to the agreement, according to the consultant report. The other 14 cities that incorporated since the revenue neutrality laws were adopted pay, on average, 6 percent of their general fund revenue. Other cities have end-dates to their agreements, the longest being 25 years.

After 12 years of existence, Goleta is “starting to dream a little” about what it could do with the $5 million per year it pays to the county, she said. That money is in addition to the mandated money every city pays to the county.

Farr called it “double dipping” in the city’s revenues. He was active in the GoletaNow! cityhood movement and said that at the time, the general sentiment was to take cityhood and deal with the agreement later. Three prior attempts had failed, and if supporters wanted cityhood, they had to take the “poison apple,” he said.

The agreement was tied to incorporation approval with Measure H, which made all city voters “complicit” in a way, Farr said.

Ballot arguments warned voters about the ongoing payment commitment, saying the city would pay almost $100 million in the first 10 years. Measure H passed with 57.97 percent of the vote in November 2001.

The city never exercised its right to readdress the agreement within the first five years, and recent attempts at negotiation haven’t changed anything. The county did forgive a $1.5 million startup loan, but last year’s meetings with the county were “window dressing,” Farr said.

“Goleta’s future is always going to be less bright if we don’t get this money back,” he said.

Miller urged the group at Wednesday’s event to educate people and put political pressure on candidates to the county Board of Supervisors to support ending the agreement.

The citizens group includes many influential business and community leaders, including Mayor Michael Bennett, developer Michael Towbes, FLIR founder Jim Knight and Camino Real Marketplace developer Mark Linehan. Their website tells people to speak with county supervisors and “tell them to treat the taxpayers of Goleta fairly and get rid of the RNA.”

Noozhawk staff writer Giana Magnoli can be reached at .(JavaScript must be enabled to view this email address). Follow Noozhawk on Twitter: @noozhawk, @NoozhawkNews and @NoozhawkBiz. Connect with Noozhawk on Facebook.

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