Carson Mayor Jim Dear and Councilman Elito Santarina hosted a meeting tonight to discuss the pressing matter of whose taxes ought to be raised and by how much in order to close a gaping deficit.
The proposal on the table is for a 25-cent-per-square-foot business tax that would be imposed on warehouses and manufacturers, plus a 10% ticket tax at the Home Depot Center. The three-member council majority appears to support putting both on the ballot in March, though Dear, the business community, and even the city staff all seem to think that's a really bad idea.
At tonight's meeting, City Manager Jerry Groomes made one last pitch for imposing a 2% utility tax instead. From his perspective, the idea has several advantages: 1) it is easy to administer; 2) it spreads the pain across the entire community; 3) most surrounding cities have a higher utility tax, meaning Carson would not be at a competitive disadvantage; 4) businesses seem to support it, even though they would pay 80% of it; and 5) it would bring in $10 million a year -- more than enough to close the deficit. The only drawback, unfortunately, appears to be a deal-breaker: the residents hate the idea.
In fact, before Groomes even gets to the point of having to convince residents, he'll have to convince his own City Council. Dear promised voters during the recent recall campaign that he would never support a utility tax. After tonight's meeting, he said he is opposed to all new taxes in light of the current economic climate. Santarina, who will be running against Dear in the March election, seems to be in favor of taxing businesses, but draws the line at taxing residents. With an election pending, and in a climate of unremitting factional warfare, nobody is in a position to be brave.
That leaves the options on the table: the warehouse tax and the ticket tax. Both have the advantage of majority support on the council, and residents (who don't have to pay them) might be willing to vote for them in March. But because Groomes thinks they're bad ideas -- especially the warehouse tax -- his staff hasn't done much work to craft a thoughtful proposal, and time is running out before the Dec. 5 ballot deadline.
At this late date, the staff doesn't know how many businesses would have to pay the tax or how much money it would raise. Therefore they don't know where to set the rate. They admit they are guessing. If such a tax were to get on the ballot, it would likely need a 2/3 majority to pass, making it especially vulnerable to defeat against a well-funded opposition campaign.
If the city can't raise any new revenues, another option would be to initiate some serious layoffs. But in the past the council has been unwilling to cross AFSCME District Council 36, which represents the bulk of the city's employees and is an active campaign contributor.
The easiest option, politically, would be to keep funding deficits out of reserves. Given the political climate, that may also be the likeliest outcome.
The council will take up this whole thing again at 6 p.m. Tuesday, in council chambers at City Hall.
The proposal on the table is for a 25-cent-per-square-foot business tax that would be imposed on warehouses and manufacturers, plus a 10% ticket tax at the Home Depot Center. The three-member council majority appears to support putting both on the ballot in March, though Dear, the business community, and even the city staff all seem to think that's a really bad idea.
At tonight's meeting, City Manager Jerry Groomes made one last pitch for imposing a 2% utility tax instead. From his perspective, the idea has several advantages: 1) it is easy to administer; 2) it spreads the pain across the entire community; 3) most surrounding cities have a higher utility tax, meaning Carson would not be at a competitive disadvantage; 4) businesses seem to support it, even though they would pay 80% of it; and 5) it would bring in $10 million a year -- more than enough to close the deficit. The only drawback, unfortunately, appears to be a deal-breaker: the residents hate the idea.
In fact, before Groomes even gets to the point of having to convince residents, he'll have to convince his own City Council. Dear promised voters during the recent recall campaign that he would never support a utility tax. After tonight's meeting, he said he is opposed to all new taxes in light of the current economic climate. Santarina, who will be running against Dear in the March election, seems to be in favor of taxing businesses, but draws the line at taxing residents. With an election pending, and in a climate of unremitting factional warfare, nobody is in a position to be brave.
That leaves the options on the table: the warehouse tax and the ticket tax. Both have the advantage of majority support on the council, and residents (who don't have to pay them) might be willing to vote for them in March. But because Groomes thinks they're bad ideas -- especially the warehouse tax -- his staff hasn't done much work to craft a thoughtful proposal, and time is running out before the Dec. 5 ballot deadline.
At this late date, the staff doesn't know how many businesses would have to pay the tax or how much money it would raise. Therefore they don't know where to set the rate. They admit they are guessing. If such a tax were to get on the ballot, it would likely need a 2/3 majority to pass, making it especially vulnerable to defeat against a well-funded opposition campaign.
If the city can't raise any new revenues, another option would be to initiate some serious layoffs. But in the past the council has been unwilling to cross AFSCME District Council 36, which represents the bulk of the city's employees and is an active campaign contributor.
The easiest option, politically, would be to keep funding deficits out of reserves. Given the political climate, that may also be the likeliest outcome.
The council will take up this whole thing again at 6 p.m. Tuesday, in council chambers at City Hall.
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