A couple years back the Harry Potter phenomenon entered our household once again as my youngest discovered the magic of Hogwarts. The “Potter fever” culminated with the purchase of an over-priced magic wand during a trip to Universal Studios.
I know what you are thinking, the youngest is usually a bit more indulged, and it was true in this case when I found out the price of the wand, and wondered if my wife wanted us to go the poor house buying souvenirs. I have to admit, I tried it a few times, especially with my own generating revenue spells like -pecunicus, denaricus, and argenticus. Well nothing happened and I was reminded of the life counsel from my Great Depression era parents – There is No Free Lunch – in the world.
Recently, a tax measure ballot initiative was presented to the council. We were asked to put on the November 2020 ballot a measure for a one cent sales tax increase. It failed by a vote of 3-1. We needed 4 votes. It was put on the council agenda after two surveys strongly showed the voters would support it. One of the surveys was done during June which was a COVID 19 high point. This measure would have addressed several revenue shortfalls the city was facing. One was for public safety; another would address delayed infrastructure repairs, and another was to address the CALPERs retirement shortfall. There were some other smaller issues but you get the idea. We are short the revenue we need. Normally, when someone hears that they like to say – well just cut the fat from fill-in-the-blank and avoid the tax increase. Like I’ve said many times, when someone offers you a simple solution to a complex problem, they are probably lacking the full story.
Well, as you might have guessed, there is no fill-in-the-blank fat to cut. The city is already operating very lean. When you look at Escondido in comparison to its San Diego County neighbor cities, one might argue too lean. And that is demonstratable. It’s not a platitude. And the one cent sales tax was not a Tax and Spend scheme. It was a long-term solution to a development strategy that did not provide for infrastructure maintenance and city services over the long haul. Many cities have things like CFDs and Mello Roos to pay for things, and don’t have to increase their sales tax to keep the ship afloat. For better or worse Escondido did not choose that route until very recently. So, as they say, it is time to pay the piper. I hate to say it but there really is no free lunch. Things cost money and if you want a certain quality of life, the money has to come from somewhere.
For the record, I don’t like to pay any more taxes than anybody else. Actually, I don’t know anybody who does. And I’m totally fine with executing the will of the voters. But until we know what the voters want, as the mayor, I will offer what I think is the best direction for the city.
We are faced with an 18-year run where the general fund will be short $5-10 million a year and that is in today’s money. I would argue that if you are already barebones, which we are, the only thing left to make up that shortfall is to cut services and personnel. What does that mean in practical terms? As an example, when I first came aboard the city was $8 million behind in infrastructure repairs. One of the favorites is potholes. Thanks to a hard-working city staff, it was reduced to $7 million. Well that number is not going to drop with less revenue. It is going to go up. Without revenue, the city services at current levels will be reduced. And this is not a linear problem. It is exponential. It will cost a lot more to catch up than it will to maintain.
Now, one might say, I’m willing to live in a reduced budget environment, don’t increase my taxes. But we need to remember that there are second and third order effects to that decision. One of them is maintaining a city environment that would attract families to live and businesses to invest. The question for all of us is can we do that? I would argue the answer is no. As the city appearance loses some of its luster, and the services decline, it is only natural for families and businesses seeking a home to choose some other place.
As you can tell, I’m worried. This is not one of those it happens overnight things. It is one of those things that is slow and nuanced, and is noticed by the Escondidan who has been away for a while, and when they return asks what happened.
Now I want to finish with some hope. The team we have at the city staff are fighters and love this city. They will work very hard to keep the city strong. We have a lot of initiatives (irons in the fire) to increase revenue outside of a sales tax. But in candor they will take time to develop.
This ballot idea will probably come up again in two years. It is a community decision. Please let your elected officials know you want to make that decision.