Pleasant Hill Measure K is a half-cent general purpose sales tax expected to generate $4 million a year for 20 years. Supporters say the tax is intended to repair streets and build a new library. In fact, Measure K is designed to provide relief for the city’s operating budget.
In a recent column in the Pleasant Hill Record, Mayor Sue Noack says Measure K “money will not be used for employee salaries and benefits” because the City’s Long Term Financial Plan identifies “sufficient revenue to meet its obligations with respect to employee salaries and benefits." This statement leaves out key facts.
The City’s Long Term Financial Plan (LTFP) shows Pleasant Hill ran a budget deficit for 6 of the past 10 years. The LTFP shows that city revenues fluctuate, reflecting the ups and downs of the economy, while its labor costs steadily grow. (This latter fact is hidden by the City’s sleight-of-hand practice of holding positions vacant to produce artificial budget “savings” to improve the bottom line.)
Voters are reminded that, when the next economic recession hits California, all bets are off. Measure K, a general purpose tax, can be used to meet the City’s obligations -- including labor costs that represent 70% of the city budget.
Economists anticipate the next California recession will hit by 2019-20. A raid of Measure K’s piggy bank would likely occur long before library construction begins.
Mayor Noack tries to rewrite history by blaming deteriorating streets on the loss of state redevelopment money. Redevelopment has nothing to do with years of infrastructure neglect.
At a September 2013 City Council goals workshop, the City Engineer said deferred maintenance was a “huge issue” and the City had a “chronic funding problem” maintaining streets, storm drains and other infrastructure. For years the City had budgeted only about a third the amount necessary for maintenance. He characterized the maintenance budget as “perennially underfunded.”
In truth, City maintenance cutbacks began years before 2011, when state redevelopment ended.
Mayor Noack says a new library would cost about $600 per square foot, or roughly $15-20 million. This is a guesstimate. The City owns no land for a new library, nor does it have specific plans or preliminary construction cost estimates. In addition, the City ignores an essential long-term budget question: how to fund ongoing maintenance costs for a new library facility.
These are among the issues fueling concern that Measure K may not deliver what it promises.
The Mayor states “the City could finance the library upfront.” She says a sales tax is better than a bond because shoppers and visitors help pay the cost. But she fails to add that sales tax financing is considerably more expensive than bonds. Because sales tax revenues fluctuate, sales tax borrowing is more risky, thus more costly.
Pleasant Hill chose to ask voters to approve a general purpose sales tax, which gives the City maximum spending flexibility.
Arguably a bond issue is a more suitable way to fund new construction. A new library would improve property values, so homeowners would benefit. Bond financing is cheaper, so residents could save money. Further, bond spending would be dedicated exclusively to the project. This would reassure residents that a new library would be built.
To repair its streets, Pleasant Hill could have pursued a specific sales tax. This is what the City of Martinez has proposed with Measure D. Unlike a general purpose tax like Measure K, Measure D revenues are legally restricted. Measure D money can only be used for the stated purpose: road repair.
The Yes on K slogan “safe streets, new library” sounds good, but glosses over important details. Pleasant Hill residents should recognize Measure K for what it is: a blank check we’ll pay for decades to come.