Joe Azzarito: will the city be borrowing annually the $24,000,000 using realizable tax receipts, along with other general fund monies, to pay for the borrowed funds, both principle and interest? We need to know this!

27 Oct

Regular contributor Joe Azzarito had some thoughts that wouldn’t conform to the Enterprise Record’s format:

Chico citizens are being asked to approve our city council’s decision to increase the rate of sales tax charged on numerous goods and services in this coming November’s election. Known as Proposition H, an add on local sales tax of 1% will, if passed, become law, unless repealed by citizens effective January 1, 2023. This will restate Chico’s sales tax rate and raise the combined tax rate to 8.25% from its current 7.25%.

Proponents of this increase have publicly, through mailers, as well as articles in this paper, argued that the increase is necessary, but more importantly, the only way our streets will be repaved, our citizens’ safety will be ensured and, lastly, housing for both the un-housed and those of limited means will be provided for.

To justify this increase, to remain locally and not shared with the rest of the state, they have released such information that on the surface would seem to justify this increase. They have told us that only a handful of cities, the size of Chico do not have a local sales tax. They have told us that Chico’s General Fund budget is one of the lowest in the state on a per capita basis. They have further told us, that without more revenue, not much can be done with the money it has. They have appealed to our decency, with a promise, but not a commitment, to address these stated needs.

Have they been totally honest with us? By authoring a simple majority proposition, with no sunset clause, they have not. Oh, of course, it is said, by repealing this rate increase in a future election, it can, by defacto, contain a sunset clause. Have you ever known of a tax increase to be temporary?

These are just the tip of the iceberg facts surrounding this proposed increase. There are many more facts, that proponents have conveniently refused to present, in an honest and forthright manner, so that we voters can make a discernible decision. To speak bluntly, proponents have not been entirely transparent. Why? Because, with all the facts, the proposition would be rejected handily. For those old enough to remember radio personality Paul Harvey and his news broadcast, he would end his show with ”the rest of the story” This is precisely what we need – the rest of the story.

Here are some, maybe not all, of the “rest of the story” voters need to hear and understand to be able to make a truly informed decision on this proposal. Without these facts, all we are doing is blindly, unquestioning, agreeing to tax ourselves more without so much as a whimper.

One of these unstated facts is the revenue expected to be received – the additional $24,000,000 each year. Mathematically, it will take $2,400,000,000 (2.4 billion in annual sales) to achieve the above $24 million in extra revenue. Proponents offer a few of the items not taxed as proof of its fairness. Have they told us which items will be taxed? No, they have not! Can it be shown that our city spends $2.4 billion in taxable sales each and every year? I thought our average or median income was near, if not under, $50,000 per year! Even if higher income families are included, can we reach this plateau? Ask yourself!

The next fact that has not been discussed, with honesty, do proponents expect such revenues to come about by encumbering debt with realizable tax receipts as collateral. In other words, will the city be borrowing annually the $24,000,000 using realizable tax receipts, along with other general fund monies to pay for the borrowed funds, both principle and interest. We need to know this!

Another fact to be factored into our collective vote – the reliability, since a promise is not contractual, that infrastructure, safety and housing will in fact be where this fictitious money will be spent . The quietly not discussed “elephant in the room” – the extremely large and growing UAL, known as the unfunded actuarial liability or pensions and other perks of staff could very well siphon off all of any tax receipts. It’s a fact that each year, the city disburses to CALPERS millions of dollars, both in current contributions, as well as catch up ones, for a bloated pension obligation. City staffs pay some, but not nearly enough of their “golden parachute” pension costs. Why should so few, a mere 2-3 thousand, at best, reap fantastic benefits at our expense. It’s truly Robin Hood in Reverse (take from the poor to give to the rich) I have many times brought the issue of “The California Rule” section found in the State’s constitution, wherein it is supposed to state that no benefit accorded state employees be taken away without replacing it with an equal valued one. That seems to be the major stumbling block from abrogating our pension contracts and replacing them with a more reasonable one given current circumstances. This topic, asked by me and others, never gets an honest evaluation. Why is that? If private employers can abrogate their pension obligations, in bad times, why can’t public employers do the same? It’s as if government says, the public be damned, we’ll take care of our own at your expense.

The editor of the local daily asks readers to vote yes on H, because it’s the only viable alternative. I say, NO, it’s not! So much more could be done to release funds for the three stated Third Rail items mentioned above, if only they wanted to. Council is not being entirely honest and forthcoming with us in not presenting ALL OF THE FACTS. LET me end with this pithy statement: NEVER HAS A GOVERNMENT EMPLOYEE BEEN AGAINST RAISING TAXES, AS THAT IS THE SOURCE OF THEIRS, NOT YOUR, INCOME. We need to play hard ball with this government, demand they own up to current, but more importantly past bad decisions, find every possible area in government inappropriate changeable spending and reduce it, abrogate salary contracts to restructure employee contributions, stop raiding every department’s funds to support the UAL, admit to their culpability in deceiving us of real funding sources and ultimately cancel the Proposition H, effectively shooting themselves in the foot. Short of that we, the citizens of Chico must rise to the occasion, educate ourselves, demand true accountability, throw off the yokes of complicity and VOTE NO with our ballots on H. We can do better, if we demand government do better!

Joe Azzarito, Concerned long time resident of Chico, CA

2 Responses to “Joe Azzarito: will the city be borrowing annually the $24,000,000 using realizable tax receipts, along with other general fund monies, to pay for the borrowed funds, both principle and interest? We need to know this!”

  1. Dave October 27, 2022 at 6:56 pm #

    Proponents of this increase have publicly, through mailers…

    No kidding. I received a fourth mailing today telling me to vote yes on H! The special interests are spending vast sums in an attempt to propagandize the voters into voting themselves a tax increase.

    Of course not one word in their glossy flyers about the main cause of the City’s financial woes — the out of control unfunded pension and OPEB liability. And of course, not one word that the money from this sales tax increase can AND WILL be put toward that liability in a futile attempt to keep the gravy train of over-sized pensions and other unaffordable benefits going.

    And not one word that if this sales tax increase passes it will be the first step in getting us over a quarter billion in more debt as they will try to float a huge bond with the money from the tax increase!

    This amounts to fraud but of course it is perfectly legal when the government does it.

    And “Let’s Go Brandon” Slater’s Pro piece in the paper was full of lies and deceit. And since when should the City be in the ice rink business? No matter what he says he can’t hide the fact the City lost money on it. It is absurd that the City is putting up an ice rink and losing money on it to boot when the streets are falling apart, and passing this sales tax increase just enables more of this ridiculous behavior.

    And who ever said the Sorensen is the highest paid city manager in the state? And who said the sales tax increase would cost an individual $800 a year? He is making up straw man arguments. However, a consultant hired by the city of Chico did say the tax increase would have a per capita cost of $200 a year when it was considered before.

    Maybe what is worse than all that is that the editor of the ER didn’t bother to tell us that Let’s Go Brandon has spent at least $30,000 of his company’s money (and probably a lot more; we won’t know the total until AFTER the election) to get this passed. Why? Because he has city contracts and stands to get more if this passes. His pro argument should have been prefaced with those facts. Instead, the ER paints this guy as just a “good citizen” trying to convince us to do what’s best.


    • Juanita Sumner November 2, 2022 at 6:47 am #

      Yeah, we get TWO of each mailer, in our street mailbox, and then same at our PO Box. And here’s a funny side – my son, who have lived in Oregon for two years and has never been registered to vote in Butte County, has been receiving robo-calls from Reynold’s campaign. Seems they have deep pockets – Citizens for Safe Chico.

      That’s Teri Dubose, owner of Broadway Pawn. Here’s where I’ll tell my Broadway Pawn story. A friend of mine, a local musician who owned a music equipment business, reported some instruments and equipment stolen to the police, and then he went to various resale and pawn stores looking for the stuff. Found it at Broadway Pawn. Called the cops, had the proof – but here’s what happened. Dubose told the cops that the guy who sold her the equipment “is usually pretty good about” not selling her stolen stuff. But here he did! And what was the cops’ response – they told my friend he should just buy the stuff back from Dubose!

      That is a true story. If Teri Dubose would like to comment, she’s certainly welcome. But that is a huge problem I have with CSC – it’s run by a women/family who has profited off crime for years, and now we’re supposed to believe this campaign is all about public safety? Really?

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