Chico Taxpayers Association

I got the agenda for next week’s CLOSED Finance Committee meeting and it’s a gobstopper.

https://chico.ca.us/sites/main/files/file-attachments/5.26.21_finance_committee_agenda.pdf?1621544673

Item A, Business Tax Analysis Update – just what it sounds like, only this also includes a tax on rentals.

Item B, Cost Allocation Plan – another (why?) presentation from consultant Chad Wolford about “allocating” money from one fund to another to pay management salaries and benefits.

Item C, Sewer Enterprise Study and Rate Analysis – oh, you people on sewer are not going to like this and those of you who have still held onto your septic tanks better take good care of them.

Item D, Overview of Revenue Enhancements – this is an item that brings the art of Euphemism to a new level. Yes, Dammit, they’re talking about taxes!

These items all have one thing in common – a greedy, desperate city staff that wants to fund their pensions, damn the torpedoes. I’ve talked about A, B, and C, and will talk about them again in future, but right now let’s dive into D, which I will call “Operation Tax Blitz”.

City Manager Mark Orme and Admin. Services Director Scott Dowell have announced budget surpluses the last three years running, but are still making dark predictions for the future, and trying to tell us we need to raise taxes.

“Although the City has made great progress to overcome deep financial deficits and reestablish reserves,
projections point to a likely budget deficit in the coming years if revenue enhancements are not
approved.”

What they won’t say, is that our problem, which Orme has called “The Elephant in the Room,” is the pension deficit, the Unfunded Actuarial Liability. They’re trying to tell us we’re cheap asses who don’t pay enough taxes. As a member of a family living on less than $50,000/year, with tenants who all live on about same, it is really tough to take that kind of smack from some asshole making over $200,000/year with a benefits package of over $50,000 who only pays 9% of the cost.

“California cities have a variety of avenues to increase revenues for services and capital projects, which ranges from general and special taxes to bonded indebtedness.”

And the report proceeds to list those avenues.

Admissions Tax – Admissions tax is a revenue enhancement used when people attend a show, performance, display or
exhibit.

Business License Fees – Business license fees are considered a tax and any increase would need to be approved by a majority vote of the electorate.

Cannabis Tax – A sales tax measure on cannabis is already being discussed by the City Council.

Construction/Development Tax – A construction or development tax is an excise tax imposed for the advantage of building within the City. The tax is imposed only on new construction and is generally based on number of units, number of bedrooms or square footage. These taxes differ from development impact fees in that impact fees must be spent on services or facilities to mitigate the impact of development. [NOTE: This is a redundant tax – in addition to Impact Fees, and not restricted to mitigating the impact of development. In other words, it’s just a GRAB, as are so many of these suggestions. This is one way the city adds to the cost of housing.]

Documentary Transfer and Real Property Transfer Tax – A document transfer tax is a revenue enhancement allowed under the State Transfer Tax Act on documents which transfer the ownership of real property… Butte County and the City of Chico enacted this tax ordinance and the City received one half of the tax, $0.275 per $500 in recorded value. [NOTE: So, the city already has an ordinance with the county, but here Staff suggests a separate ordinance just for the city, which will raise the cost of housing] Dozens of California charter cities have enacted their own transfer tax ordinances. The tax rates vary with rates as low as $1.10 per $1,000 to $15.00 per $1,000.

Local Vehicle Registration Tax – Local vehicle registration taxes are special taxes collected by the DMV in the form of vehicle registration fees and remitted to the participating counties who in turn remit to the City. [NOTE: Butte County already has this program]

Parking Tax – A parking tax is imposed on citizens who rent parking space that is privately owned.

Property Tax – Generally, property tax cannot be modified by the City and would require State action. California’s
property tax is ad valorem, meaning it is based on the value of the property. Proposition 13 limits property tax to one percent and restricts the enactment of any additional ad valorem property tax, transaction tax or sales tax on the sales of real property. Proposition 46 modified this rule to allow for an increase towards funding indebtedness. [NOTE: the only real “indebtedness” the city faces right now is the UAL]

Parcel Tax – Parcel taxes are a tax on a parcel of property and are not directly based on property value, which is what
allows a parcel tax to circumvent Proposition 13. [NOTE: Staff reports these have had a dismal showing lately, mentioning CARD’s failed attempt at passing Measure A last year.]

I’ll stop here to say, with the exception of the Cannabis Tax they are already discussing, I don’t think any of the above suggestions are serious. Tomorrow I’ll pick up with what they are really getting at – sales tax increase. Although, there is a frightening report on raising the Utility Tax, as well as a very frank discussion of the other kind of tax – franchise fees.

Next time, on This Old Lady goes to a Tea Party!