Lessons Learned during the Measure X Campaign
By Emerson Drake
Measure X, the one cent or 1% increase in our sales tax was a complicated issue from the start. First there was $35,000 poll which mainly questioned white homeowners. Unfortunately, for those in favor of Measure X, the demographics of the city didn’t cooperate. But the real germination was during the budget preparation process last year.
Mike Hardin Lying to the public saying the money would be kept in a lock box for safety. Photo credit Patty Guerra
The Mayor and City Council, as if playing pinochle, were playing for the last trick. Dragging out the hand to hide a losing card yet to be played. They were well aware the deficit budgeting tactics they had been employing for several years couldn’t continue. Robbing from Peter to pay Paul, which in this case was from money set aside for our self funded workers comp and retirement funds to name just a few. Knowing the practice would be coming to an abrupt end in another year they made the decision to find a way to convince the public to once again tax themselves to cover the shortfall.
The obvious way was to dangle a .5% increase based on improving our police presence and shortening response times for our Fire Dept. and an additional .5% split between roads and a variety of ‘funny’ money projects. The .25% was promised to a variety of organizations and special interest groups.
While sitting in on budget workshops and Finance and Economic Development Committees I had the opportunity to learn what I didn’t know and what they didn’t want us to know in order to be able to ask the hard questions. Questions regarding the true budget shortfall and how they intended to address it.
For example they said they planned on hiring 60-80 police officers (yes Nyhoff said 80) but they didn’t mention they only planned on hiring 20 or less each year. And of course the plan included one fire engine and eight crew members and one chief. If you ballpark $110,000 for each police and $90,000 per fireman, obviously money would be left from the estimated $13M the .5% would raise. Instead of saving the money for future salaries they intended on spending it on the budget deficit.
The other .5% was to be split evenly between roads and special projects. Some of these were to be one time expenditures chosen by public committees. But much was promised in the way of financial incentives to local business already open here in Modesto. An example of these were proposed by Cogdill and Burnside to pay for facades for existing buildings, and an inducement of up to $9,000 to provide new jobs downtown (many of these would be minimum wage food service positions.) Cogdill wanted to give more money to the Alliance (we already give $65,000 yearly) and use more of the money to help develop Tivoli in addition to the special treatment already given by absolving them of previously included Ag mitigation responsibilities.
Also mentioned by staff were projects to run infrastructure to newly annexed areas to speed up possible business on the city’s North side. But if you kept a running total (like I did) of the monies promised you quickly realized much of it was promised several times over to different groups from city planners to citizens committees to the Chamber of Commerce.
Which at first glance doesn’t sound bad, except if the road tax were to pass in 2015. Then according to the way Measure X was written, .5% would be repealed and only the .5% for safety would be left. By late 2015 we would have, in theory, hired 40 police and 9 fire and be interviewing another 20. But we would have that elusive $6.5 to $11.2 Million dollar budget shortfall. Even though we’ve seen property prices rise, Modesto gets the majority of its money from sales tax revenue. And there’s no need to point out wages haven’t risen and the unemployment figures are still high and skewed since once you no longer receive unemployment benefits, the statistics assume you’re working.
The problem becomes how to cover the budget shortfall, pay for the new safety officers and the rising wage (fire was already given their raises so they could claim the Measure X money wasn’t going for new raises, MPD’s contract is up next year) costs along with repaying the money borrowed to fund the deficit in prior years.
It simply couldn’t be done. And don’t get me wrong, I went in front of the City Council three times asking/begging for the .5% to be kept sacrosanct and argued during committee meetings for the same. City Manager Gregg Nyhoff and the Mayor were playing Pollyanna by saying during the meetings they were hoping the economy would come back by then. But too many promises were made to too many groups for Measure X to succeed in its goals.
We were going to be put in a position of laying off the newly hired officers just to keep status quo in city government. Do we want to close city parks, golf courses, and lose city services? No, but were/are there any realistic choices? The City Manager and Mayor refused to present a clear picture to the public. They promised millions of dollars over the six years to the Chamber just to keep them effectively on the sidelines (yet several members went ahead and helped fund No on X.) We find this strange since businesses don’t pay sales tax they only collect it. But they still believed in the need to placate a lobbying organization (a 501 (c) 6 ) like the Chamber. If they had been willing to do battle with these greedy businessmen in the past, the Chamber, like the Christmas time story’s Humble Bumble, wouldn’t have any teeth, but I digress.
When they look you in the eye up front and intentionally mislead you, the one thing you can be sure about is that it isn’t going to get any better and that six years down the road, if anything it was going to be worse.
We needed the additional police officers and firefighters badly. We needed a funding mechanism for the budget. But with its .5% being repealed if the self-help road tax passes (the road tax allows us to leverage our money several times over ) and with a six year sunset, Measure X, unfortunately, wasn’t up to the task, no matter how badly we wanted it to be.
Nice article Emerson. One quick note: ‘Since they don’t pay sales taxes, only collect it,’ is not necessarily true. Small retailers often times have to haggle in order to get someone to purchase goods in their store. I’m not talking WalMart or Target or the other mega stores, but little guys like furniture stores, clothing retailers, boutiques and specialty stores rarely go a day without a customer asking for a concession. Often the concession is just the Tax they would need to pay on top of the price of the item. Higher tax, higher discount. This is not to mention that higher overall price even with tax, depresses overall non-essential sales especially when wages are not rising.
Good point but to agree to a discount isn’t quite the same as paying taxes.
Emerson: I have a list of problems with what you say here, but here’s two: If they said publicly they planned to hire 60-80 police officers, but didn’t say they planned to hire only 20, what is your basis for claiming they planned to hire only 20? Also, you are claiming all involved, from the Mayor to former Chief Harden, knowingly lied. How did they expect to get away with the lies? Do you mean to say they expected the Oversight Committee, the Bee, you, and everyone to whom they vowed to hire more police would wait six years while they spent the money elsewhere without a huge protest? Are you saying the Mayor, the Council, and Chief Harden are that dumb?
Apparently I didn’t explain myself well so let me take another crack at it. Greg Nyhoff publicly stated they planed on hiring 60 to 80 officers to be paid for by Measure X. He also said they probably wouldn’t be able to hire more than 20 per year due to recruiting and police academy challenges. Hardin, according to a Bee article, and a follow-up conversation I had with Patty Guerra to verify Hardin’s quote, stated in his first press conference the .5% would be placed in a lock-box for safety only( I can locate that in the Bee archives if necessary). So yes Mike Hardin lied. During a finance committee meeting, Nyhoff, when pressed, admitted he was hoping the economy would turn around sufficiently and that the road tax wouldn’t be passed or at least delayed until the economy turned around enough to pay for the new officers and the budget deficit. This is a highly unlikely scenario.
I believe the Mayor and City manager were less than forthcoming (to put it nicely) with the public and praying the road tax fails all in the same breath. It once again points out the importance of attending the committee meetings and pressing the hard questions. These were Brown Act meetings and as such were recorded. Also go back and listen to the Council meeting archives and you’ll notice no one on the dais ever says the money (.5%) will be kept solely for safety as Hardin did.
The budget shortfall is $11.2M but $2+M can be saved by not filling open positions. They had planned on using the last $3M in various reserve accounts leaving a $6+M shortfall for 2014 and it goes back up to $9M in 2015. These were the numbers discussed in August of 2013.
To answer your last question, I think the the Mayor and Council were in a tough situation and despite reservations discussed by several members of the council, Measure X was the best they felt they could come up with. I think Mike Hardin’s comment and its lack of veracity speaks for its self.
The original article has not be changed and most of this was stated the first time.