The debates over pension changes and a possible sales tax increase in Sacramento are heating up.
Earlier this week, City Council members made their strongest comments to date on what they argue is the need for the city's employees to contribute more toward their pensions.
If that happens, the City Council will likely ask voters to approve a sales tax increase in November that could generate as much as $30 million a year for the cash-starved city.
"It's my opinion that if we're going to ask our citizens to consider taxing ourselves (more), that the city of Sacramento should have its house in order first," Councilman Rob Fong said. "It's critical that we demonstrate to the public that we have undergone pension reform with our employee groups. It would not be responsible for us as a city to go out and ask for more money to support our general fund activities if we're not taking care of business from a cost side."
Persuading city workers to pay more into their pensions has become a major theme in the city's budget discussions this year. Much of the attention has been focused on public safety workers, nearly 100 of whom are slated to be laid off later this month if members of their unions do not agree to pick up the entirety of the employee contributions toward their pensions.
Should city labor negotiators be unable to wrangle pension concessions from the unions, one council member opened the door toward a possible November ballot measure that could force those changes. Voters in San Jose and San Diego this week approved ballot measures aimed at cutting back on public pension costs.
Councilman Steve Cohn asked the city attorney's office to provide an opinion on whether a Sacramento ballot measure requiring added employee contributions to pensions would be legal, given that those changes could supersede the collective bargaining process.
A pension ballot measure would likely act as a companion measure to any sales tax request made by the council.
A poll commissioned by City Manager John Shirey this spring showed 71 percent of voters would support a one-quarter of 1 percent sales tax increase to fund core municipal services. The poll showed 68 percent would favor a larger increase a one-half of 1 percent hike that would generate $30 million a year. The city's current sales tax rate is 7.75 percent.
A general-purpose tax to pay for core services would require a simple majority to win passage. A special-purpose tax an increase earmarked for a specific city function such as public safety would require two-thirds voter approval.
The City Council is expected to begin debating the language of a ballot measure later this month. The council would then vote on whether to place the measure on the ballot at its July 24 meeting.
Council members said they want the city to get through its budget process before making a final decision on the tax measure.
"We need to show our constituents and the residents of Sacramento that we are being responsible, that we're looking not only at making it through next year, but looking at what the next number of years will look like," said Councilman Jay Schenirer.
Cities across the state are having success passing tax increases. Of the nine cities that sought sales tax increases on Tuesday's ballot, eight were successful.
The only measure that failed was a tax earmarked for public safety, libraries and recreation programs in Alameda. That measure received more than 50 percent support, but fell short of the two-thirds required for approval of a special purpose tax.