Steinberg on sales tax increase: ‘One penny could change the economic arc of Sacramento’
Opponents of a proposed sales tax increase in Sacramento are mounting a ragtag effort to take down the measure backed by Mayor Darrell Steinberg and some of the city’s biggest political financiers.
Steinberg has pitched Measure U as a way to bolster affordable housing construction in Sacramento while also investing in shelters for homeless residents and job training programs in low-income communities. It would double and make permanent an existing half percentage point sales tax the city has used to fund public safety and parks after cuts during the recession.
Despite a fundraising disadvantage, opponents have struck first with a billboard in a prominent location on the Capital City Freeway east of downtown, signs placed around the city and fliers sent to voters. Craig Powell, chair of the No on Measure U committee, said the measure reflects a “broken promise” and would essentially go towards the city’s rising pension costs.
“Not only is (Steinberg) punishing the poor with the tax rate, he’s doing so with a false promise that it’ll help the poor, that he’ll revitalize neighborhoods,” said Powell, who is also president of the local tax watchdog group Eye on Sacramento. “It’s a con job, it really, really is.”
The opposition campaign has raised $89,750 in campaign contributions of $1,000 or more as of Wednesday. The Rancho Cordova-based Western Electrical Contractors Association has made the largest contribution to the campaign, at $49,750. The organization did not respond to requests for comment.
Other “no” contributions include $12,000 from Powell’s property management company Powell Properties, and $25,000 from Chris Rufer, the president of the Woodland-based tomato processing business The Morning Star Packing Co. who has donated to past local campaigns in line with his Libertarian views, anti-big government views.
The tax hike would take effect April 1 and flow into the city’s general fund, meaning the money could be used for any municipal purpose. Because of that, Measure U only requires a majority of votes to pass.
Still, Steinberg has said Measure U would help disadvantaged neighborhoods in particular, whose needs have drawn more attention after the March fatal police shooting of Stephon Clark in Meadowview.
“This half penny would continue to be used for essential city services. But with the other half penny, we could dream,” wrote Steinberg in a Sacramento Bee op-ed published in June.
The Yes on Measure U campaign has dwarfed opponents in contributions of $1,000 or more. Drawing support from local labor unions and developers, it raised $535,000 in major donations as of Wednesday, almost eight times as much as the opposing campaign.
“The yes campaign is going to carpet bomb the city, and the no campaign is basically some low quality yard signs and a few billboards, said Sacramento political consultant Steve Maviglio. “You can’t run an aggressive campaign with that kind of cash, it’s essentially petty cash.”
A local union representing plumbers and pipefitters, UA Local 447, donated $50,000 on Sept. 21 to the Yes campaign – a contribution size that’s on the upper end of the union’s typical campaign spending, according to its business manager Aaron Stockwell.
“It will stimulate growth in the city and stabilize finances and create jobs,” he said. “We’re all about construction and keeping the city moving forward.” Members of the union have worked on passed city projects, including the Golden 1 Center.
Other major donors to the yes campaign suggest who else may benefit from the increased sales tax. With Steinberg and other advocates of the measure arguing that the extra half-cent hike could be invested in housing projects throughout downtown, labor unions, construction companies and developers make up the bulk of major donations towards the yes campaign.
The largest donor toward Measure U has been the State Building and Construction Trades Council, which has donated $150,000. Last month, that organization was one of several local unions that pushed for and secured a workforce and training agreement with the city, which sets benchmark goals for contractors to hire at least half of their workers from the Sacramento region for public developments costing more than $1 million.
A city staff report estimated that “between 10 to 15 projects will be covered by this CWTA during the first 18 months” after the agreement was approved, including the Sacramento Convention Center and the Community Center Theater renovation projects.
Other backers of the yes campaign include Sacramento developer Mark Friedman, who donated $50,000, the Sacramento Police Officers Association Political Activity Fund, which has donated $25,000 and the California Hotel and Lodging Association, which donated $30,000.
Despite the financial uphill battle, Powell said he and the other volunteers, roughly 40 in all, can be successful, particularly as they prepare their social media marketing and yard sign distribution.
“It’s been a very aggressive, fast moving campaign,” Powell said. “(Steinberg’s) gathered a tremendous amount of campaign funds but we’re nimble, we’re out at local events” in the community.
If Measure U is approved, the total sales tax in Sacramento would be 8.75 percent – tied for the highest rate in Sacramento County with Isleton, and surpassed in the region only by Stockton in San Joaquin County, which has a 9 percent sales tax. A city fact sheet estimates that the combination of the previous half-cent tax and the additional half-cent increase will raise $95 million annually.
The 2012 sales tax hike, approved with 64 percent of the vote, would automatically expire at the end of next year. If Measure U fails, the city would be forced to re-evaluate how it funds the public safety officers currently paid for by the revenue, Councilman Jay Schenirer said. The council could call a special election in the spring as a “back up” plan to maintain the current half-cent tax should the measure fail, he added.
Outside Sacramento, other cities in the region are also considering raising their sales tax. Roseville and Folsom both have November ballot measures proposing a half-cent increase in the local sales tax, up to 7.75 percent and 8.25 percent, respectively.