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Influential Sacramento business leader suggests repealing new city sales tax

Hear Mayor Darrell Steinberg talk about what he’ll do with the money that comes from Measure U

Sacramento Mayor Darrell Steinberg talks to the Bee reporter Theresa Clift about Measure U at an election night party at Urban Roots in Sacramento on Nov. 6, 2018.
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Sacramento Mayor Darrell Steinberg talks to the Bee reporter Theresa Clift about Measure U at an election night party at Urban Roots in Sacramento on Nov. 6, 2018.

Sacramento’s debate over how to spend new Measure U sales tax revenue took a turn Thursday when a key business leader suggested repealing it.

Barry Broome, head of the Greater Sacramento Economic Council, tweeted he’s disappointed with recent City Hall discussions about the measure, and fears that disadvantaged communities “may be overlooked.”

If that’s the case, he wrote, “I think repealing the measure should be on the table.” Broome did not respond to a Sacramento Bee request for elaboration Thursday evening.

The measure, championed by Mayor Darrell Steinberg and approved by city voters in November, added another half-cent tax to the city’s existing half-cent sales tax surcharge.

The ballot wording did not explicitly say how the money would be spent, but Steinberg said it’s his intent to invest a substantial portion in job creation, notably in under-privileged neighborhoods, and in housing, including affordable housing for low-income earners.

City Hall debate in recent weeks has focused on whether to place the new revenue, around $50 million this year, into the city’s general fund. Steinberg opposes that, recently contending all the money could then be siphoned into paying for salaries and pension payments.

Broome, who wrote a Measure U opinion piece in The Bee last year calling on voters to invest in economic development, was among a group of business leaders who sent the city a letter in April essentially aligned with Steinberg’s spending concepts.

City Manager Howard Chan has said it is too early to know how much of it might go in future years toward salaries and pensions, but disagreed with the mayor that all of it would.

Steinberg has proposed setting a chunk aside annually for five years for projects and services for people in disadvantaged neighborhoods. He’s also recently suggested selling bonds backed by future Measure U revenues, and investing the proceeds up front in community and jobs programs. Doing that could pre-empt the city from using most of the money on salaries and pensions.

Several council members disagree, saying the city general fund could face a deficit in upcoming years. The city must come to a determination about the funding by June when it approves its annual budget.

The mayor declined comment on Broome’s repeal idea, but said in an emailed statement to The Bee Thursday: “We’re focused on one thing: Implementing the will of the voters and making sure the lion’s share of Measure U resources goes to building jobs and equity for all of our neighborhoods.”

Councilman Steven Hansen, contacted by The Bee, said Broome’s tweet is “counterproductive” because it doesn’t advance what he called an earnest ongoing conversation at City Hall about how to maintain the city’s long-term health while also investing in under-served communities.

Sacramento, West Sacramento and Roseville area are among 51 California cities in which sales tax will increase starting April 1, 2019.

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