Steinberg on sales tax increase: ‘One penny could change the economic arc of Sacramento’
The Sacramento City Council on Tuesday voted to place a dramatic measure on the November ballot asking voters to approve a 1-cent city sales tax to maintain basic city services, such as police positions, but also to finance an ambitious program of community and economy-building.
Council members and many community leaders have supported the general concept since Mayor Darrell Steinberg proposed it in June. But the 7-1 council vote Tuesday came only after a series of council-dais debates between Steinberg and Councilman Jeff Harris over political strategy on how to approach voters with a major tax issue — essentially whether to go for a full one-cent or play it safer and ask for less.
The city’s Measure U will notably sit on a ballot alongside Proposition 6, a highly contested measure repealing the state’s gas tax.
If voters pass Measure U, the city’s sales tax would rise to 8.75 percent next April, making Sacramento the highest locally taxed city in the region, alongside Isleton.
The proposal is two-fold.
It would permanently extend an existing temporary half-cent sales tax that city voters approved in 2012 to restore deep city police, fire and other service cuts that had occurred during the recession. Then it would tack on another half-cent to allow the city to launch Project Prosper, an ambitious program to induce job growth; invest in neighborhoods, especially poorer ones; decrease homelessness; subsidize affordable housing for working people; and invest in programs to prepare young people for a modern Sacramento economy the council wants to build.
Steinberg, chief advocate for the ambitious effort, took an aggressive tack. He cited several private polls over the last two years that suggest voters would be willing to shoulder for a one-percent tax.
He said the city needs the full amount to finance its ambitions, calling the moment historic for the city, and saying, “this is why I ran for mayor.”
“Today will be remembered as the day Sacramento defined its future,” he said.
Councilman Jeff Harris was the only council member who opposed the plan. He argued for a less-ambitious approach that would give voters more choice. He initially suggested putting two measures on the ballot, one asking voters to agree to make the existing half-cent tax permanent and another asking voters for an additional quarter-cent to do more. He later merged that into one measure, asking voters to OK a three-fourth cent tax.
“I perceive more risk there than you do,” Harris told Steinberg. Harris voted “no” to Steinberg’s plan. Councilman Allen Warren was absent.
Harris said no one he’s talked to yet in his district is willing to support a full one-cent tax, but many are willing to consider a three-quarter cent request. “Voter choice is imperative. All issues should be on the table and voters should be able to decide at what level they want to tax themselves.”
The current temporary measure generates about $50 million annually. A new measure at one cent is estimated to double that.
Steinberg and the council say the basic tax extension is needed to maintain existing levels of service provided to residents, including police officers and crime enforcement programs, parks workers and maintenance projects, as well ambulance and fire service levels, and programs at libraries and pools.
The new money represents the next step in a city push that had its roots in the public outcry this spring after police shot and killed Stephon Clark in south Sacramento.
But Councilman Steve Hansen warned not to promise voters too much. He said he fears another recession is around the corner, which would reduce the cash flow from the new tax.
“There is a real chance that we will not be able to deliver on these promises,” he said.
A number of community leaders spoke at the council’s two discussion sessions for the measure Tuesday, expressing support. Some, however, said they did not trust the city to do what it says it would do with the money. Council members said they intend to set up a citizen commission or several to advise them.
Opponent Craig Powell of the Eye On Sacramento tax watch group called the ballot measure exploitative because it is being presented as the only avenue to avoid dramatic city budget cuts.
He said city residents should instead be given the opportunity to vote to extend the half-cent tax, and not be faced only with the option of doubling the tax.
“Frankly, we find your strategy to be shameful,” he said. “EOS volunteers will do everything within their power to defeat your proposal at the ballot box.”
Powell and others contend the city should reduce overly generous union contracts and cut soaring pension costs first, before asking the public for more money. The city estimates that pension payments will rise to $129 million in the general fund in 2022-23 from $67 million this year.