Backers of Measure U bill it as a cure-all for what ails the city. Detractors say it’s a sham.
With the November election days away, voters can be certain of one truth: Their mailboxes will be full of paid political ads about Measure U.
Measure U seeks to renew a half-cent sales tax that was first enacted in 2012 to preserve funding for police, fire and parks. It would also add another half-cent hike to raise the city’s sales tax to 8.75 percent beginning in April.
The original half-cent tax brings in about $50 million annually, which pays for 195 police positions, 137 in the parks and youth department and 90 in the fire department. The additional half cent tax is projected to bring in another $50 million.
Sign Up and Save
Get six months of free digital access to The Sacramento Bee
The extra bump is where most of the controversy lies: Is it necessary to grow the city’s economy and create jobs and equity, or is it a ruse to pay for existing obligations and political pet projects?
Advertising has been especially aggressive from supporters of the proposal, including unions. SEIU 1000, the building trades and public safety unions are all in favor of Measure U. They recently funded a 12-page mailer extolling its benefits on behalf of Mayor Darrell Steinberg, the main voice supporting Measure U.
Steinberg repeatedly has said he would like to see Measure U money used to address homelessness, build affordable housing, and create jobs and equity for young people. The mailer suggests Measure U money will help in those areas and others, but he can’t be specific, leaving distrust with some voters.
Measure U is a general tax, with revenues going into the city’s general fund — which is designed to allow it to win at the ballot box with a simple majority. It would require support from two-thirds of voters for passage if it was tied to specific projects. The original Measure U didn’t pass with that threshold, leaving city leaders nervous — and preferring the risk of vague assurances over the need for high approval.
That means there are no guarantees where the money will go, despite political plans.
If Measure U passes, the city plans on having an oversight commission of residents and experts who would recommend projects to be approved by a City Council vote.
“We have talked about a variety of options for Measure U spending, but in the end any expenditures will be carefully monitored by a Measure U Community Advisory Committee with expanded authority and members who have subject matter expertise,” Steinberg wrote in a statement to The Bee. “The process will be public and transparent, and it will hold people accountable at every step of the way.”
Measure U’s inherent vagueness emerges in another “yes” campaign claim: By leveraging a quarter of the tax revenue and using it for a bond-backed capital fund, the $50 million could be turned into $400 million for development projects that Steinberg has suggested could include both affordable housing and development of the waterfront. Steinberg has also suggested that private-industry partners could be asked to do a 4-to-1 dollar match on that money, growing it to $1.6 billion, attractive math that could work out — or not.
It would require the city to take on significant debt during a possible recession. Steinberg has had success wooing private partners in the past, including a deal with Sutter Health to boost homeless services, but there’s no guarantee he finds takers on future projects.
Critics of Measure U argue that discussion of where the revenue would go isn’t really much of a mystery. They say much of the money raised will go toward pension payments, which the city expects to reach $129 million — nearly double last year’s payout — by 2022-23.
“It’s a classic bait-and-switch. The bait are the phony promises and the switch is that it all goes to pay for city’s out-of-control pension bill,” said Craig Powell, head of the opposition campaign and leader of fiscal accountability group Eye on Sacramento. “We believe it’s inevitable that two to three years down the road, they’ll be back for another tax hike.”
Eye on Sacramento is the main opponent of Measure U. The NAACP is also against the hike, according to a statement.
Powell and other critics say Measure U would establish the highest sales tax in the region, higher even than San Francisco.
That’s mostly true: At 8.5 percent, San Francisco’s sales tax is lower than the proposed Sacramento rate, which would tie Sacramento with the 850-person town of Isleton for highest rate in Yolo, El Dorado, Placer and Sacramento counties. Several cities in the East Bay and Marin County have tax rates in excess of 9 percent.
Other numbers put out by the “no” campaign aren’t as clear.
A “no” campaign flier claims every Sacramento resident would pay $200 more per year — $800 for a family of four — if Measure U passes. Powell later clarified to The Bee that those numbers were meant to reflect averages, not absolutes.
The “no” campaign made its estimate by dividing the $100 million in tax revenue by the city’s 500,000 residents, Powell said, a formula which would make sense were city residents the only ones spending money in city limits. Shoppers and commuters from the suburbs — not to mention tourists from farther away — would ultimately contribute much of the revenue if Measure U passes.
The median household income for Sacramento families was about $52,000 for 2012 to 16, compared to $62,800 statewide, according to U.S. Census data. To support the “no” campaign’s claim, a Sacramento family of four would have to spend $80,000 annually on consumer goods, which excludes things such as utilities, medical services and some food purchases.
The “no” campaigns most misleading statement might be its slogan, “Don’t Double the Tax.” Passing Measure U would double the 2012 tax increase, as Powell noted, but not the city tax.