By Jeff Harris
The original Measure U, a half-cent increase in our sales tax rate, was passed in 2012 with the promise that it would restore police, fire, parks and library services lost to the Great Recession.
It worked very well and saved the city from severe stress. We restored many jobs in public safety and parks, but the City Council became dependent on the income. Part of the strategy to pass the tax measure was to have it sunset in six years.
It was up for renewal in 2018, and Mayor Darrell Steinberg, with a desire to build the city quickly, wanted more money to work with and convinced council members to double the tax and make it permanent.
I was the lone dissenting vote on the Council to place this on the November ballot. I instead proposed offering voters a choice—to renew the half cent, or to add another half cent as an option. The council disagreed and placed Steinberg’s proposal on the ballot.
It’s not easy to pass a tax increase. So the mayor’s campaign promised that Measure U would mean rebuilt neighborhoods, affordable housing, a renewed riverfront, economic equity, high-wage jobs—you name it.
But the actual ballot language—the council’s only promise to voters—was almost identical to the original measure: The tax would restore core services, including public safety and parks, and would help reduce homelessness and create jobs.
The fact is that the original Measure U never restored all of the jobs and services that we lost to the recession, but the second half-cent sales tax increase could get us there.
However, a new wrinkle emerged around 2016. CalPERS lowered its expected rate of return on investments. Partly as a result, the city’s liability to pay for pensions is climbing astronomically through 2025. It’s almost as bad as the Great Recession!
Without these increasing pension costs, Sacramento would be sitting pretty. With this higher pension liability, we must use some of the new Measure U money to pay our debts, with some left over for new projects.
This doesn’t sit well with the mayor. It means that the cookie jar is not so full as he had hoped. Promises he made can’t be kept.
So his plan is to take out a big loan—mortgaging our real estate assets such as parks and fire stations and the Sacramento Convention Center—to pay for projects that are as yet unspecified. It means serious debt for 30 years. Should there be a downturn in the economy, which is likely, Sacramento could face bankruptcy.
I have no problem with the mayor’s grand vision to create an “Emerald City,” but I want to pay for it responsibly, without mortgaging the farm. The debt that he favors is far too risky at this time.
The budget that the city manager has proposed is sound, balanced and sensible. It is rooted in reality and contains millions of dollars invested in all the things that Measure U is supposed to pay for. We should adopt the budget, exercise fiscal prudence and grow our city at a rate that we can afford.
Jeff Harris represents District 3 on the Sacramento City Council.