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Citizen floats utility tax idea for budget woes

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POSTED October 8, 2009 1:21 a.m.
Manteca resident Bud Wallace has an interesting suggestion in a letter you can find elsewhere on today’s opinion page.

Simply put, he is advocating a $5 a month utility tax on sewer, water and garbage to help keep Manteca Police funded for a limited time – say the projected five to six years economists are predicting for things to get back to “normal.” It should be pointed out such a move wouldn’t do much good today but it may just avoid salary cuts and more layoffs down the road.

A utility tax requires a vote of the people as the City Council cannot simply implement it. With roughly 22,000 accounts, that would generate over $1.3 million a year.

There is a very real chance that the city’s revenue situation is going to get worse before it gets better. If our police officers ultimately join their fellow municipal workers in accepting the compensation adjustment and stick with Manteca we should consider making sure they don’t suffer more reductions in compensation or even a loss of jobs.

More than half of the city’s general fund comes from property taxes and sales taxes. Growth – and Manteca is still experiencing it although at a slower pace – will add 300 new homes this year and at least that many next year plus new retail in the form of the 250,000 square-foot lifestyle outlet center. There is a good chance that will either negate another slide in existing property values that is anticipated when the assessment is done again on Jan. 1, 2010 or at least counter some of the losses.

At any rate, property tax isn’t coming back to its 2008 levels in Manteca any time soon.

The prognosis for sales taxes is a bit better. There is a good chance even with the economy weakened Manteca could pull in enough regional sales tax dollars to tread water for a year. Even if there was an increase, it wouldn’t be large enough to make a difference and it may not get to Manteca in time for the 2010 budget thanks to the state holding back a cut of local sales taxes for four months before paying it.  

The ballot measure could be worded in such a fashion that it requires 58 percent go to public safety and the rest to other general fund uses such as streets, parks, and general government operations. That reflects the general fund split in the last fiscal year budget.

You won’t have to worry about the receipts going to pay raises for the first year or so since there is an excellent chance city receipts are going to get hammered even more in the coming months.

Essentially you’d be making sure the status quo of reduced services are kept in place without further drops or – in a best case scenario – you could assure that some of the seven retirements in the police ranks in the coming year will be able to have a replacement hired.

Of course, there is the issue of people who are deadbeats on their municipal water bill. Last year Manteca wrote off $140,000 that couldn’t be collected. They’ve changed the policy about how one signs up for municipal water and other services so you simply  don’t stiff the city and then have it changed to someone else’s name who lives in the house with you and has identification that provides a different last name. They are now requiring a copy of the rental or lease agreement before servcie can be started so they can make sure the person who stiffed them isn’t still renting the place as well.

Even if you could collect money, it belongs to the water enterprise fund and can’t be used for general fund purposes that include police compensation.

There is a very real chance that 10 percent of the population may not be able to even pay a utility tax from those who have lost their jobs to those on limit fixed incomes.

Do I think such a tax at $5 a month – or $10 a month which would generate over $2.6 million a year would pass if it was clear it would be done to prevent further erosions in municipal services?

It might.  Keep in mind that the measure – if work started today – wouldn’t get on the ballot until 2010 as part of the California presidential primary election.

There are a number of people who have had property tax adjustments made that will start popping up in their tax bill in late fall. In my case it would put $73 a month back in my pocket or $879 a year. I’ve already got my next DMV registration and the state’s increase will take $40 of that. I figure the accelerated collection of 2010-11 state income taxes will take somewhere around $200. That leaves $639 just under $53 a month to toward increases in basic living expenses – including PG&E, sewer and water rates that go up on Jan. 1 - that aren’t being countered with a pay raise.

Could I afford $60 to $120 a year in utility taxes? Probably. Would it be worth it to avoid a further deterioration in services? That’s the real question.
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