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The Measure X Files

With ballots in the mail, local residents and officials sound off

By Sarah Phelan

Karen Delaney believes the reason the city of Santa Cruz is having a Measure X election this August has nothing to do what the city has done and everything to do with a statewide anti-tax campaign.

"The city has been charging a franchise fee since the '60s, and lots of cities have them too, but anti-tax advocates throughout the state have for several years been campaigning to challenge taxes on principle all over the state," says Delaney, who is executive director of the Santa Cruz County Volunteer Center.

Delaney is referring to cases brought by the Howard Jarvis Taxpayers Association--first against Roseville in 2003, and more recently against Fresno in March 2005--in which appellate courts found that city-owned utilities can't collect franchise fees.

Instead, the court ruled that such fees should be interpreted as taxes and put to a popular vote, as stipulated by the provisions of Proposition 218, which California voters passed eight years ago.

City Councilmember Cynthia Mathews describes the "fee or tax" quibbling that led up to Measure X as "arcane."

"This is not a from-the-gut election issue," says Mathews, who claims the city is putting Measure X on the city's first ever mail-in election "to stop hemorrhaging money from the city's budget."

Reportedly, the city is losing $200,000 a month since July 1, which is when the city stopped charging the in-lieu fees.

"Two hundred thousand dollars is a whole lot of jobs flying out the window," says Mathews. "The secretary of state sets a few dates [for when] we can hold a special election each year. Aug. 30 was the soonest."

Meanwhile, tax foe Steve Hartman accuses the city of having organized a mail-in election this August, "because it wants to deny the community the democratic process."

"This election is being shoved down our throats so quick. The city should have waited until November, so the air can clear and people can understand what this all means," says Hartman, who describes himself as a "registered Independent."

Hartman, who suggests doubling admissions fees instead, claims that Measure X is going to hurt the poor--unnecessarily. "The crazy thing is, we don't have to lose anything. The city could be rolling in money."


Perhaps the most bizarre consequence of the recent shift from "fees" to "taxes" is that it prevents the city from charging the proposed replacement tax to UCSC and city school districts, because these institutions are tax-exempt. And by putting the issue to a citywide vote, the city will no longer be able to charge customers outside city limits, such as those who live in Live Oak and Capitola. This means that even if Measure X passes, the city will rake in at least $400,000 less than under the previous franchise fee system.

"Raising the replacement tax might have pissed off the voters so, we balanced our interests with that of the community," says Mathews, affirming that, yes, sewer, water and garbage rates have been and will be increasing, not because of the franchise fee ruling but because of "environmental demands of the future," which include replacing rusting water pipes and exploring desalination options.

If Measure X fails, the city will face the annual loss of an extra $2.5 million, on top of an existing $1. 5 million shortfall, all of which adds up to potentially extensive cuts in city services, which may include closing the Teen Center; reducing the hours of the Natural History Museum; further reducing the hours of the Louden Nelson Community Center; closing the Civic Auditorium; further reducing the hours of Harvey West Pool; reducing contributions to agencies that provide social services for seniors, children, the homeless or others; severely reducing the maintenance at parks; and reducing the Police Department's Community Services section.

Hidden Fees, Hidden Agendas

Though the list of Measure X supporters is extensive and includes everyone from U.S. Rep. Sam Farr (D-Carmel) to the Seaside Company's Charles Canfield, Steve Hartman isn't the only No on Xer in town.

Local resident Paul Marcelin-Sampson authored the argument against Measure X. He accuses the city of scare tactics, unfair taxation and fiscal irresponsibility.

"Public safety services are protected by the California Constitution," claims Marcelin-Sampson in response to suggestions that crime prevention programs and one fire engine company could be cut if Measure X fails.

"And it's a permanent tax," he says. "Yes, people have been paying an equivalent fee all these years, but utilities are basic services that no one can do without. A sales tax has exemptions for food and prescription drugs, but there's no exit in this case."

Assistant City Manager Martin Bernal says that while there are no exemptions, since the proposed tax is based on consumption, "those that are frugal and conserve will be taxed at a lower rate."

Such reasoning will doubtless fail to impress retired dentist Thomas Mullen and his wife, Sylvia, who authored the rebuttal to arguments in favor of Measure X.

"We have already have been charged a 7 percent utility tax that voters approved in 2002," says Thomas Mullen, whose last foray into politics involved a failed attempt to fluoridate the city's water, a fight in which he and Councilmember Mathews were on the same side of the fence.

Above all, he and his wife attack what they see as the city's past duplicity--and the open-endedness of its proposed Measure X tax.

"The franchise fee may not have been horrible, and perhaps people didn't notice it was there, but we should have known it was there," says Mullen. "Utility rates are escalating in general, so this tax is going to shoot up like crazy and be very burdensome to young families, poor people and seniors, and there is no sunset clause."

But as Assistant City Manager Bernal points out, although Prop. 218 passed eight years ago, "like most initiatives, it had vague and broad language, which no one really knew how to interpret." And then there's the fact that it's not illegal for cities to charge in-lieu franchise fees to private utilities.

As for the future, Bernal says it's not standard for taxes to have a sunset clause and that cities have always had the need to adjust their taxes and expenditures.

"It used to be that cities had the ability to set property taxes, plan ahead and look into the future," Bernal muses, "but that's changed thanks to Proposition 13 and Proposition 218."

Red Herrings

Meanwhile, Mullen's wife, Sylvia, reveals that one of their goals is to see an outside impartial group say, "Hey, you have to make this city more business- and tourist-friendly and get back to a more sustainable government."

In her mind, "Measure X is a Band-Aid on a city that's already hemorrhaging. We haven't dealt with the underlying problem. If it at least was earmarked for street repair, but that would require a two-thirds majority, so instead, it's going to the General Fund. Does that mean the tax will go to support the Civic, which has been losing money for the past three years?"

Karen Delaney's response to such questions is to call them "red herrings."

"If a tax is dedicated, it requires a two-thirds majority, which is harder to get. And a dedicated tax is in perpetuity, which is almost always a bad idea. The state is a perfect example of the mess you get into when too much of your taxes are locked up."

Delaney believe anti-tax advocates have a deliberate strategy to mislead voters' perceptions.

"Their approach forces cities to go to voters over and over again and creates the impression that the city is always raising taxes, when it's not. It's a way to make democracy irrelevant. We elect a council to reflect our values. But by challenging fees, redefining them as taxes and forcing a vote, the anti-tax lobby undercuts local democracy and erodes confidence in local government."

Noting that the present franchise fee adds up to about $7.50 a month, and goes into the General Fund, which pays for city roads, firefighters and streetlights as well as restrooms, park, lifeguards, bike lanes and the Civic, Delaney suggests opponents of Measure X visit Mississippi to see what life without such fees/taxes is like.

'You get what you pay for. Local taxes are like belonging to a club. You pay your dues, you get your services."

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From the August 3-10, 2005 issue of Metro Santa Cruz.

Copyright © 2005 Metro Publishing Inc. Maintained by Boulevards New Media.

For more information about Santa Cruz, visit santacruz.com.

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