Tax Fever!

On Monday, the Oakland City Council will hold a special meeting to discuss a number of proposals to add new taxes (PDF) for the June ballot.

Let’s take a look at what’s on the agenda.

Temporary Parcel Tax

First off, we’ve got a “temporary” (five years) parcel tax. I put quotes around temporary because if you think they’re not going to be back at the ballot in five years asking for it again, you are delusional. Here’s the language (PDF):

Shall the City of Oakland establish a five-year temporary fiscal emergency parcel tax to preserve essential city services, including police services and technology, youth violence prevention, library services and parks and recreation services and other General Purpose Fund purposes?

This one is a general tax that we get to pay “for the privilege of using municipal services.” It’s $80 per parcel for single family homes, and $54.66 per unit on multi-unit properties. Owners of vacant units can get half off. There’s a formula for determining the cost on non-residential parcels, and owners of undeveloped land don’t pay. There’s an exemption for very low income homeowners, and a 50% pass-through to renters on rent controlled properties. Non-profits that own for-rent affordable housing would pay only half the tax per unit.

The money has no specific service it would be spent on — it’s just money to go to the General Fund for the City to spend on whatever. It is estimated to generated roughly $11 million per year

Councilmembers Ignacio De La Fuente and Libby Schaaf both noted at Rules Committee yesterday that while they were willing to proceed with scheduling the items for Monday’s Special Meeting, they were not willing to support the tax.

Transfer Tax Increase

Right now, the City of Oakland imposes a 1.5% transfer tax on sales of property. If this tax were to pass, the transfer tax would remain at 1.5% for the majority of properties. But for properties with a value of more than $5 million, it would be 2%.

The language (PDF):

Shall the City increase its real property transfer tax rate from 1.5% to 2% for transfers of real-property valued more than $5 million?

Again, this is just money that goes into the General Fund. This one needs only a 50% vote to pass.

I was actually talking to a friend about the transfer tax just the other day. He was suggesting the City come up with some kind of mechanism by which home buyers could pay their transfer tax over a period of three or four years, in order to ease the costs of buying a home.

I asked what the point of that would be, and as an example, he’s like “Well think about if you’re buying a million dollar home. You have pay $15,000 in transfer tax!”

Naturally, I was like “If someone can afford a million dollar home, then one assumes $15,000 is not going to be enough of a burden that they can’t do it. If it is, they should probably reconsider their decision.”

So. I don’t really care one way or another about having a higher tax on really expensive properties. Apparently, they did this recently in San Francisco? I don’t know, but that’s what someone told me today when I mentioned this proposal. Nevertheless, whether or not it makes sense to have a higher transfer tax on higher value properties in theory, I don’t see how this particular proposal makes any sense whatsoever. There’s no rational reason provided for doing this, only that it would bring in some money $1.6 million per year).

Telephone Tax

This is basically the same thing we had on the ballot in November. It failed. Will it pass the second time around? Who knows. Here’s the text (PDF):

Shall the City of Oakland establish a five-year temporary, fiscal emergency telephone “access line” tax at a rate of $1.99 per month per access line and $13.00 per month per “trunk line” to preserve essential city services, including police services and technology, youth violence prevention, library services and parks and recreation services and other General Purpose Fund purposes?

This one would be expected to generate $8.2 million per year for the City, except in the first year, when it would be more like $5 million.

Special meeting on Monday

Some people are against all new taxes on principle. They feel like the City already taxes them too much, or that tax money is never spent as promised, or the City is wasteful, or what have you. I am not one of those people. I am open to supporting new taxes for the City under appropriate circumstances.

However. Saying that we need money and throwing new taxes on the ballot at the last minute without talking to anyone about anything is not an appropriate circumstance. This is just totally random, and I struggle to see how anyone could reasonably expect such measures to pass.

So like I said above, the Council will be holding a special meeting on Monday to discuss the proposed taxes. The meeting starts at 5:00 pm.

In addition to the new taxes, the Council will also consider a proposal for a Charter Amendment that would make some adjustments to the way the pensions from the old Police and Fire Retirement System (PFRS) are handled. I don’t have time to get into it now, but I do hope to write a longer post about PFRS soon. For now, this memo (PDF) from Councilmember Ignacio De La Fuente explains the rationale behind the proposed Charter Amendment.

161 thoughts on “Tax Fever!

  1. Daniel Schulman

    I must be getting old — I remember when “temporary” meant only 3 or 4 years.

    5 years for a T-Tax seems really long even if it did not get extended.

  2. MarleenLee

    So, more taxes while the police still don’t have to contribute to their pensions? More taxes, while the size of the police force continues to decline? More taxes, with no promise of any improvements, or even maintenance of services? More taxes, with no accountability for how the money is spent whatsoever? More taxes, after the insult after insult we have been delivered with Measure Y/Measure BB? (Under BB, we were promised the problem solving officers back, one per beat, and now the City is trying to get around this by reducing the number of beats!) More taxes, while the PFRS problems remains unresolved? More taxes, while the City throws $750,000 away on an EIR for a baseball stadium that has no hope of ever being built? More taxes, while the City pays out million dollar verdicts for cops planting guns on suspects? More taxes, while the City settles a lawsuit guaranteeing that all City services will be provided in Spanish and Chinese, and pays out $400,00 in attorney fees? Meanwhile, I can’t even get access to public records in English! It just never ends.

  3. ralph

    I am wondering if this tax will prevent buyers of properties worth $5MM from buying those properties. :)

  4. ralph

    Does IDLF’s proposal have any numbers attached to it?

    In theory, I like a cap; in reality, I think even the Grinch would have a hard time capping at 2% after watching the escalation in gas, milk, and all other food stuff prices. The Grinch probably could probably with capping the increase as a percentage of CPI.

    The Grinch would have been ecstatic had IDLF proposed that all new employees be required to enter a DC.

    At least, I think that is how the Grinch would have felt.

  5. oakie

    “NO” on any tax proposal! First the city powers need to show fiduciary responsibility with all the money they control right now. And they most definitely have not demonstrated that. Giving them more money to waste is insanity.

  6. ralph

    I completed the state’s budget challenge and managed to come away with a surplus without increasing income and corporate taxes. Give me the city budget, with everything on the table including the sacred cows, and I promise, no I guarantee you, I can balance the city budget.

  7. livegreen

    Didn’t Mayor Quan take a salary cut in order to make an example for other elected leaders and employees? (especially the higher paid ones).

    If she took it just for herself, that’s admirable, but it has close to zero impact by itself.

  8. ralph

    LG,
    I believe all the other employers who could take a pay cut, took a pay cut. For some reason, the prior mayor thought that leading from the top was beneath him and opted to ignore his pledge to reduce his salary.

  9. Livegreen

    So how else do u propose reducing a $40 million deficit? Service cuts or taxes?

    Then there’s the other tens of Mil for PFRS. Do you propose another Bond, paid for by more taxes?

    When you say everybody who could took a pay cut, please explain? My recollection is most City employees were made to contribute +5% to their Pension (10% total?), and 5% furloughs. Keeping in mind they averaged about 10% ABOVE CBI in salary during the good times, that Oakland pays its employees quite generously compared to even richer cities, and that we have a much poorer tax base, I think there’s room for more.

    Remember, San Francisco unions actually accepted salary cuts last year while Newsom was still Mayor. Why should that not b an option here?

    PS. It’s true the small IT Dep. was greatly reduced, and City employees earning over $100K took additional salary salary cuts.

  10. ralph

    I would start with the following: cut sacred cows – such as children’s first, police contribute at least 9% to pension, for employees with 5 or fewer yrs convert to DC (assuming this should reduce the city’s benefits), no pay cut (excluding increase in pension contribution) should exceed 10%, eliminate expenses that have little benefit, increase user fees and fines that are not fully cost recovery, and outsource those jobs that can be less expensively by the private sector (eliminate those positions if you have to).

    What is CBI? Nonetheless, what happened years ago is sunk and doesn’t factor into today’s employee compensation. Do you penalize newbie because some oldtimer who has since retired dined on the gravy.

    I get the sense that compensation decisions were based on available dollars instead of what is the appropriate compensation for the position. I believe there needs to be an overall compensation strategy.

  11. len raphael

    IDLF’s modest proposal wouldn’t be needed if average cop compensation were cut because the PFRS retiree benefit can go down as well as up with current pay.

    What i don’t understand is how a substantial change can be legally made to a pension/disability plan consisting only of currently retired employees/beneficiaries?

    Everyone saying how you couldn’t change vested retirement benefits of currently active employees, but these are super vested benefits.

    V, i unnderstand your acquantance’s suggestion about transfer taxes, because the transfer tax in Oakland and Berkeley is a multiple of that of surrounding cities.

    Normally, transfer tax is split between buyer and seller, but heck even on a 300k value, that’s a lot of money for a lot of people who might just look elsewhere to buy than Oakland.

    -len raphael,temescal

  12. ralph

    Len,
    Thank you for reminding me about the real estate transfer tax split, wish I had remembered this the other day when I was having a conversation about the RETT. Typically only buyers of existing property have this leverage. One doesn’t have this option on new construction. Furthermore, it is a one time tax deductible expense. Are you really going to buy a place in Hayward to avoid this tax? No.

    The home purchasing decision is based on a number of factors and I suspect more of them pertain to one’s long term feeling about the place and community, not a one time only expense.

  13. Max Allstadt

    Marleen,

    A cop planting a gun on a suspect is an abomination and it’s understandable that the city would pay out a settlement rather than pay for the cost of litigating that. I believe, also, that the settlement you are referring to was $300k. Not “millions”.

    As for these taxes, I think they won’t pass, but if they do, it’s going to be because citizens decided they wanted them.

    There are better ways over the long term to cut costs, indeed. But they’re not going to come out of the Council. The council has no balls when it comes to making cuts and renegotiating contracts.

    We need to look at 2012 ballot measures that can be passed without politicians’ blessing. Pension reforms and contracting reforms can be charter mandated, and there are reasonable changes that are totally viable at the ballot box.

  14. Patrick M. Mitchell

    And who can we get to draft thse ballot measures re: pension and contracting reform? I am not qualified to do that – but I will happily gather signatures – daily if necessary – to put these measures on the ballot.

  15. Scott Yundt

    The transfer tax thing seems ridiculous to me considering there are currently no residential properties on the market for over $5 million in Oakland. Would this only apply to commercial properties then?

    I think it is going to be hard to pass without giving an explanation of what the funds will go for, especially when services will still probably get cut even if all of the new taxes are passed.

  16. MarleenLee

    Max, you’re right about the amount. However, the case was litigated. It apparently went to trial and the plaintiff was awarded $175,000. The rest was attorney fees. Therefore, the case was settled after it had gone to trial, and no doubt the City spent a bundle defending itself, over and above the $300,000 settlement. I’m all for the City putting on a vigorous defense to frivolous lawsuits, but when they’re in the wrong, they should acknowledge that from the get go. But of course I know from personal experience that is not their policy or practice. It just sticks in my craw that the City would ask taxpayers to foot the bill for their continuing follies and mismanagement, while no real paycuts have been negotiated with the unions!

  17. len raphael

    ML, as you said, we don’t want to discourage the City from vigorously fighting what i would guess are the many police related lawsuits that would be frivilous if it weren’t for the many local jurors prejudiced against opd the way navigator’s SF media are against oakland.

    i’d rather see they err on the side of litigating than settling so we can both boost opd morale and discourage the sue opd litigation industry.

    -len raphael, temescal

  18. len raphael

    Would think there are plenty of larger multi unit residential buildings coming up for sale that would be affected.

    Assume that the many projects that will be owned by non profit will all be exempt. But not sure how those are ultimately structured.

    The main problem i have with transfer taxes are that they are completely dependent on real estate cycles so they can’t be relied on for long term budgeting but are anyway.

    You collect the bucks up front, but the cost of servicing those new buildings’ occupants is permanent and rising.

    I also don’t like the corrupting effect they have on city economic development policy: it skews it toward increasing transfer taxes and not long term fiscally sustainable economic growth.

    -len

  19. Navigator

    We live in a country which spends 800 billion on the military budget hish is more than all of the other nations in the World combined and is also ten times that of China which is second on the list. If we just cut that in half we’d have enough money for an entire early budget for 400 cities the size of Oakland.

    Meanwhile cities like Oakland have to wait 80 years to pave its streets. Some streets in Oakland are nearing Mexican rural dirt road status. Oakland needs more money either through increased taxes or growing the local economy or both. Things can’t go on like this. I challenge anyone to drive a car or ride a bike on upper Broadway near the Highway 24 off west bound off ramp, or maybe Telegraph Avenue between 55th Street and 51st Street, or Elita Avenue near Bellevue at Lake Merritt or Jackson Street near Chinatown. These roads are a disgrace and are dangerous to anyone riding a bike, driving a car, or even walking.

    Oakland has no choice. Oakland needs to be progressive if it wants to take care of its crumbling infrastructure and its neglected parks.

    Oakland has a very expensive police force which is incapable of protecting the quality of life of its residents. It seems that the local graffiti terrorists decide to have a little tagging party at Oakland’s expense this week. They vandalize public and private property all over town without a worry of being apprehended. Please start your Oakland blight walking tour at Broadway and Mather Street across from Oakland Technical High School. You’ll notice the “Morse” building completely vandalized by huge graffiti. You can then proceed down Broadway and pay special attention to the 3100,3000, 2900 and 2800 blocks of Broadway. How do we expect new businesses like “3000 Broadway” to survive in this “Escape from New York” blighted environment?

    Also, the parks are an emberassment. The Lake Merritt improvements on Lakeshore and near the Pergola are already filthy and blighted. The new plaza and siting area near the Porgola is filled with gum stains, spiled drink stains, spilled paint stains and bird dropping stains. The paths on the lakeshore side have new graffiti, gum stains, graffiti on sitting areas, garbage cans, paths, signs and the plastic sheeting in the landscaped areas is exposed with the decorative wood bark strewned all over the filthy paths. This is so discouraging. This is supposed to be “Oakland’s Crown Jewel.” These conditions are allowed to fester week after week and month after month. As you walk towards the construction area on 12th Street you get the sense of the graffiti problem in Oakland. The ugly orange baricades and construction equipment are completely inundated with graffiti. The walls of the Oakland Museum become targets for these out-of-control graffiti addicts. As you walk towards the Kaiser Center you pass an Island of well kept paths and well manicured lawns near Lake Chalet. As you proceed around the bend across the Lake Merritt Hotel the ugly graffiti blight rears its ugly head once again. The benches, light standards, paths, signs, garbage cans and the small path leading to Kaiser Center and Christ the Light Cathedral are all vandalized with large graffiti.

    Also, Friday I attended the Art Murmur and also took the family to dinner at Flora. We walked Telegraph and Broadway from about 24th Street all the way down to around 15th & Telegraph near Bar Dogwood. There were thousands of people packing downton sidewalks as the Paramount Theater was also hosting nearly 3,000 people for their movie classic series. I spent nearly half an hour outside Flora waiting for a table to open up despite having made reservations. In short I spent close to 2 hours outside walking and standing around in uptown Oakland. Despite the thousands of people downtown and despite spending all that time walking aroiund, I didn’t see one cop the entire time. Not one cop in an entertainment area of a city with thousands of pedestrains walking around. I felt completely safe but that’s not the point. I’ve never been to a city where large entertainment areas with thousands of people go completely un policed. It’s outrageous.

    Oakland needs more revenue and Oakland needs to make sure this revenue is spent efficently to make Oakland a city that works for the quality of life for all of its residents. We need world class parks free of blight and graffiti and we neep paved streets.

  20. Dax

    Navigator…

    1. “Oakland needs more revenue”

    2. ” Oakland needs to make sure this revenue is spent efficiently”

    3. “to make Oakland a city that works for the quality of life for all of its residents.”

    These three sections of that extended sentence simply do not go together.

    If Oakland, the mayor, the city council, the staff, and the citizens focused on #2 and expanded efficiency to include creativity, then #1 would not be needed.

    Waiting for #3 to become a reality, dependent on #1 and #2, is saying to people you are helpless to change your own conditions.

    Further, since only a tiny amount of extra revenue will ever be received and since there is no incentive for increased efficiency, therefore the dirty, trashy, pot-holed city will continue well into the foreseeable future.

    January 15th, 2011—
    “On a warm Saturday morning, about 100 volunteers joined Oakland Mayor Jean Quan in East Oakland to undertake a block by block clean up of the neighborhoods around 85th and 98th Avenue.”

    Was any imaginative, near zero cost, resident run, program left in place such that those same streets remain clean today, 7 weeks later, or
    7 months later?

    Mind you, I certainly don’t minimize the magnitude of the problems, the needs, nor the demoralization of the local residents as significant obstacles.

    I also am amazed at some stretches of Oakland pavement, however I don’t have any reason to believe that “extra” revenue would go towards that purpose.

    Question…

    When was the last time a really creative solution to a problem or process was announced where the city would save $250,000 or where a city department could get by with 2 less employees while still handling the same work load.

    How often have you seen such news in the Tribune or elsewhere?
    It would seem there is no incentive for imagination where the results of such eliminate a city position.
    How many city positions are in place for fairness, diversity, going “green”, multi-language access, etc. etc…. compared to how many city positions are focused on money saving creativity and productivity?

    What, 100 to 1? Is there even 1?

    I know a task handled in Oakland with 5 trucks and 5 crews of 2.
    Less than 100 feet away, in another jurisdiction, the same task is handled by 1 truck, 1 crew of 2, and BTW, each of those are paid less than their Oakland counterparts.

    My estimate would be Oakland pays more than double the cost to handle the same task.

    The tools Oakland’s imagination turns to seem limited to
    -raise taxes
    -furloughs
    -cut services
    -buy new shock-absorbers
    -go solar

  21. Jeffrey W. Baker

    We already have the highest transfer tax of any place. It’s completely ridiculous. And, of course, totally unfair to say that if you can afford a house, you can afford the transfer tax. If you just saved for a decade to make the down payment on a basic house in a decent neighborhood with a public school that isn’t literally a prison, getting slapped with the 10,000-to-15,000 dollar transfer tax is just another slap in the face. You can’t finance it, either.

  22. Navigator

    The problem is that Americans have been brainwashed by the far-right that anything “public” is a bad thing except for the military which is extremely bloated to the tune of 800 billion dollars. This is more spending then the ENTIRE World spends on their military budgets combined. That’s the problem. We want cities to get by on scraps and are OK in denigrating public workers while being concerned about the profit margins of the corporate fat cats who “create jobs” overseas.

    It’s time that we spend money to improve our cities and invest in our crumbling infrastructure and in our deplorable parks. If the politicians weren’t being held hostage by Hee Haw Nation and their warped and manipiulated view of the World, we wouldn’t be talking about third world road conditions in Oakland and in cities all over the nation. Meanwhile, Oakland has to be progessive and invest in its parks, libraries, public spaces, roads, sewers, tree maintenance, public safety, etc. The right needs to remember that they use roads, bridges, public transit, public education, sewers, utilities, water, public health, etc. Public workers are not evil villians. Public workers are crucial in maintaining an attractive and liveable city.

    Oakland needs far more money in its budget. There’s no way that a budget just north of 400 million dollars is enough to keep Oakland and any similar size city in good repair and well maintained. Republicans have squanderd our money on wars and on a huge bloated military budget which if cut in half so that we spend only five times what China spends instead of ten times, would save so much money that our cities would each look like Paris.

  23. Dax

    “Oakland needs far more money in its budget.”

    “Public workers are not evil villains.”
    ( I guess contrary to what everyone here has been saying daily)

    “Meanwhile, Oakland has to be progressive and invest in its parks, libraries, public spaces, roads, sewers, tree maintenance, public safety, etc.”

    OK… what do you suggest?

    Shall we hire more employees, or just pay the ones we have higher salary, more benefits, and greater pensions?

    How about new revenue.
    What would be a appropriate new parcel tax to cover the above.
    $500 per house?
    $1,000 per house?

    Or just “click our heels three times” and transfer some of that 800 billion defense budget to Oakland’s accounts.

    Keep in mind, that the total number of Republicans in Oakland could fit into 4 large minivans, so they won’t stand in our way.

  24. Navigator

    Oakland and all large cities across the Nation are in a tough situation. As long as we invest as a militaristic nation our cities will continue to struggle to maintain essential public services and to also improve the livability of their respective municipalities.

    For Oakland the solution has to be to increase taxes and grow the local economy. Oakland has to struggle like every large city. It’s a shame that we have such screwed up prioroties as a nation. The other thing Oakland has to do is increase the number of volunteers in the city. No one is going to bring a business or invest in a blighted city with blighted parks and horrible roads. You have to make investments in order to make yourself marketable to businesses and to residents. It’s no secret. You can’t skimp. Oakland should be increasing the number of gardeners at Lake Merritt and throughout the city. The parks and street mediums should be clean and well manicured. The streets that resemble third world conditions need to be paved. The graffiti on buildings, walls, street signs, gargabe cans, needs to be removed and the vandals need to be apprehended and held financially responsible for their damages.

    It looks like Oakland needs more public employees, not fewer. Either that, or the people who complain about higher taxes need to get out there and contribute their time to make sure that the streets are clean and the parks and mediums are well maintained. Also, business owners downtown and all over the city should be required to sweep and hose down their portion of the sidewalks every single day.

  25. Dax

    “For Oakland the solution has to be to increase taxes and grow the local economy”

    Difficult twins.

    “It looks like Oakland needs more public employees, not fewer”

    They cost $100,000 per year each for their full package (average)

    “The other thing Oakland has to do is increase the number of volunteers in the city”

    How about a individual resident taking responsibility for just their own block, both sides of the street. Typical about 5 to 10 houses in each direction, on both sides.
    Time to walk that every few days, about 5 to 10 minutes maximum.
    After the initial week, fairly minimal build up, unless someone does a large dumping.
    Otherwise essentially clean 98% of the year.

    Left to a $50/hr. city worker, or a city sponsored “clean-up day” your street will be dirty 90% of the year.

    Who knows, a few of those dropping trash might even do so a bit less frequently if they see a neighbor picking it up.

  26. len raphael

    Nav, when was the last time you left the Bay Area and avoided other large coastal cities?

    You really think that most Americans would spend the savings from military cutbacks on funding retirements of big city employees and failing infrastructure, let alone anti violence programs, when they are much more concerned with funding Medicare and Social Security, then explain your revealed knowledge.

    Reminds me of the SEIU rep i met a few weeks ago when i asked how SEIU expected Oakland to pay the promised medical benefits to employees who can start retiring in their fifties and live to their 80′s.

    Reply was universal health care. When i asked what if that doesn’t happen, he smiled and said march on Washington.

    You really should move back to Oakland where an amazing number of people think the same as you. But then they also thought Obamba was going to pull out of Afghanistan.

  27. len raphael

    Dax, there is no way our personnel costs are going to drop enough without at least the threat of outsourcing.

    Unlike WI and IN, the push here for that won’t come from the people in those 4 minivans, but from the non-profits and their clients who are going to be seriously po’d at getting sacrificed for union retirements.

    Already saw some of that at Pat K’s neighborhood budget meeting a couple of months ago. i was stunned to hear a woman ask why we couldn’t outsource many of the social programs the way Concord and WC do, where she runs a non-profit service agency providing better services at a fraction of cost that those cities used to do.

    -len raphael, temescal

  28. SLO_Town

    I agree with Navigator that business owners should sweep their sidewalk everyday. I never understand why they wouldn’t want their business front to look as clean and tidy as possible.

    One thing about cleaning graffiti, a month of so ago some tagging turned up on a speed limit sign in my neighborhood. I drove and walked by the sign many times wondering why it hadn’t been cleaned. So I finally decided to report it to Public Works online, and within a week it was cleaned.

    So I wonder if cleaning graffiti on public property is simply a matter of it being reported or if it has to do with what neighborhood it is in?

  29. LoveOakland

    The city’s general fund is about $200 million. Police and Fire are about 2/3 of that, leaving about $50 million for everything else. The deficit is about $45 million. Fire has already made concessions as have the city’s civillian unions. Police have delayed a pay increase of 4% until 2013. City employees (other than P&F) take home 10% less than they did two years ago and are earning about what they made in 2005. SF employees got a 3% pay increase two years ago but took a 4.6% pay cut.

    Do the math. Unless Police step up to the plate to do their share and residents enact some revenue, all that will be left is P&F plus a few employees to do their payroll and clean the police stations.

  30. livegreen

    re.PFRS, this true?
    RETIRED OAKLAND POLICE OFFICERS ASSOCIATION

    FOR IMMEDIATE RELEASE
    March 5, 2011

    The Retired Oakland Police Officers Association (ROPOA) speaks out. Today, the ROPOA took exception to the manner in which various funding issues associated with the City’s Police and Fire Retirement System (PFRS) are being represented to the public. Bob Muszar, president of the ROPOA, stated: “the PFRS funding issues facing the City are serious and challenging but the citizens of Oakland deserve to know the truth. PFRS retirees and the benefits they receive are not the cause of the City’s financial problems.” “The City’s 2011 contribution to PFRS will have absolutely no impact on essential City services (the General Fund) nor will it add one single penny to the City’s 2011/12 budget deficit. Any representations to the contrary are false and misleading,” said Muszar. “As the City weighs its options going forward, it is essential that the public have accurate information regarding the performance of the 1997 Pension
    Obligation Bonds and the nature of the 2011 PFRS contribution,” said Muszar.

    How did the 1997 Pension Obligation Bonds actually perform? In 1997, when the Pension Obligation Bonds (POBs) were issued, the City used the proceeds to make a lump-sum contribution to PFRS and negotiated a 14-year window during which it would not be required to make annual contributions to the system (the “Contribution Holiday”). The staff report that was presented to the City Council when the POBs were issued projected that the City’s contribution at the end of this Contribution Holiday would fall somewhere between $44 million and $48 million. The $45.6 million contribution due in July 2011 is exactly where the City predicted it would be back in 1997 when the bonds were issued. “It is correct to state that the 2008-09 economic downturn had a negative impact on the 2011 contribution. The downturn increased the 2011 contribution back to what it was originally projected to be. Had it not been for the downturn, the City’s 2011
    contribution would have been far less that what had been projected back in 1997″, said Muszar. Muszar went on to say, “bottom line, the 2011 contribution was accurately projected in 1997 and the City has had 14 years to prepare for it.”

    What about the July 2011 PFRS contribution? “Numerous sources have incorrectly informed the public that the 2011 PFRS contribution has contributed to the City’s 2011/12 budget deficit and it will negatively impact the City’s General Fund. Both these representations are false,” said Muszar. In a letter to his fellow Council members dated March 7, 2011, Council Member Ignacio De La Fuente wrote: “…The City’s General Fund does not have the capacity to make the required $45.6 million PFRS payment on July 1, 2011.” “The representation that this contribution will come from the General Fund simply is not true” said Muszar. Muszar added, “If you don’t believe me look at Table 2 on page 11 of the Finance and Management Agency’s February 22, 2011 report to the City Administrator. This report was presented to Mr. De La Fuente and the City Council Finance Committee on March 2nd. It verifies there is no General Fund
    contribution required in 2011/12. Not only that, the report clearly demonstrates that the General Fund support for PFRS never reaches the $45.6 million reported by Mr. De La Fuente.”

    How can that be? The City collects, and will continue to collect through 2026, property tax override revenues that can only be used to support PFRS contributions. During the 14-year Contribution Holiday tax override revenues were used to pay debt-service on the 1997 POBs. In each year of the Contribution Holiday these revenues exceeded the amounts needed for debt-service on the POBs. Instead of depositing these excess revenues with PFRS, the City has been stockpiling this money in a separate account. As of January 31, 2011 the City had accumulated $74.6 million in this account. By June 30, 2011 accumulated excess property tax override revenues could exceed $100 million. “Right now, the discussion should be focused on how to best use the accumulated tax override revenues,” said Muszar. “Instead, some of our elected leaders seem more focused on their attempts to dupe the public into believing the 2011 contribution is going to come
    from the General Fund. Or worst yet, that the 2011 contribution is the source of the City’s 2011/12 budget deficit. Neither of those statements is true and they know it,” said Muszar

    What about the Proposed Charter Amendment? “Well, there are two answers to that question”, said Muszar, “the ethical and the legal.”

    “Ethically, the overwhelming feeling of our members is one of betrayal. Up until now the police members of PFRS have supported every PFRS related Charter change the City has advanced to the voters,” said Muszar. “In 1976 when the City Council decided it was best to close the system, we supported them. In fact, police members of PFRS went door-to-door campaigning in support of the City Council’s proposal. In the early 1980′s when the City Council decided to extend the PFRS funding window from 2016 to 2026, we supported them. Later, when the City Council decided to change PFRS investment guidelines to the “prudent investor” standard, we supported them. Now, after we’ve met all of our obligations; made all our contributions; and, kept all of our promises; Mr. De La Fuente is proposing that the City Council renege on theirs. It’s not fair and it’s not ethical.” “The average age of a PFRS retiree is about 71. The
    average age of a police widow is 79. More that 30% of our members are in their 80′s and more than 40% of our widows are over 85. We held up our end of the bargain. Now that we’re old and unable to replace the lost income, the City has to hold up its end of the bargain,” said Muszar.

    “Legally, the proposal simply does not pass muster,” said Muszar. Muszar added: “Without getting into lots of detail, there is a substantial body of law that has developed over the years around this issue. Most of these cases deal with the contract provisions of the state and federal constitutions. The City Council simply cannot do what Mr. De La Fuente is proposing, not legally anyway.” “If the City proceeds down this illegal, ill advised path, the ROPOA will have no alternative but to fight. In the end, we will win. In the end, Mr. De La Fuente’s proposal will prove to be nothing more than a squandering of taxpayer dollars and a precious loss of time that could have been spent developing real solutions,” said Muszar.

    What is the ROPOA saying? “We know there’s a funding problem and we believe it’s a big problem. But, it’s not a problem of our making, nor is it a problem that will have immediate impact to the General Fund. We’re not interested in pointing fingers or playing the blame game or spending all of our time looking in the rearview mirror. We are prepared to roll-up our sleeves to work cooperatively with the City to develop mutually acceptable and legally permissible solutions going forward. That’s been our history with the City and the sooner we get started the more likely we are to succeed. The only thing we’re waiting for is the offer of a seat at the table,” said Muszar.

    Additional Information: ROPOA representatives are in possession of further background information and materials in support of this release and the issues it addresses; including extensive legal research materials. Mr. Muszar can be reached at (209) 293-1328 or (209) 642-0656 to arrange an interview. He also will make himself available for face-to-face interviews on Monday, March 7 beginning at 10:00 a.m.

  31. Charles Pine

    A proposal for a parcel tax with nothing about where it will be spent — stunning. And from the same Quan who broke her promises about Measure Y parcel revenues (more police – nope, fewer), about how Measure Q parcel revenues (more library service – nope, less), …

  32. Dax

    Charles, the library parcel taxes of the past are instructive on how the city handles money for “promised” purposes.

    First they took money out of the library, then issued warnings that the library would have to reduce hours and couldn’t purchase books.

    So we passed the FIRST library parcel tax that was suppose to keep the library budget sound for 10+ years.

    A few year later suddenly they were back claiming they were in deficit, needed a SECOND parcel tax or would have to cut library hours and once again, couldn’t purchase books..

    So I called their head accountant, financial guy, wondering what happened to the 10+ years of promised financial fitness.
    He said everything was fine and financially sound until the “pay raises”…
    No, not the normal annual pay raises in the contract, but the “special” pay raises for all but the lowest untrained staff.
    It seems the library saw fit to have a special additional raise to place Oakland’s library personnel on par with some 5 other Bay Area cities..
    Like Palo Alto, San Jose, etc.

    The result of which was that nearly all staff received a additional 14% to 18% raise…on top of their normal annual raises.
    Like getting 2 extra months pay even though the money wasn’t there to afford it.

    Instantly the 10 year sound financial forecast promised by the FIRST parcel tax boost went awry.. and the library was headed for deep deficits again.

    So they lied to the voters, who had forgotten their previous promises, never told them abut the massive “special” pay raises, and told them once again the library couldn’t buy books.

    The SECOND library parcel tax passed and then the library was all set..
    Except the city once again began taking away normal money from the library.

    You cannot trust this city council, nor the mayor, with what they promise will be the use of the money.
    Flat out, they pervert the truth and break their promises.
    Over and over and over.

    Huge hidden things happen in Oakland.
    Huge hidden pay raises, like the 18%.
    Huge hidden pension boosts, like the 35%
    99% of the voters are completely unaware when tens of millions of dollars are simply contractually “promised” away by city leaders who seemingly can’t operate $5 calculators.

    They tug on the heart strings of unsuspecting voters, or play the fear game.

    Finally I’m beginning to think the voters are waking up, wondering why they are driving home over pot-holed covered streets after working 40+ hours a week at age 64, when city workers of the same age are years into retirement after working 37.5 hour work weeks.

  33. Max Allstadt

    Part of the reason we’re running over potholes is because there’s millions of dollars of dedicated street improvement money that’s being hoarded in the remains of politicians’ paygo accounts.

  34. Matt C.

    SLO_Town, yes, when I report something to Public Works it gets fixed in a timely manner.

  35. Dax

    In all fairness to my comments about the library raises above, I do have to admit that as a city department, in 2009, they had only 12 employees who made in excess of $80,000 per year.

    As to the pay of the next 100 or 200 I can’t make a fair opinion, only that compared to other city departments, there aren’t as many high earners as I might have anticipated.

    This might be due to the franchise nature of individual libraries, each one being its own unit.

  36. Naomi Schiff

    Library employees’ pay is quite reasonable, and the library also uses part-time and flexible-schedule staff so that they can be open more than just regular 9-5 hours without incurring overtime charges. The library serves a huge number of residents, compared to many other departments. And usage is up. In addition, libraries help create neighborhood cohesion. They serve as community gathering places, safe places for kids and adults, and represent a positive outreach from the city (compared with, say, parking tickets).

    Marleen, I hear your fury but I don’t see a clear proposal on how to balance the budget. What are you suggesting?

  37. MarleenLee

    Here’s my proposal: police contributing to pensions: $7 million.
    Ballot proposal to eliminate Kids First: $10 million
    Negotiate pay and benefit reductions with all other public employee unions of 10% – I’m guessing another $20 million?
    Get rid of PayGo: $1.5 million
    That should at least get us close.

  38. ralph

    I am suggesting that the the police officers pay the 9% and we put an end to the unfunded mandates during fiscal emergencies. When a complete balanced proposal is in place, then and only then, will I consider taxes for specified services. Until then the likelihood of me agreeing to more taxes is slim to nil and slim just left town.

    I would also be more inclined to support a new tax if it had a declining annual obligation. If the idea is to fill the gap created by recession, then as the tax revenue improves, I should not have to pay as much. Furthermore, the recovery point is not the high point tax revenue but the sustainable revenue.

  39. livegreen

    City Councilmembers have already stated either the City Council won’t take the lead on this, or, have inferred they don’t agree with City Employees taking cuts (at least the Mayor has).

    That inference comes in the form of the current Tax Proposal. I believe the supporters of this tax are responding to their supporters, the Municipal Unions. In addition this puts any politician supporting a roll-back in a difficult and isolated position in future upcoming elections. And this combination is why Oakland is in such a Catch-22.

    What I’m amazed by is that the Unions don’t want to chip in, even when seeing that they’re giving back the increases +10% above CPI that at one point they didn’t have. (Increases can exceed the CPI in good times, but then they should give them back in bad times).

    Re. eliminating Kids First, you all can proposal all you want, but it’s not going to pass. A roll back (rolling back to the previous amount), however, might.

    Ironically, a partial cut could do Kids First programs some good by making them more sustainable.

  40. Navigator

    It has to be a combination of tax increases and some cuts. However, Oakland shoudn’t become a shrinking violet. Now is the time to invest in the city and plant those seeds so when the economy turns around Oakland will be an attractive city for investors and for businesses who want to expand.

    Let’s repave our worst roads. Let’s get rid of the graffiti and blight. Let’s market and promote the city. Oakland has done amazingly well with the restaurant and entertainment scene despite the terrible national economy. Oakland needs to go after other industries in the same way. Oakland has many natural advantages and the city needs to be aggressive in going after businesses. I’d start in San Jose.

    A robust economy will stop the vilification of public employees. That’s the answer.

  41. Dax

    One side effect of having the police officers pay the 9% will be the following.

    I’m not certain when calculating the “highest years pay” how far back you can go, or which year(s) you can use.
    Is it currently highest single year of pay?

    Anyway, currently that 9% paid by the city is ADDED to their salary for computation of their highest years salary.
    Thus turning 30 x 3% x 100% of salary into 90% of base for pension –>into 30 x 3% x 109% of base salary equaling 98.1% pension.

    If that 9% is paid by officers, it will make big sense for many of them to retire, even if they have not reached 30 years.

    First, depending on which year is used, it will eventually reduce the “highest year” by 9%. Second, they will have to pay that 9% themselves.
    I can’t do all the math, but it may make sense for some officers to retire at 27 or 28 years instead of staying until they’ve got 30 years.

    Nevertheless, it has to be done at some point. High retirement rates in the first couple years, could make way to hire/rehire all those laid off officer who are still available…. even if staffing levels remain where they are.

  42. ralph

    Nav,
    I agree now is the time to invest but the only thing I hear is the patient is bleeding must stop the hemorrhaging. I don’t hear a plan for the future.

    In the private sector, employers make the numbers either by cutting employees (100% savings) or some reduction in benefits (>0% – 100%). It is time for the city unions to do the same. (Note: I will be honest I generally do not support paycuts in excess of 10% for indefinite periods of time.)

    Why should kids get a raise when their parents are losing jobs? Apply your airmask before helping your neighbor.

    LG,
    I disagree with you pay stmt. It is not okay to give away the farm during the good times. Because as sure as night follows day and spring follows fall, recession will follow boom.

  43. MarleenLee

    Looks like the San Jose unjions are ready to take a 10% paycut. http://www.timesheraldonline.com/ci_17556055
    Why can’t Oakland catch a clue? As for increased taxes, well, according to my most recent property bill, my taxes went up nearly 8% last year!!!! I am now paying more in taxes (even after the income tax deduction) than I ever paid for rent on my (rent controlled) apartment in Berkeley. All so that public employees can keep buying their second homes, retire in style, get their second jobs, etc. etc. No way.

  44. livegreen

    I really don’t understand why asking public employees to take a cut in a recession = vilification. The unions seem to be using this term as a negotiating tactic to avoid compromise.

  45. CitizenX

    Marleen, you can take credit for approx. $15 million for Kids First, according to the budget docs. Ouch.

  46. Navigator

    Livegreen, It’s no secret that the right wing in the United States has been vilifying unions and government workers. I don’t understand the idea of begrudging workers of rights and benefits which they’ve won by fighting hard over the years. We should all be striving to have the same benefits as some union members. Why begrudge working people? I seriously doubt that Oakland’s tree trimers, street sweepers, metert maids, public works workers, gardeners etc, are living lavishly. In the Bay Area you can have a household income of 100,000 and still struglle if you have a family. I doublt most Oakland public workers other than police and fire approach anything close to 100 grand. And what’s wrong with having well paid people living in your city and contributing to the economy? Of course the police situation is a different story becuase they make much more than the average worker and 90% live outside of Oakland. Therefore Oakland gets hit with the double whammy of paying out large salaries which end up being spent in Pleasanton and Dublin.

  47. livegreen

    Navigator, Maybe you understood but since you skipped right over it, I’ll ask again, this time in the form of a question (since I notice I didn’t put a ? in as intended):

    Why is asking public employees to take a cut in a recession = vilification?

    Care to answer the question instead of brining up 4 or 5 more points that have nothing to do with the argument at hand?

  48. Ivan

    These union workers are already resigned to having wages and benefits cut in order to fund wars, bailouts, bank CEO’s bonuses.

    What they consider as “vilification” is having their right to collective bargaining taken away altogether. Not to mention giving their employer the opportunity to decertify their Union through an yearly election set by law.

  49. Dax

    Ivan’s post is a classic this year.

    Of course he is not talking about Oakland details, but instead conflating Wisconsin with the “plight” of Oakland public employees.

    Unless you haven’t noticed, every public employee union has clambered onto the Wisconsin train, equating their own situation and bargaining as equally threatened.

    We’re talking about Oakland, yet if you question any aspect of the current pay, benefits, or pensions, you are anti union..(all unions).. Anti worker. Anti middle class, you probably hate children and kick dogs whenever they come close.

    Conflation seems to be the operative word here.

    Not even limited to Wisconsin state labor issues, but nearly always throwing in the “kitchen sink” assortment.. wars…bailouts…banks CEO bonuses.

    Seeming to forget that it will be Oakland residents who will be paying the proposed parcel taxes. Most of whom are earning less than the city employees they are being asked to support.
    Not Dot-Com millionaires, not bank CEO’s, nor Pentagon Generals… just regular residents and homeowners….85% of whom are NOT Republicans.

    One wonders if those running their flags up their respective poles are even aware of the actual salary, benefits, and pension details of Oakland workers in specific job titles or departments.

    Navigator would have us declare a Oakland street sweeper as struggling to put food on the table.

    I wish Navigator would tell us what fair pay is for a worker who drives one of those machines around 37.5 hours each week.

    While your at it, tell us what portion of his base pay he should receive after having worked from age…say…22 to 57 (about 10 years earlier than others have to work to gain full Social Security).

    So Navigator… The street sweeper.
    1. Fair pay for a 37.5 hour week.
    2. Percentage fair pension at age 57
    3. Total annual compensation package we can afford for him/her to clean the streets.
    (salary + benefits/pension)

    How about you give us Navigator’s idea of what would be appropriate for the Street Sweeper or Tree Trimmer you mentioned.

  50. len raphael

    LG, I wish i had the time to dig into the pfrs issue more, but my understanding is that Muszar is correct that the approaching PFRS disaster was known for many years and ignored.

    He’s correct that the city’s finances were in deep trouble regardless of PFRS.

    What I am unsure of is his analysis of the tax overrides and the accumulated amounts.

    That’s important to understand. Any volunteers?

    His assertion that there are no legal grounds for changing the terms of a vested pension plan for retired beneficiaries (without filing Chapter 9) is consistent with everything i’ve read on the subject.

    When he states that the proposal would reduce the income of retirees, he’s posturing.

    In another post, he pointed out that the retirees benefits can go down as well as up based on current employee compensation. i would assume there’s a floor, but don’t know.

    Whose got a link to the Feb 2011 document?

    -len raphael, temescal

  51. len raphael

    Marleen, does San Jose have a charter forbidding outsourcing like Oakland’s?

    i assume they don’t.

    If not, that would explain their union’s willingness to take cuts.

    -len

  52. len raphael

    Marleen, did JQ get an opinion from Russo that the proposet parcel tax was a special tax?

    Read you blog posting, are you saying that the main legal flaw in the proposed tax is that it is not dedicated to any particular use with separate accounting for its use?

    So all JQ would have to do was dedicate the tax to say Kids First anti violence programs and keep an accounting?

  53. len raphael

    Good to see that Schaff opposes the proposed transfer tax increase. Any other council members announce opposition?

  54. ralph

    Len,
    The RETT was pulled from agenda because the council did not pitch shut out on the fiscal emergency question.

    If anyone objected to it, they did not need to go on the record.

  55. len raphael

    Looks like credit for defeat of the RTT and the phone tax goes entirely to IDLF according to the chron. So did Schaff cave at the last minute and vote for the RTT?

    I don’t understand why Pat K is back to her old routine of saying the right thing but voting the wrong way. Voting for a parcel tax that
    a. is probably illegal
    b. is not targeted at supporting core services
    c. before substantive fiscal reforms are enacted
    d. gives higher priority to protecting city employees and non profits than residents.

    Without the abilty to threaten outsourcing, unions will take layoffs over compensation cuts every time.

    The public gets stuck with expensive bad service.

    Just like AT&Tcell phone service.

    -len raphael,temescal

  56. ralph

    Len,
    As far as I know, the council did not vote on the RETT and the telephone tax. These matters could only go to the voters if council was unanimous in its decision to declare a fiscal emergency. It was not. As such, these matters could not go before the voters; thus, no need to discuss and vote.

    I think both the K’s made good points about the parcel tax. First, RK indicated that the oters really need to see the budget well in advance of the election. I am of the mindset, we know everyone needs to make some contributions to deficit reduction but when it appears that only one group is making the sacrifice it is going to be difficult to obtain buy in. Second, PK filled in the specificity needs. But here is the thing: 1) some are going to vote for the tax on GP because there is a revenue gap, 2) others will vote for it because they will not feel its full effect, 3) business will support it because it makes sense, and 4) the wildcards. I think the wildcards will only vote for either a package that is clear in how funds will be used, a package that does not overlap other dedicated taxes and funding sources, or both. Question is, is a wildcard willing to cut off his/her nose to spite his/her face…

  57. Marleen

    Len
    They called it a “special tax” because all parcel taxes must be. But after they got my email they worked like mad to make a bunch of changes so now the money does not go into the general fund and can only be used for the purposes designated, which is still everything, but it is pathetic that the proposal was so obviously riddled with legal defects. I could have held my tongue until after they voted but suing them over and over is getting old.

  58. len raphael

    Ml, so council made it a special tax by expanding the list to include a kitchen sink list of uses :)

  59. Livegreen

    IDLF is right, per today’s Tribune article, the vote to put the $80 parcel tax on the ballot is “Business as usual”. It is refreshing to see Libby vote against this. I agree with Len, I don’t understand why Pat K. talks like a moderate but doesn’t vote like one. Same with Rebecca K.

    Note this election would cost Oakland $800K to $1 million. Of course since the Republicans are stalling on the election anyway it’s probably a moot point. (Which is really bad for the schools).

    If the special election does happen, it will come down to how many home owners vote for the tax. I’d b curious what the % of voters (as opposed to residents) are homeowners, though of course all the wealthy, elderly beneficiairies of Prop 13 have a lot more room to pay parcel taxes than we, younger, high property tax paying middle class homeowners are.

    Was t

  60. Livegreen

    The 50% pass through to Renters means renters will have to pay too. This might also change the equation…

  61. len raphael

    LG, all that means is that the landlord is allowed to try to pass thru the allowable portion of the parcel tax.

    ie. if the rent on a RAP unit is already at market, no way is a landlord going to pass thru the tax without risking the tennant starts looking for cheaper digs.

    for the below market rate RAP units, yes it will be passed thru if the landlord does all the paperwork.

    On the other hand, the most important thing is the perception by tennants that they will pay the tax. That perception will make for a more reasonable voting decision.

  62. waltsson

    @DAX, employee contributions to Calpers do not affect their last highest year computation. Whether the employee makes thier own contribution or the employer makes it as part of a collective bargaining agreement (i.e. in lieu of a pay raise).

    This will change the employees net take home pay. Retirement is calculated based on gross base pay and sometimes special types of premium pay recognized by Calpers

    Speaking from personal experience there is more to the decision of retirement than maximizing you retirement formula. For what it’s worth

  63. ralph

    waltsson,
    Dax was referring to employer paid employee contribution, which are included in the highest salary calculation.

  64. Livegreen

    In other news, the murder rate so far this year is up from 12 in 2010 to 22 the same date in 2011. An increase of about 80%.

    We’re only a little over 15% into 2011, but it speaks to the decisions of Elected Officials “Business as Usual”. If anything close to this continues as the year does, it will only become a bigger political issue.

    What’s even worse than the stats is real lives are at stake. While the City Council delays hard fiscal decisions (with solutions that probably won’t even get voted on), they’re delaying finding money to pay for services that will help save peoples lives.

  65. waltsson

    Ralph,
    employee contribution has no affect on calculation of highest year.

    the calculation is based on Base Salary plus certain premium pay

  66. CitizenX

    waltsson, employee (member) contributions have no effect, but employer-paid member contributions (EPMC) are included as part of the employee’s final compensation. In the case of Oakland police officers, the 9% EPMC bumps final earnings by the 9%.

  67. Dax

    Waltsson,

    You are incorrect according to the people I have talked to in Oakland HR and in pension related department . There was no mistaking the information they gave me and I was not speaking only to some clerical people who may have been misinformed.

    In Oakland, the 9% police employee contribution paid by the city, for what ever reason, has indeed made that 9% a addition to their base salary and has been added to their base salary for the purposes of calculating highest years salary.

    Thus, a 3% x 30 years is transformed into a 3% x 30 years x 109% of base salary.

    Or, a 98.1% pension instead of the advertised 90% pension.

    There was a bill AB 1987 last year which “may” have included a provision to do away with that practice, but that so-called pension reform bill was vetoed by the governor.
    Currently the practice of including the employee share, paid for by the employer, is still in place.

    Where do you get your information that it is NOT included?
    I have been very specific when calling Oakland to find out my version of the facts.

  68. waltsson

    Dax is there a different place to continue the discussion. I do not want to hijack this thread

  69. waltsson

    Dax is there a different place to continue the discussion. I do not want to hijack this thread

  70. ralph

    waltsson – you can take it to open thread. Type “open thread” in the search box in the upper right hand corner

  71. len raphael

    lg, don’t know how onerous the paperwork wb to raise rents on RAP units for the allowable portion of the proposed tax. Probably not a big deal for a big well organized landlord. Probably a royal pita for owner of a 4 plex who will fail to file notice properly or some such and lose when challenged by a tennants right counselor.

    There would have to be a regulation to steamline the passthru process for it to work as intended.

  72. Max Allstadt

    As far as I know, there is no pass through mandate in the proposed tax. Mayor Quan’s statement to that effect was incorrect.

  73. Barry K

    LG: “It is refreshing to see Libby vote against this.”

    At the CC meeting, Libby said she supports this tax, but, not through the costs associated with a special election. Therefore, if the special election happens, does this mean she will continue to support it?

  74. Barry K

    V- Libby clearly stated she did not support spending $800k-$900K+ for a special election. She did state she supports the tax, but, not by a special election. She voted “No” because of the costs of a special election. She clearly stated she supports the tax, but, not by these means.

  75. ralph

    I think LS makes some great points regarding the rush to legislation. As much as I am against taxes, I am not fully opposed to some tax but you can not rush the measure to the people. If the measure is clear, then I am not opposed. That being said, I am highly unlikely to support a measure that pays for non-essential city services, includes provisions to pay for programs covered by other tax measures and includes blanket other services.

    If the city can write a measure that pays for essential public safety services, technology services – including library and improvement to the city’s online presence, then you have my vote.

  76. Naomi Schiff

    I don’t think a public safety tax can pass without some action on the part of the police union. If they would step up at least on the retirement contributions, it would be a lot easier to defend a new tax. I fail to understand their strategy.

  77. Dax

    Well, if you are any of the most senior 90% of the police force you have economic reasons to not change things.

    You won’t be laid off.
    You won’t have to pay the 9% contribution
    Your “highest” year will be 9% higher, resulting in a pension that is 9% higher for 25 years or more.
    You may even get more overtime if a number of junior officers are let go.

    From a dollars point of view their position could be very clear.

    BTW, a 9% higher x 25 years retirement, amounts to an extra 2.25 years of pension.
    Perhaps from $200,000 to $300,000 extra.

  78. ralph

    Naomi,
    I agree that a public safety tax will be difficult without some contribution from the police. Accordingly, I think that it imperative that the voters be presented with a full and comprehensive plan to balance the budget prior to an election. I fully believe that we are in this together. I am not willing to vote in favor of a public safety tax if the police have not agreed in principle to up their retirement contribution.

  79. Naomi Schiff

    City council needs to tell us how many officers they will have to lay off, I guess. We are going to end up with a quickly diminishing, nonyoung, wealthy bunch of officers who are only fit to work in the office. Cf the deskjob-shaped Mr. Arotzarena. Even though I am well past police retirement age (but of course still working) I imagine I would beat Dom in a footrace.

  80. MarleenLee

    The parcel tax as written is basically a slush fund. They managed to make some last minute changes (in response to my letters) to make it barely legal (I think, I haven’t reviewed the final version) by specifying some generic services, but let’s not fool ourselves – they’re going to spend the money on whatever they feel like spending it on. Patching budget holes wherever they may be, basically. So basically, you are paying to fund the police union’s overly generous pension plan. You are paying to fund the PFRS overly generous pension plan. You are paying for the one year of salary and benefits for the police officer that the City wrongfully terminated, etc. etc. Sorry, I ain’t voting for any of that to come out of my pocket.

  81. Barry K

    Thank you for your efforts Marleen! It’s all about feeding the “general fund” pig. Please send the City a bill; this shouldn’t be ProBono. Thanks to DeLaFuente for voting against the “fiscal emergency”and blocking Quan’s money-grab attempt with her phone tax scam (again!) and increase on property transfer taxes (again).

  82. jsmith

    No way am I voting for any more property tax assessments. I’ll bet most here who are supporting it aren’t property owners. Evey time the city wants money they try to milk homeowners. The list of assessments on my property tax bill is as long as my arm. Oakland has one of the highest property tax and transfer tax rates in the Bay Area. And what does it get us, highest murder rate in the region, one of the most violent cities in the country, horrible roads, lots of ineffectual social programs and massive corruption. If the people are smart and care about Oakland they would start by rejecting the ballot measure followed by recalling the incompetent Jean Quan and anyone on the city council who supports her. Wake up people.

  83. Naomi Schiff

    jsmith: I’m smart, I care about Oakland, I’m a property owner and a longtime Oakland business owner and business tax payer. If the state tax situation wasn’t so dysfunctional, the cities and counties would have more room to maneuver and deliver services better. I don’t mind paying well-thought-through taxes, as long as they are coupled with a careful assessment of current expenditures, and entail appropriate negotiations with public safety and other unions. I think Jean Quan is competent. She needs to make sure to get good advice, and hire a competent administrator. Recalls do little other than induce chaos, cf the hapless Arnold S. What, you want Mr. Police Union Perata to run the city? Would that help?

  84. MarleenLee

    Naomi, Oakland’s financial situation predates the state situation, the real estate crash, the wall street mess etc. by years. Remember Measure Y? We were asked to approve that in 2004 – the “good times,” because Oakland was already broke THEN! As far as this tax being “well thought out?” Well, by the time it made it to council, it was a blatantly illegal “general tax,” in complete violation of Prop 13 and Prop 218. How well thought out could it have possibly been? Appropriate negotiations with labor unions? So far, no pension concessions from police, no meaningful concessions from other unions. What is the money going to be used for? Read the language. Whatever the City wants it for.

  85. Barry K

    jsmith- “Spread the wealth” or better yet, “Trickle up poverty.”

    Naomi’s chronic defense of Quan and her blind support of taxes is reflected in one of her recent posts.
    Naomi Schiff Says: March 3rd, 2011 at 2:59 pm
    “In a larger sense, if we don’t want to have an unstable world, we should indeed strive for less income inequality, both in our own country and with regard to others. The alternative is war, unrest, and famine.”

  86. Naomi Schiff

    Do you disagree, Barry, that having numbers of billionaires increasing while numbers of extremely poor people also increase is an indicator of potential instability? Or are you a billionaire?

    Marleen, Barry, I didn’t say that the present proposals are well thought out, nor did I state that any union negotiations have taken place. I meant that if proposals WERE thought out and negotiations DID take place, that I wouldn’t necessarily oppose taxes. Geez.

  87. The Boss

    Naomi -

    Just for kicks, what’s your prop-13 assessed value on your property in Oakland?

    I looked you up and it looks like you live at 238 Oakland Ave. Please disregard if that’s inaccurate.

    If you do live there, your taxable value is $87k and you pay about $2k a year in property taxes.

    According to zillow, that house is actually worth about $350k, which would make your tax bill more like $6k.

    Must be nice not having to pay taxes. People in glass houses…

  88. Max Allstadt

    Naomi,

    I think that the nationwide increasing wealth gap is appalling, but I also think a flat $80 parcel tax is clearly regressive taxation, and as such feeds into the problem on a local level.

    Also, on monday night, I asked Mayor Quan to release the entirety of the poll data that she had which indicated that her parcel tax would pass.

    She first declined, saying that it was payed for by unnamed interests. Then she continued to selectively release favorable conclusions from the poll with out any back up data.

    Then, when I challenged her again, she admitted the poll was payed for by labor interests (again unnamed), and promised to try to release it.

    However, having read multiple findings from the poll into the record at a council meeting, she turned it into a public record. Sanjiv Handa submitted a request for it. So far the Mayor has not chosen to comply quickly. I wonder if the mayor will also use the 10 day extension allowed to further delay compliance.

    Naomi:

    Is this lack of transparency your idea of competent leadership? Is the fact that Mayor Quan was foolish enough to walk into this controversy without seeing it coming indicative of competent leadership?

    I was really offended, frankly, that she was playing games with transparency after campaign promises of “open door leadership.”

    Are you OK with this behavior?

    Even worse, it’s pretty clear to me that the unnamed labor interests that Quan spoke of were IN COUNCIL CHAMBERS while she said she’d “try to release the poll”. She could have asked for their permission on the spot, assuming she actually didn’t realize that she’d turned the poll into a public record by reading it in a meeting.

    Seriously, Naomi: please tell me you’re not OK with this. After a campaign full of aspersions cast at Don Perata over back room deals, Mayor Quan is withholding critical information about an important tax measure, and she’s withholding it to protect the unnamed back room allies.

    Is this what you voted for? If it isn’t will you please join me in publicly calling for the Mayor to uphold her campaign promises about transparency?

  89. Naomi Schiff

    Mr. Boss, I support radical changes to Prop 13, and do not in any way support the inequality that has resulted, penalizing people for purchasing houses more recently than I did. My neighbors were not at fault for failing to purchase their house when they were 10 years old. I am entirely willing to pay taxes based on the market value of property, not on this bogus value determined by some angry old wingers decades ago. They didn’t think through that their own kids (like my own) were going to be heavily penalized while seniors got more of a break than they really needed. They were thinking short term, and they gave corp. property owners a huge and undeserved break.

    Max, I’m sorry to confess that I haven’t been able to follow this week’s council/mayor dustups, as have been preoccupied with other stuff. Thus I have no opinion so far. I’ll try to get one organized when I have a minute. My silence on this doesn’t imply anything except that there are some other things I have to attend to.

  90. The Boss

    Naomi -

    Good for you! May I suggest you start today by publicly donating $4k to OUSD? I think that could ignite a movement among undertaxed folks. And it would really help.

  91. Livegreen

    Well said Naomi. Well said Boss. Time for all the older property owners to fork over the extra $4-6,000 to either the City or OUSD to help the rest of us who can’t even contribute to a nest egg (at least since the recession), or our child’s future college education.

  92. Tom

    Naomi/Boss,

    Sadly, some of us are old enough here to recall the context of Prop 13 being passed, i.e. I’m old enough to have been an adult in 1979.

    Back then municipal authorities were doubling property taxes in a single year, in order to sustain whatever spending habits they had.

    Prop 13 was not introduced to start an inter-generational war. It was started to constrain local governments that, even back then, deemed themselves beyond law, reason or logic.

    And sure, some anomalies resulted. But far more anomalies would have resulted from the alternative. If Quan had the power to double your property taxes overnight, to sustain her social engineering desires, does anyone doubt that she would?

    I don’t begrudge Naomi her deal. I begrudge those who thought that endlessly higher taxes ever solved anything.

  93. Naomi Schiff

    V, I know you are away but I request you ban The Boss for the above highly inappropriate post. Yes I am offended. Nothing more from me here at this point.

  94. Max Allstadt

    If the Boss is being offensive, it isn’t about riffing on the C word.

    It’s women’s history month, so let’s recognize that insulting a women by using a slang word for female genitals should be equally offensive as insulting a man by using a slang word for male genitals… In other words, not a big deal at all.

    You know what’s truly offensive about the Boss’ remark: lack of creativity.

  95. The Boss

    Max – Hey, you didn’t think of it. And, watch out. I actually got a fair number of people talking about Ron “Dullums”. Qunt might just catch on!

    And, Naomi, I don’t think she really can ban me. I could just change my name and continue posting.

  96. V Smoothe Post author

    Boss, that language is entirely inappropriate and will absolutely not be tolerated on this blog. Use it again, and you will be blocked from commenting permanently.

  97. gregory mcconnell

    A few points after reading all of the posts:

    1. A 50% renter pass through is included in the measure. The Jobs and Housing Coalition urged the establishment of a pass through precedent in the November 2010 $360 parcel tax and we will respectfully demand its inclusion in all future parcel tax measures, whether we support a particular measure or not. Certainly, if a pass through is not included in a future parcel tax, we will be inclined toward opposition. On the other hand, just because it is included does not mean we will be in support. If the tax passes, we will monitor the amendment to the rent control law to make sure that it is not burdensome and that there are no unnecessary paper work requirements.

    2. In the pyramid chart that the Mayor presented to Council last Tuesday night she indicated that the deficit was about $46 Million. The parcel tax will make up about 25% ($11 Million) of that. The Mayor said the remainder of the deficit would be met through a combination of concessions, reorganization, and cuts. If this happens, it sounds like the balancing act that people here are talking about. We are eager to see the details.

    3. The timing of the special election, if it occurs, augurs well for information disclosure before the election. The election is in June. The Mayor will submit her proposed budget to Council in late March or April (certainly by May) and deliberations on it will have commenced before Election Day. Therefore, we will all know if the Mayor’s budget balances tax increases with cuts and reorganization before the election arrives.

    One thing is certain – there are no pain free solutions. And, at this moment, what matters is that we stop shoveling, get out of our current crisis, and build something for the future to prevent this from happening again.

    Whether the parcel tax is part of that equation depends on a variety of factors and the proposed budget will help inform a proper decision on whether to support the measure. I look forward to seeing what the Mayor comes up with and I am reserving judgement till then.

  98. Max Allstadt

    Greg,

    I’ve been told that although the Mayor said there was a 50% pass through at the council meeting on Monday, there is in fact no such language in the measure as written. In could be wrong though, I’d be curious to see the specific wording that covers this provision.

    Boss,

    So what you’re telling us is: You dumbed down the discourse about Dellums too, with another unfunny and boorish pun, and you see fit to congratulate yourself for it. Good to know, thanks for sharing!

  99. Livegreen

    I note that every time the City wants more revenue they propose more taxes, but only part of the time do they propose concessions. I would b much more inclined to vote for Yet Another Parcel tax if a) Concessions were made to make up for the lack of past concessions (in addition to a new set to mirror the new taxes); b) This would make more room to hire more Safety Officers, so we would actually get something for our increased taxes (not more taxes for flat level of service).

    Getting Officer #s back to where they were under M-Y is important. Crime was going down, and now it’s going back up. Significantly.

  100. Max Allstadt

    Boss,

    Your latest blog post basically says “Oakland’s losing federal funding for the poor… Good!”

    You are irrelevant.

  101. Oakland Space Academy

    As someone who thinks that the Bay Area could use a few more thoughtful conservatives to help sharpen some of the staler liberal minds in the area, it is extremely disappointing that one of the more vocal among them is such a dullard that his major contribution is developing alternative names for local politicians barely worthy of a 7-year old.

  102. The Boss

    Marleen -

    Sigh. When no one cares what you think, you’re a clown. You and I are exactly the same. We just wear different wigs and noses.

  103. Max Allstadt

    Actually, boss, I take it back, Marleen’s got a point, you aren’t completely irrelevant. You’re a liability to your own cause, and I think that’s not just relevant, it’s also fantastic! Keep up the good work!

  104. Livegreen

    Talk about hijacking a conversation. It would b nice if we can get back to the issues at hand…

  105. Max Allstadt

    Ah, yes. Taxes.

    Here’s my take: I will vote for a $80 parcel tax, but I believe Jean Quan’s mystery poll is being kept a mystery because it’s flawed, and therefore I believe that the tax, at the moment, has little chance of passing.

    Tactically, Quan has committed a cart-before-the-horse error.

    Jerry Brown is in a much stronger position to pass tax extensions at the moment, because he brought out a long list of painful proposals for cuts first, and then asked for a tax extension.

    Show the people how much you have to cut just to get to the point where things will stay afloat it there’s a tax hike. Then ask them for the tax hike to prevent total calamity.

    Don’t ask them for a tax hike without putting out very clear cuts. It’s not just politically unwise to do what the Mayor has done. It also is simply a poor way to build the trust of the people. Trust is more than political, there is an ethical need for it too.

  106. The Boss

    Max -

    Funny, I’m not sure you even know what my cause is. In any event, I too support the parcel tax, because it’s regressive.

    So, we both get what we want. You get more govt funding, I get less poor people and increased property values!

  107. Oakland Space Academy

    Marleen,

    As someone who leans left, I’m not in much of a position to determine whether The Boss does a disservice to East Bay conservatives. But I can tell that you he does liberals a disservice by spending his energies on name calling and policy proposals that seem to come primarily from a place of spite. The problem being that he risks dragging down many good conservative ideas with his juvenile approach. And if liberals like myself had to compete with better conservative ideas, our ideas would themselves get better.

  108. The Boss

    OSA -

    My ideas aren’t from spite. They’re 100% because I own property in Oakland, and I want to make a reasonable return on my investment.

    The problem with your liberal ideas is that they’re DOA, so there’s really no way to improve them.

    The basic problem is this — you believe that the government can “help” / “empower” the poor in our city. I do not.

    I believe we have way more than our fair share of poor, and it’s time we push toward being the higher-end town we should be given our geography.

    What’s interesting is, I believe the liberal policies actually help meet this goal:

    * Regressive parcel taxes hurt the poor far more than the rich.
    * Top heavy, poorly run schools encourage the poor to give up and leave
    * Social programs foster a cycle of dependency which ultimately leaves the poor less competent to compete, so then they can’t afford to live here.

    That’s why I say, we’re sort of on the same side.

  109. Peaches

    @TheBoss: Bravo. Take a look at the addresses of some of our property-tax-pushing city council members, too. Same story. People who are not paying anything close to their fair share of property taxes but want to push more onto the backs of those of us who are already stretched to the limit are infuriating.

  110. Barry K

    How many homes taxed at $80 under Quan’s latest tax grab will contribute towards her future media tours and social networking? Oink Oink!

    Flying high: Oakland Mayor Jean Quan is certainly racking up the frequent-flier miles.

    Phillip Matier,Andrew Ross Monday, March 14, 2011
    http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2011/03/14/BATI1I9MUM.DTL&tsp=1

    This week’s schedule kicks off with a trip back to Washington, D.C., for a National League of Cities meeting, along with get-togethers with administrative officials to talk about jobs, transportation, trade with China and the Port of Oakland.

    She’ll also be attending the Asian Pacific American Municipal Officials meeting.

    On Wednesday, she’s off to New York City, where she is being honored by Asian Americans for Equality.

    She returns to Oakland on Friday, then drives up to Yosemite for the Ahwahnee Conference sponsored by the Local Government Commission, where she is incoming chair.

    Then on Monday she heads to Sacramento, where she is scheduled to be honored by her friend and ally Assemblyman Sandré Swanson, D-Alameda, as his district’s Woman of the Year.

  111. Otto

    Max,

    I suspect that Quan’s error is not so much the tactical one of promoting tax hikes before announcing spending cuts.

    But rather . .

    That she has given no thought to cuts, as she is idelogically opposed to them. Unless perhaps they come from those whom she deems negative elements e.g. the City Attorney’s office, or of course public safety.

    We have a mayor who is anti-business, anti-police, pro-taxes and pro-social engineering. I suspect many would aver that the City needs the exact opposite.

    Could it be that Dellums might start to look good, on the basis that doing nothing is better than doing the wrong things?

    Either way, they both like a lot of first-class travel. Good thing we’re not paying for all that. Oh wait . .

  112. Oakland Space Academy

    Boss,

    It is pretty clear you have no idea what I believe, so a bit of an education is in order. I believe Oakland has more than it’s fair share of poverty. I also believe that municipal government is generally the wrong jurisdiction to be tackling the problems of poverty. I believe that property taxes should be lower, though income taxes should be higher. I believe in efficient, well-run public schools that are tested regularly with quantitative measures and compete against charter and other schools. I believe in social programs that do not foster dependency, but that in many cases, it might be better just to give people cash to make them less poor. So you’ll have to look for your strawman elsewhere, may I suggest 1977?

  113. Max Allstadt

    Otto,

    I think that’s probably an extreme characterization, and an oversimplification. I don’t expect to be wowwed by the Mayor’s budget proposal, but I’m sure there will be cuts. The details, I’ll wait on.

    Space Academy,

    DNFTT I shouldn’t have either.

  114. The Boss

    OSA -

    Raise income taxes, lose your income base. That’s part of California’s problem. Nice try though.

    And, the word you were looking for is “its,” not “it’s.” Evidently you were educated by public schools.

  115. The Boss

    Max -

    Always nice to be characterized as a troll by someone who probably pays less than 10 percent what I pay in local and state taxes. I’m sure you enjoy spending my money. And, I’m sure you hope I, and people like me, don’t tire of your insulting attitude and choose leave the city / state.

  116. Jack C. Nimble

    I love these people who say, “raise taxes, and the rich important people will leave”, and then they never do.

    Go show us the numbers, and I don’t mean the anecdotal story here or there.

    If it were that true, all of the anti-tax rich would be clustering in one or two low tax states.

    Furthermore, we have the lowest taxes of any industrialized nation. In what fantasy nation could anti-tax wealthy people live? Some wackball should go create that nation. Funny how these right wing guys sound like naive Communists and their detachment from reality.

  117. Navigator

    Boss,

    Bush spent your money by starting wars in Iraq and in Afghaistan and by sustaining an 800 billion military budget while at the same time giving tax breaks to the rich. It’s not the poor or the unions who are screwing you but you’re not bright enough to figure it out. It’s always easier to blame those who look different than you for your problems. This is called scapegoating and it’s a staple of conservative thinking. Boss is exemplifying all the great traits of conservatism. Boss is regurgitating the talking points he gets from Limbaugh, O’reily, Hannity, Beck, and the rest of the Ministry of Information at Faux News. Offensive remaks towards women is an extra touch which I’m sure one of his mentors Bill Oreily would appreciate considering his sordid history. The Boss is the perfect example of what’s wrong with the backward thinking conservative.

  118. The Boss

    Navigator -

    You’re right. I’m regurgitating talking points, but not you. Everything you just said is totally and completely original.

  119. Max Allstadt

    Life’s really rough when you’re a white, male, hill-dwelling, home-owner who can afford a Steinway piano, isn’t it Boss? Those taxes must be really painful.

    We really should take some time to empathize with your plight. I mean, given the agony of having to pay taxes that you suffer, we should really be able to understand why you would gloat at the prospect of poor Oaklanders losing federal aid.

    Take my friend Eric, for instance: clearly he doesn’t deserve to benefit from your tax dollars. He’s got a really sweet deal: a degenerative spinal ailment that’s slowly taking away his ability to walk unaided, no family to help him, no car, and only a slim chance at getting into affordable housing. Oh and the constant pain is another perk of his situation. And the apartment that he can afford with his SSI check, a great perk: the whole building is infested with roaches and bedbugs, and the landlord is non-responsive.

    There have already been cuts to programs that would deliver food to Eric and transport him to and from the mediocre medical care that is paid for by the Boss’s agonizingly painful tax bill. Fortunately, since I have such a low tax burden I can afford to volunteer from time to time to help out.

    Yeah boss, you’ve got it really rough. All those poor people living it up on your dime must be laughing it up at your expense every night. I really can’t blame you for your views.

    Wups. Fed the troll. Oh well.

  120. The Boss

    Max -

    You and I both know for every reasonable case like your friend there are many unreasonable government expenditures.

    Obviously I support a reasonable safety net. The question is where to draw the line.

    What you’re doing is a standard strategy of arguing by anecdote. That’s fine, but it diverts from the actual problems.

    Also, I think you can validly ask whether people living off government money should be subsidized to live in the Bay Area (very expensive) as opposed to moving to a cheaper locale, to make costs lower on government.

    And that’s not to mention that some parts of the safety net actually hurt those they claim to serve. Historical examples include the notorious “man in the home” provision from the 1960s.

    A more recent example might include the low cost of community college. People freak out because they might raise the tuition to like $3k a year. My feeling is maybe people who have to pay an amount like that (which is still totally payable on a very low income) might take school more seriously, since they’re actually paying something into it.

    If I cared so much about the taxes I pay, I would move. So no worries there.

    But, maybe you should rethink your assumption that high taxes and spending are good public policy. Maybe spending frequently fosters dependency. Maybe taxation lowers opportunity by scaring away businesses.

  121. Navigator

    Max,

    That’s a very touching story and I know there are many people like your friend who depend on a safety net to help them during tough times.

    In the nordic countries like Norway and Finland, residents are taxed at a 50% rate and yet these countries have the highest standard of living in the World and the highest life expectancy. Citizens don’t have to worry about going bankrupt when they get sick. They have great parks, wonderful roads and great public transportation. They have 6 weeks vacation, maternity leave, and social security. They’re happy to give their 50% for a much better and less stressfull society then what we have here in the United States.

    Conservatives like Boss don’t understand that when taxes are cut, my daughter’s tuition goes up, the roads wreck my car, and we pay more for public transportation. Also, we lose teachers, librarians, councelors and our education system goes in the tank. The pluses for tax cuts are that the rich and corporations get to have higher profits which they then shelter in overseas accounts in the Cayman Islands. They also invest in cheap labor in China, India and Mexico.

    The conservatives want to privatize everything except for the military which protects markets and resources for American multi-national companies.

    The Boss and conservatives can’t understand the plight of the less fortunate. It’s not in their DNA. I lost my dad hen I was 12 years old and my mom had to raise five kids all by herself. We had just arrived from Portugal when my dad died of cancer. My mom didn’t speak English, didn’t have a driver’s license but she worked so hard and had so much love for her children. Thank God for public assistance or we would have starved. Reagan came in and cut Public assistance and we suffered. My mom cried evry night.

  122. The Boss

    Nav -

    I think the difference is that you are primarily concerned with short-term situations, where I’m looking at the long term.

    Yes, it’s great if we can spend lots of money on all sorts of things now (and, I include Bush’s wars and Medicare Part D in that). Doing so will increase our short-term quality of life.

    However, I’m concerned about the long term, which is impacted far more by the competitiveness of our city/state/country.

    Life is primarily a competition. California competes with Texas — and we are losing that competition terribly. The US competes with other countries — and we’re rapidly losing ground there as well.

    In the US, funding for all the stuff you mentioned grows by leaps and bounds every year, yet the results are dreadful.

    The world is becoming flatter every year. Yes, wealthy people can invest in factories in other countries just as easily as they can here. The primary incentive to do so? Liberal policies which drive up tax and regulatory costs and make it diseconomic to hire American employees.

    We cannot force businesses to stay here (though you’d probably like to try).

    The Nordic countries are an interesting situation. Much of the reason their system works is ethnic homogeneity. It’s the same reason Japan has seen basically no looting recently.

    And, by the way, I do basically pay 50 percent taxes. Where’s my 6 weeks of vacation?

  123. The Boss

    Nav -

    I can actually put it much more succinctly. Everything you said is really attractive to me. I love free stuff, and I love parks.

    But, it’s time to wake up to the fact that we can’t afford it anymore.

    Social spending comprises 60% of the federal budget. Debt interest is another 6%.

    Meanwhile, federal tax receipts as a percentage of GDP have never significantly exceeded 21 or 22%.

    Point being, raise taxes and people just avoid paying them. The only option left is to cut.

    If something can’t go on forever, eventually it will stop. Sorry.

  124. Navigator

    So it’s a race to the bottom with Texas. The State who can give the corporations the cheapest labor with the fewest benefits along with the dirtiest air and water wins. Oh wait, Isn’t Mexico just across the border. I guess Texas is living too large. What’s a reasonable wage comparable to India, China and Mexico? Should Americans work for $2 an hour?

  125. The Boss

    Nav -

    You know, honestly one of my biggest fears is exactly what you talk about there. I’m deeply worried the average wage in the US will trend toward the average wage worldwide.

    I don’t agree with the things about water and air, because high-value businesses and employees really do care about those things. And, as you know, environmental regulation and spending is a tiny fraction of, say, Medicare.

    Probably the only way to prevent a wage collapse is to make sure business and research innovation is done here. That’s why I strongly support federal funding of basic research (which is a tiny slice of the pie, btw). I also liked what Obama said about that in his State of the Union — but I sort of doubt he’ll deliver. For businesses, we have to have competitive tax rates and regulation. And, we should be focusing education on what works — mimicking other countries as needed. Same goes for health care.

    None of the above fits well with ballooning government budgets. We need to accept that we can’t pay for every possible service for every disadvantaged group. Social spending should be capped at maybe 25 or 30 percent of federal expenditures.

    Sadly, I don’t think any of the above will happen. I do think business is slowly fleeing California and the US. I think it’s somewhat likely my kids will leave the US at some point, much as people once flocked here for opportunity. And, while $2 an hour really sucks, I don’t know if we can afford to pay the bottom 20 percent of people not to work once computers, robots and other gizmos have made them more or less unemployable.

  126. Livegreen

    In the meantime we gave more than that amount away in tax concessions to the rich towards the end of last year when Obama was trying to get an extention in unemployment benefits…

    Re.Texas, part of the reason they’re cheap is they have so few laws protecting employees OR consumers. They’ve gutted enforcement of what little protection they have. You don’t protect anybody, it doesn’t cost anything.

    That leads us to China. They not only don’t enforce laws protecting consumers, they subsidize those same products for export. It’s that vs. Mexico where they either don’t enact the laws or don’t enforce it (not enough money to also subsidize their export).

    So where do companies go after (that’s cheaper than) Texas? Why even bother with Texas? Just go to China and collect as you pass “GO”.

    Then there’s the efficiency of the robots. Yes those have also reduced the employment base. So get an education to repair/oil the robots. Except those jobs are cheaper overseas, so again, cheaper to just go directly abroad.

    Welcome to “Player Piano”. Not like this wasn’t written about 60+ years ago or anything.

    The answers, on the other hand, don’t seem to be coming so quickly…Especially when the CEO’s get paid big bonuses to turn a profit (kill jobs, drive up efficiency) for the two-three years they’re employed once they finally make it to the top.

    I guess that’s why they call it “making a killing”…

  127. Navigator

    That’s why we need regulations. Corporations are in the business of making the most profit they can for their shareholders. Corporarations think short-term bottom line. They have to make their earnings for the next quarter or their stock prices take a hit if they come in below expectations. That’s what corporations are designed to do.

    Corporations are not going to look after their employee’s rights, their benefits, their working conditions, nor are they in the business to look after our air quality, our water, or our polutions levels. If laws are not enacted and regulations enforced, corporations will do what’s best for their short-term bottom line every single time. Corporations are not altruististic philanthropic organizations here for the good of our society and environment. They’re here to make a profit and we better have someone watching out for the public’s over all interests.

  128. livegreen

    But states and cities cannot do those regulations alone, otherwise companies just relocate to the cheapest place (overseas). Even small companies then find themselves embattled as their bigger competitors have even more (often subsidized) economies of scale.

    That’s why both national regulations and enforcement of fair free trade are important (holding other countries accountable for their anti-competitive actions, as well as our own).

    But the big companies have that tied up too through campaign donations.

    The only way, ONLY way (at least while private campaign donations are so prominent), is for consumers to buy locally and for local and state governments to give preferences to local businesses.

  129. The Boss

    Livegreen – local buying will not happen, and protectionism has been shown to just drive capital elsewhere.

    I don’t see anything in what either of you wrote that would solve the problem.

    And, yes regulation is important. But it’s wrong to think that regulation costs that much money. 60 percent of the federal budget is social spending. I don’t have the pie chart in front of me, but I think regulation is under 5 percent.

    The spending difference with Texas is not regulation. It’s that they actually charge for stuff like community college, their welfare and Medicaid systems are less generous, etc.

    Look, I’m not that conservative a guy. I completely agree that the religious right lives in a fantasy land. I believe in global warming, I know markets need sensible regulation, etc. But, I think you guys live in a fantasyland too.

    Social spending is the problem, not the solution.

  130. Jonathan C. Breault

    Once again a parcel tax proposal has been put on the ballot in Oakland. Ostensibly supported by a poll trumpeted by Mayor Jean Quan as proof positive that the electorate is on board and ready to once again increase taxes. Curiously nobody seems all that concerned that Quan will not reveal for public inspection how the poll was conducted, how the issue was framed and who did the polling and under what circumstances. Anyone with a rudimentary understanding of polling knows that advocates for a certain point of view can phrase an issue in a manner which will almost always achieve the desired result. Quan wants us to believe that this polling was substantive proof that people want to support a parcel tax and she is perfectly comfortable with the odd fact that her conclusion is based upon inspection of polling data that is not available to the public. The idea that Quan actually believes that this poll ought to be even considered or countenanced by the public and by the City Council affirms the obvious fact that she believes she knows better and can essentially govern Oakland by fiat and circumvent normal procedures and debate with all of the facts on the table for public consumption and deliberation. Under the guise of responsible government Quan is foisting upon the electorate a preordained result and then attempting to justify it with an assertion of fact that is entirely unsubstantiated. An objective, unbiased analysis of Oakland’s financial dealings would certainly warrant a poll which would in essence ask “Do you have any confidence in the ability or competence of Oakland’s municipal government and if so would you entrust them with more of your tax dollars in the belief that they would manage this money is responsible, fiscally prudent and transparent manner?”

  131. livegreen

    The Boss, I didn’t comment about Social spending so I don’t need correcting on that. Regardless, I understand that Texas has almost no enforcement of state regulations when it comes to production, especially food production like slaughterhouses, factory farms, etc.. CA on the other hand has comparatively very tight regulation on agriculture, food and manufacturing. That’s a cost of doing business that forces businesses to relocate (if not to Texas, then to China, where there are even less regulations, safety enforcement, more corruption, more illegal export subsidies, state paid IP theft, etc.).

    You’re talking about taxes on individuals, I’m talking about taxes and subsidies for Corporations and cost of doing business.

    I realize that doesn’t get into the CA side of things. I agree that CA overdoes some of it’s own laws & costs of doing business here. The challenge for CA is that even if we make it more business friendly, the lack of regulation and enforcement will always make it less competitive. How low do you go?

    Regarding Trade Agreements, enforcing agreements we have signed & international law is NOT protectionism. It’s enforcing free and fair trade. I’ll put you in the camp of Kookie Roberts of not knowing the difference.

  132. Max Allstadt

    @livegreen

    Nope. Technically, she has ten days from the moment she files a records request, and she may be able to file an extension. But given the fact that the poll is unarguably a public record, and given the fact that she was holding it in her hand at a meeting last monday, there’s no way to interpret the slow response as anything other than stalling. Unacceptable.

  133. The Boss

    Livegreen -

    Does it matter? We are losing. You offer no solutions — only clarifications on policy minutiae.

    We cannot force china or even Texas to change these things. Maybe if CA stuck by its guns on regulation but lowered social spending and taxes, things would improve.

    Instead, liberals ignore the broader world and demand everything. That’s why our state is bankrupt.

    You refuse to adapt so you will perish.

  134. livegreen

    Of course it matters. One has to understand issues and have clarity in order to know what action is appropriate to take. The point is we need action on the national-international front, while we also improve regulations on the local and state fronts.

    Back to local, making & buying local IS part of the solution. It might not be for you, but that doesn’t mean it’s not for others. That’s also the free market.

    Unless you’re only interested in arguing and saying you’re right. Then you would be offering no solutions – only clarifications on policy minutiae.

  135. The Boss

    I offered a solution — holding the line on regulation while competing on social spending and taxation.

    Your solution is to refuse to change while applying political pressure on everyone else to become like us. It’s a nice dream.

  136. livegreen

    I did not comment on social spending and taxation. I didn’t refuse change. And I didn’t advocate applying political pressure on everyone else to become like us.

    In short I didn’t do or say any of the things you’ve attributed to me.

    Boss, you seem more interested in arguing with people and inferring others opinions without the ability to attribute. A lot like your liberal Union counterparts who infer union bashing or destruction whenever they hear any difference of opinion.

    Like them you appear to be a follower of the George Bush mantra: “You’re either for us or you’re against us.”

  137. Navigator

    Califronia has never followed Texas on anything and California voters soundly rejected the race to the bottom argument put out during the Governor’s election by the Republican candidate. California is a trend setter. If we strive for a clean environment with a well paid and well educated workers and consumers, the businesses and residents will follow. You have to look forward and invest in the future. You don’t go back to polluting the environment and taking rights and benefits from workers. That’s extremely shortsighted on the part of the corporate contributors who control national policies. In the end, they’ll have no consumers who can afford their products.

    In Oakland’s case let’s let the voters decide. I’m not worried about any pols. the real pol will be at the ballot box. And, I’m confident that Oakland voters will realize that Oakland has made substantial progress and now is not the time to retreat. Now is the time to push forward and make this city attractive to investors, businesses and residents. How do we do this? We invest in repairing our crumbling roads. We invest in making our parks the envy of the Bay Area. We clean our streets of litter and our traffic signs of graffiti. We maintain our mediums. We clean the graffit and blight from our commercial districts. We do everything we can to make the city of Oakland a shining magnet to businesses from throughout the Bay Area, California, the Nation and the World. Now is not the time to retreat and I think most Oaklander’s know that Oakland’s current budget of just over 400 million for the General Fund is too small for a city of Oakland’s size and stature. However, until Oakland grows its retail base by enticing businesses, the parcel tax is the only thing to keep the city going forward. That’s the reality of the situation.

  138. Barry K

    Hi Jonathan C. Breault! I enjoy reading your letters to the Editor in The Montclarion.

    One point to clarify in your post above: “Once again a parcel tax proposal has been put on the ballot in Oakland.”
    It will be placed on the ballot by the City Council that voted to place it there; except for IDLF and Schaaf (though she supports the tax on a General Election) and Brooks was absent.

    Quan also tried to get her telephone tax and parcel taxes on the ballot too. Thankfully, these failed.

    Perhaps she’s put the poll and results through the shredder by now? Open government? Just like Cuba and China and Russia!

  139. The Boss

    Nav -

    On Oakland I completely agree with you. Don’t forget that the parcel tax, being regressive, also forces out the poor, which is another huge positive.