Battle takes shape over SLO sales tax renewal

August 7, 2014

By JOSH FRIEDMAN

The San Luis Obispo city sales tax initiative has a new name, and campaigns have kicked off both for and against the measure.

Previously known as Measure Y, San Luis Obispo’s half-cent sales tax has taken on the name of Measure G in the upcoming November election. If Measure G passes, the half-cent tax will extend for eight years, but if it fails, the tax will expire at the end of March 2015.

Several organizations and many prominent citizens in San Luis Obispo are backing the sales tax renewal. They have launched a website, created a fundraising committee and begun soliciting donations.

On the other hand, opponents of Measure G have neither a fundraising committee nor a website. They boast just a ballot argument that takes aims at bloated city salaries and pensions, particularly those of the current and most recent city managers.

A group of five Measure G supporters, which includes Madonna Enterprises President Clint Pearce, authored a ballot argument in favor of the sales tax renewal. The Measure G proponents argue that the city made proper use of Measure Y money and that it deserves to keep the annual revenue stream of about $6.5 million.

“We believe city officials have been responsive to residents’ needs and priorities, and have invested wisely,” the ballot argument states. “The revenue has enabled the city to fix potholes and resurface streets; to acquire open space and improve public parks; to increase and improve bike lanes, and to add police officers to enhance safety downtown and reduce noise in neighborhoods.”

The Measure G proponents also state that the tax initiative provides extra assurance of proper handling of the funds.

“A special citizen’s oversight commission will be created to monitor future spending and ensure that the revenue will continue to support essential services,” the ballot argument states.

Three citizens opposed to the tax initiative, including former mayor and county supervisor Peg Pinard, signed a ballot statement arguing against Measure G. They contest the city broke its promise to voters and spent the Measure Y money on salaries and pensions rather than on infrastructure projects.

“Election-time promises are meaningless sales pitches derived from years of polls paid for by you, the city taxpayer, to discover what you’ll vote for,” the ballot statement reads. “Salaries grew about $6,000,000 per year, essentially absorbing Y’s tax proceeds.”

The Measure G opponents state that the current city manager earns 28 percent more than California’s governor and her predecessor receives a pension of $159,000.

Former city manager Ken Hampian, the recipient of the approximately $159,000 pension, is participating in the pro-Measure G campaign. In a July email obtained by CalCoastNews, Hampian asked city retirees to support the Measure G campaign and provided the former employees with donation forms.

“However one might feel about current city issues and politics, SLO needs our support right now,” Hampian wrote. “And so does the organization which gave us such great careers.”

In addition to Hampian, the pro Measure G campaign lists former mayor Dave Romero and Cal Poly President Jeffrey Armstrong among its supporters. The San Luis Obispo Chamber of Commerce has also endorsed Measure G, and the Downtown Association supported the push to place it on the ballot.
Most of the public speakers during recent council hearings on the ballot measure supported the initiative as well.

On the ballot statement supporting Measure G, proponents claim that the city spent 60 percent of Measure Y money on capital improvement projects. The ballot statement argues that city audits of the Measure Y funds prove that the majority of the money indeed went toward capital improvements.

While audits show much of the money going to city projects, the city’s definition of a capital improvement project has changed repeatedly since the onset of the tax measure. During the last few months alone, city officials have offered several different definitions.

City finance director Wayne Padilla defined capital improvements project as non-routine maintenance and projects costing $25,000 or more. Public Works Director Daryl Grigsby has offered multiple definitions, such as projects that create new public assets or enhance the function of existing ones.

But, the city seems to have settled on Assistant City Manager Michael Codron’s definition — any project that is listed in the city’s Capital Improvement Plan. That definition allows the city to classify routine maintenance, like street paving, as a capital improvement project.

In addition to arguing that the city diverted the Measure Y money away from capital projects, the Measure G opposition contends that the city is not as broke as staffers claim it is.

“The city banks a huge cash reserve – equal to about 34 percent of its annual expenditures,” the opposition ballot statement says. “This ‘surplus’ accumulated year after year, even during the recession, while the city talked about being broke.”

The city’s investment portfolio, which accumulates reserves from various city funds, currently totals about $90 million in cash and investments. The city prioritizes liquidity over yield in its investments, so it can tap into portfolio funds in order to backfill expenses.

Measure Y currently brings in more than $6.7 million in annual revenue, according to the most recent city report, which accounts for about 12 percent of the city’s general fund. If Measure G fails and the half-cent sales tax expires, the city would likely lose more than $7 million in annual revenue, as Measure Y revenue has been increasing yearly.

In 2006, Measure Y passed with about 65 percent of the vote. A simple majority vote will determine the fate of Measure G.

Accompanied with Measure G, a $177 million school district bond measure and a $285 million community college bond measure will also appear on the November ballots in San Luis Obipso.