The Council’s Seven-Year Itch

San Leandro takes step closer to Nov. sales tax measure, but disagrees on length
By Steven Tavares
The San Leandro City Council is supporting a bid to place a quarter-cent sales tax measure on the November ballot, but how long it should be maintained appears open for debate. The council approved 6-1 Monday to direct city staff to formulate a draft of the measure for discussion July 19.

“Our intent here is to weather the storm and it is questionable whether it’s two years or three years or seven years,” said Councilman Michael Gregory. “It’s something we should discuss.”

The proposal calls for an increase in the city’s sales by one-quarter of a cent. If approved, it would raise the sales tax to 10 percent–one of the highest in the state. A citizens oversight committee would be formed to monitor the increase and a sunset clause of seven years would be included in the measure. The addition of the sunset provision would limit the length of the possible tax increase, an aspect supported by polling done by the city earlier this year.

The exact number of years, though, is subject to debate by the council. Councilwoman Joyce Starosciak, Councilman Jim Prola and Gregory voiced concern and called for clarification before the matter returns to the council next month. Prola said he would favor between five and seven years and cautioned legislators in Sacramento are not done with deeply unpopular raids on local tax dollars. “It’s the only way we can be sure we can weather this severe, severe recession, some might call a depression,” said Prola.

As Gregory noted Monday night, a survey of residents showed favorable backing for a revenue enhancement measure along with strong but typical support for public safety. Whether the potential measure can muster a two-thirds majority of voters during a lingering recession remains to be seen. Councilman Bill Stephens was the lone vote against the possible measure.

Mayor Tony Santos, who is up for re-election this November, and City Manager Stephen Hollister also urged the council to recognize the city’s main lifeline during this budget crisis–its once-formidable $20 million reserve fund now hovering just above $1 million–is causing concern as the economy continues to pose uncertain prospects in the next year and beyond.  “Reserves are at a dangerous low and we need to replenish them,” said Hollister.

In an email to supporters last week, Santos highlighted the city’s foresight in putting aside funds in 2005 to combat rough economic times like today. Every year since Santos’ election to mayor in 2007, though, has resulted in using reserve funds to balance the city budget that has been racked by a precipitous  drop in property and sales tax revenue.