Measure Z Tax Revenues Still Within Sacramento’s Grasp

By Steven Tavares

San Leandro voters easily approved a quarter-cent sales tax increase last month making it one of the stingiest in the Bay Area. Part of the city’s pitch to voters featured a pledge the increased revenues would not be pilfered by lawmakers in Sacramento. Instead, the increased tax dollars would stay in San Leandro. It turns out this may not be true.

During a council meeting Nov. 15, the city’s recently-hired finance director Tracy Vesely said the state could still use the revenues from the 10 percent sales tax to balance the state’s chronic budget problems. She also limited enthusiasm for the successful passage of Proposition 22, which similarly bans Sacramento from overreaching on short-term takebacks that have been deeply unpopular across the state at the local level.

One Alameda County officials told The Citizen, the city’s argument was clever and probably decisive, but lawmakers in the state capitol can find a way to balance the state budget by whatever means they choose, including another round of takebacks from local municipalities. They also added the likelihood of borrowing from city is low after the upheaval it create and Governor-elect Jerry Brown’s ambivalence toward it as a device to balance the budget.

Any windfall from Measure Z, which passed with 61 percent of the vote, won’t help the city’s $3 million deficit until next April. Vesely said the city will not have a firm grasp of the initial additional revenues until tax are remitted sometime in June. It is anticipated Measure Z will add $4 million-per-year over the next 7 years. She called its passage “critical” for the city to stop its budgetary bleeding, but won’t help this year. She anticipates further dipping into the nearly depleting reserve fund. “It’s not going to do the trick in the short term,” said City Manager Stephen Hollister, who pushed hard for the measure.

Among the measure’s immediate benefits include the retention of seven positions in the Police Department and use of a fire ladder truck for the entire year. It may also allow for the potential boondoggle known as the Senior Community Center to partially open in April 2011.

With unemployment figures likely to show a record-breaking 19th straight month over 9 percent and state and local figures remaining at over 12 percent, Vesely said, she like many, are having trouble seeing the economy’s long-term trends. “I do not have a firm grip on revenues in the next few years,” she said.