Chula Vista’s Half-Cent Tax: Going About the Problem the Wrong Way

This November, the city of Chula Vista will be putting a measure on the ballot to impose an additional half-cent sales tax for ten years. With a 4-1 vote (Councilmember John McCann voted in opposition), the measure will head to the ballot:

Tax increase headed for November vote

The reason for this is simple – the city has fallen woefully behind on its infrastructure upkeep (to the tune of over half a billion dollars). That means that roads are falling apart, fire and police stations are behind schedule in getting remodeled, and critical systems are in dire need of repair. The city hopes to gather an additional $15 million a year from the new tax, but more importantly, to use the future tax as collateral to float a city bond for larger projects.

Imposing this new tax will merely add a bandaid to a fiscal hemorrhage. While this additional money would help a little, it’s the wrong approach to an ongoing endemic problem. The real problem is the huge imbalance in costs and revenue. First, the costs: about sixty percent of the city’s budget goes to fire and safety. The rest of the money must be divided by the rest of the city needs including park maintenance, road repair, graffiti removal, city lights, libraries, sewers, etc.

As for the revenues, for the last twenty years, the city has done a horrible job of creating new revenue in the way of adding businesses in either retail, commercial or industrial. This is partly because the city has been giving out land for housing development like if it was candy. It’s almost as if the city was addicted to residential housing. In fact, City Hall has made things worse by continuously converting land that is zoned for commercial and industrial land to residential zoning. The problem is that, in the longterm, housing adds costs and doesn’t bring in new revenue like businesses do.

For the next few months, we will be hearing about the critical infrastructure needs. The ugly picture that is painted will be very real. This will be paid and coordinated by those people who will benefit from additional revenues. What you won’t hear is what is Plan B? What will we do if the measure fails? City Hall seems confident that the measure will pass basing that confidence on a poll conducted by their consultants last year. That confidence may be misplaced. The last time that the city placed a tax measure in 2009, consultants told the then-Council that their polling showed 69% passage. Well, the consultants were right about the 69% number but in the exact opposite way. The measure (Proposition A) was defeated by about 69% of the people voting.

Taxing our way out of a fiscal problem is the wrong way to go about it. That giant crevice will just keep getting bigger and throwing some dirt on top won’t really help. Instead, the city needs to take a hard look at how it generates money and start creating additional revenues that are sustainable rather than use stop-gap measures that won’t help the real problem.