City of Watsonville Public Safety Sales Tax, Measure G (June 2014)

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A City of Watsonville Public Safety Sales Tax, Measure G ballot question was on the June 3, 2014 election ballot for voters in the city of Watsonville in Santa Cruz County, California, where it was narrowly approved.

Measure G authorized the city of Watsonville to levy an additional sales tax of 0.5% for seven years in order to increase funding to fire protection and law enforcement services. City officials estimated this sales tax increase would result in an average additional revenue of $2.8 million per year, amounting to about $20 million in total revenue over the seven year life of the tax. City officials said 60 percent of revenue would go towards police services, and 40 percent would go towards fire protection services.[1]

Retail sales in Watsonville were taxed at a total rate of 8.5 percent prior to Measure G. This tax was allocated in the following way:[1]

  • The city of Watsonville - 1.5%
  • California State - 6.5%
  • Santa Cruz Metropolitan Transit District - 0.5%

Measure G proposed to raise the city's sales tax rate to 9 percent, with all additional revenue going towards public safety funding in the city. This additional 0.5 percent sales tax was designed to expire automatically in seven years, unless renewed by voters.[1]

A 2/3rds supermajority vote was required for the approval of Measure G.

Election results

Measure G
ResultVotesPercentage
Approveda Yes 3,025 67.22%
No1,47532.78%
Election results from Santa Cruz County Elections Office

Text of measure

Ballot question

The question on the ballot:[1]

To fight crime, respond quickly to medical emergencies and fires, keep youth on the right track and make Watsonville safer by: adding firefighters and police; increasing neighborhood police patrols; updating firefighter safety equipment and stations; improving youth programs to fight gangs and reduce violence; shall Watsonville enact a one-half cent sales tax for seven years, with all funds restricted to these specific uses, subject to independent citizen’s oversight, annual audits, and protected from government takeaways? [2]

Impartial analysis

The following impartial analysis of Measure G was prepared by the office of the city attorney:[1]

The City Council of the City of Watsonville has placed Measure G on the June 3, 2014, ballot to ask the voters to approve an ordinance that would enact a temporary one-half percent (0.50%) sales tax within the City. If approved, the tax would add one-half cent to the price of an item that costs one dollar. Sales taxes are levied on the sale or use of “tangible personal property" sold at retail. Retailers collect the tax at the time of sale and remit the funds to the State Board of Equalization, which administers the tax.

The tax on retail sales in Watsonville is now 8.5% of the purchase price. The City, however, only receives 1.5% of this 8.5%. The remainder goes to the State (6.5%), and (0.50%) to the Santa Cruz Metropolitan Transit District. This Measure, if approved by the voters, would authorize an additional one-half percent sales tax (officially referred to as a “transactions and use” tax) which would increase the total sales tax rate on retail sales in Watsonville from 8.5% to 9% for a seven year period, at which time it would automatically end.

California law (Government Code §§ 50075.1) requires that

1. special tax proceeds be applied only to the specific purposes identified,

2. an account be created into which the proceeds shall be deposited and

3. that an annual report be provided pursuant to Section 50075.3 that contains the amount of funds collected and expended and the status of any project required or authorized to be funded as identified in subdivision (a) of Section 50075.1.

All revenue generated by this Measure would therefore go to a special public safety fund and may be used only for police and fire services and not used or borrowed against for other purposes. A citizen’s oversight committee will review use of the funds to verify the funds are used for only the stated public safety purposes. City financial statements made available to the public in public meetings will disclose how much is collected and how it is spent. The Measure requires the independent auditors to audit the fund with other City funds and prepare annually a publicly available report reviewed at a public meeting on the collection, management, and spending of revenue from the tax.

In summary, the City may use the funds only to “provide additional police and fire personnel, update public safety equipment, facilities and services and enhance youth violence prevention programs.”

This tax by its own terms ends automatically seven (7) years after collection begins.

A “Yes” vote is a vote to approve the enactment of the one half percent tax for 7 years. A “No” vote is a vote against the tax. This Measure would be approved if two-thirds of those voters who vote approve the measure by voting “yes.” [2]

—Alan J. Smith, City Attorney, [1]

Fiscal analysis

The following fiscal analysis and tax statement was provided by the City Administrative Services Director for Measure G:[1]

Measure G authorizes the City of Watsonville to impose a special sales and use tax (sales tax) of one half of one percent (0.50%) on transactions in the City of Watsonville for seven years, beginning .in fiscal year (FY) 2014-15 and ending in FY 2020-21 The tax proceeds will be deposited into a special and segregated account to be used only for Public Safety Services (Police and Fire) which include:

  • Hiring new police officers
  • Hiring new firefighters/paramedics
  • Upgrading technology to help solve crimes
  • Improving response times for both police and fire
  • Obtaining needed safety equipment to fight crime and respond to emergency calls, and
  • Maintaining anti-gang/youth violence prevention efforts, and

• Increasing neighborhood patrols

As this is a special tax, monies may only be used for the specific purposes described in the proposed ordinance and ballot language. I estimate this sales tax measure will generate approximately $2.8 million annually and $20 million over 7 years, which would be split 60% for police services and 40% for fire services. The tax rate cannot be increased by action of the City Council without voter approval. In addition the following restrictions are imposed on this tax.

  • The measure will automatically end after seven years unless the voters vote to renew the measure after 7 years
  • The measure would require 2/3 vote for enactment
  • A Revenue Oversight Committee will review the annual budget. The

Committee will include various members of the community to ensure funds are spent on the specific areas indicated by the measure.

  • A Maintenance of effort requirement will be established to ensure current spending levels for police and fire services are sustained. The maintenance of effort would be the FY 2013-14 budget.
  • An independent annual audit will be performed on these funds.

Based on my analysis of past sales tax revenues provided by City staff, the projected revenues appear accurate. In this analysis I relied on the best data available at this time; however, actual revenues may be more or less than City staff’s estimates due to increased or decreased sales due to changes in the general economy. [2]

—Ezequiel Vega, Administrative Services Director, [1]

Support

Supporters

The following individuals signed the official arguments in favor of Measure G:[1]

  • Karina Cervantez, mayor of the City of Watsonville
  • Betty J. Bobeda, former mayor of the City of Watsonville
  • Masaru Hashimoto, retired educator
  • Nevenka Radich, retired educator and business owner
  • Dee Dee Vargas, realtor and Revenue Measure Oversight Committee Chair

Arguments in favor

The Santa Cruz Sentinel editorial board argued in favor of Measure G, saying that the city had done a fair job of allocating its meager budget to provide services to the drastically increased population of Watsonville. The editorial pointed out that the population had tripled since 1983 and emergency service calls had increased by 700 percent, but there remained the same number of on-duty firefighters. The Sentinel also put forward the $900,000 paid out in overtime to police officers in the 2013-2014 year as an indication of an understaffed law enforcement system. The editorial concluded that the city genuinely needed the six additional firefighters and the seven more police officers that it could hire with the approval of Measure G.[3]

Official arguments

The following was submitted as the official argument in favor of Measure G:[1]

Measure G funds can be used ONLY for public safety services in Watsonville—nothing can be diverted for other purposes or taken by the State.

Measure G will increase police, fire and emergency medical services, including rapid emergency response to life-threatening emergencies, neighborhood police patrols, youth violence prevention and anti-gang programs—services that save lives and make Watsonville a safer place.

Since 1983, Watsonville’s population has tripled and emergency calls have increased by 700%, while the number of on-duty firefighters has remained the same. Violent crime rates in Watsonville are higher than state and national averages, and police don’t have the equipment and technology needed to coordinate in solving crimes and fighting gangs.

Vote YES on G for a Safer Watsonville:

  • Provide enough firefighters and paramedics to ensure rapid emergency response times for police, firefighters and paramedics
  • Expand programs to fight gangs and identify and shut down drug houses
  • Protect proven, successful anti-gang and youth violence prevention efforts that reach hundreds of first-time offenders to get them on the right track
  • Replace inadequate, outdated equipment for firefighters and paramedics such as the Jaws of Life, defibrillators and essential safety gear
  • Increase neighborhood police patrols *
  • Upgrade equipment and technology to solve crimes and fight gangs

Strict Fiscal Accountability Is Required:

  • By law, all funds are dedicated solely to police, fire and emergency medical services
  • No funds can be taken by the state
  • An Independent Citizens Oversight Committee representing a range of interests and neighborhoods will review all expenditures and make annual public reports

Measure G provides local funding that stays under local control—dedicated exclusively to keeping Watsonville safe.

Join police and fire along with local business, neighborhood and faith leaders—Vote YES on G! [2]

—Karina Cervantez, Betty J. Bobeda, Masaru Hashimoto, Nevenka Radich and Dee Dee Vargas, [1]

Editorials

  • The Santa Cruz Sentinel editorial board endorsed a "yes" vote on Measure G:[3]

There's something of an incongruity with raising taxes in a city where unemployment is high and incomes relatively low. Nonetheless, Watsonville's Measure G, which would raise the sales tax in the city a half cent to benefit public safety, makes economic sense. A safer city is a city where people will locate businesses or come to shop or eat at local restaurants.

Measure G is specific in where the money raised would go, keeps administrative fees low, and has the kind of built-in accountability that should pacify even anti-tax advocates. That's why it faces little, if any, opposition and is also backed by local business groups.

And it's why we recommend a yes vote on Measure G in the June 3 general election (mail-in ballots go out May 5).

[...]

There is no greater purpose in local government than keeping people safe. Measure G would make Watsonville safer, for a relatively small amount of money. [2]

—Santa Cruz Sentinel editorial board, [3]

Opposition

Opponents

Emilio Martinez, former Watsonville City Councilmember and private investigator, wrote and signed the official arguments against Measure G.[1]

Arguments against

Opponents of Measure G argued that, while the revenue from Measure G was dedicated to fire and police safety services, the city could include ballooning and exorbitant pension costs among "public safety" expenses. Critics also proposed that the city needed to reign in its pension benefit payments, pointing towards ex-police chief Terry Medina, who was set to receive a pension of $195,000 per year. Emilio Martinez, the most outspoken of Measure G critics, warned voters to avoid being lured in by the city's promises to spend Measure G revenue on only police and fire services. He predicted that, because of the city's massive public safety pension debt, taxpayers and residents might not see much of an increase in services, even with the approval of Measure G. Martinez stressed that the city, especially City Manager Carlos Palacios, had a history of corruption and frivolous spending of tax dollars. Martinez also argued that the city had repeatedly used "legally restricted" revenue for pension debt payments. He argued that in light of these circumstances, the city's promise to use Measure G revenue for public safety and public safety alone was meaningless.[1][4]

Martinez wrote:

The argument by Measure G proponents that the Special Tax for police and fire departments is legally restricted lacks credibility considering that in 2011 the City borrowed (transferred) $1.5 million from legally restricted Gas Tax and Impact Fees to prepay a Calpers loan for public safety employee retirement benefits.

Further, Palacios, with 20 plus years of honed experience, has been dependent on city inter-fund loans to pay the City’s bills otherwise we would have gone broke years ago. There are two types of city inter-fund loans; short term and long term. These loans are difficult to trace but short term loans are additionally tough, and Palacios keenly depends on short term loans to transfer monies from one account to another which is indicative of check kiting. And he gets away with it because the standard annual auditing system the City utilizes is not intended and/or capable of tracing money transfers (inter-fund loans), and Palacios knows this. Finally, have you read the Measure G Ballot Measure Ordinance? It states: “Detailed expenditure plans shall be developed to explain how the funds will be spent if the one-half of one percent (0.50) sales tax is approved.” Therefore, we aren’t provided even a rough draft cost analysis as to how the money will be used, but let’s blindly give more money to the City to keep an incompetent and possible corrupt individual employed? [2]

—Emilio Martinez, [4]

Official arguments

The following was submitted as the official argument against Measure G:[1]

Don’t Trust this City Council with your Money VOTE NO against Greed
  • Big Money Grab for City Pensions
  • Highest Sales Tax in Santa Cruz County
  • Unfair Prices hurt lo-income families most
  • Serious Lack of Trustfor City Administration

The public was tricked into believing that a very expensive Fire Truck was purchased only to discover that it was not located in town. Residents in Districts 6 & 7 were promised a new fire House near the East Lake Shopping Center. Monies were collected... there is still NO Fire Station there!

Discover details at: www.watsonvillefishingreport.com

Spending is way out of control by the City of Watsonville. The questionable practice of spending special funds from different accounts has led to numerous newspaper stories and investigation. Even the Santa Cruz County Grand Jury has documented a lack of transparency with some financial dealings associated with the City of Watsonville.

City Manager & City Clerk salaries are raised or given pension upgrades while many of our poorest residents continue to suffer financial hardship and unemployment.

Did the retired Police Chief win the Lottery?

The former Watsonville Police Chief is raking in more than $190,000 in pension payments every year! How would you like to retire at $15,000 a month for the rest of your life? Look up retirees at: www.transparentcalifornia.com

Only the City Council can spend this money

Don’t get me wrong; our current Chief of Police is a very honorable man. However, he is not in control of spending with these special Measure G tax funds. In point of fact, neither is the independent oversight committee.

Measure G is nothing more than a greedy grab for more of your hard earned money. Don’t be fooled again by empty promises. Please Vote NO on Measure G.

Thank You [2]

—Emilio Martinez, former Watsonville City Council member and private investigator, [1]

See also

External links

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References