Commentary: Slow-growth initiative may put future city revenue at risk
Many years ago, I had the privilege of working on property tax legislation to bring millions of dollars back to Orange County and 12 other counties in California that were receiving a disproportionate share of property tax dollars in comparison to the amount they were sending to Sacramento.
This was due largely in part to a complex formula that was created around Proposition 13 and the fact that counties like ours, and many others, did not have infrastructure as developed as Los Angeles and San Francisco, which receive a far greater share of property tax dollars.
If you’re thinking we’ve been short-changed, you’re right.
With sales tax being a volatile revenue stream for Costa Mesa, we have seen in past years a fluctuation in sales tax income of as much as 25%. Sales tax revenue is currently more than $50 million, but has dropped below $40 million, while property tax revenue has been a steady stream of more than $20 million.
With the current concerns over the cost of operating police and fire departments, not to mention their looming unfunded pension liabilities, shouldn’t Costa Mesa officials do everything they can to ensure funding for the next 30 years?
Measure Z, the proposed Costa Mesa First initiative — labeled a “smart growth” initiative —is not really that smart for our city when you do the math. Property taxes from older Prop. 13 homes bring in far less money per home, whereas new homes bring in much more.
Although there are many houses being sold in Costa Mesa and those new sales will be assessed at the higher rate, it is not enough to offset any sudden decline in our economy or a recession, as economists still warn us may happen. When it does, our sales tax revenue will plummet and so may the value of homes. We may even see much of our aging population that are living off the equity of their homes under water.
We can prevent this today through real smart growth initiatives enacted through our City Council and not through a costly initiative process that will ultimately end in lawsuits over its constitutionality, as was the case in 1987.
Let’s propose smart-growth ordinances that bring in new families, who will in turn help increase sales tax revenue. Let’s create housing projects that celebrate the eclectic history of our city and also promote community.
Let’s support low-income housing that otherwise would be stifled by the Costa Mesa First initiative, which does not provide for a true, mandated exemption, as it falsely claims.
Finally, let’s not push developers away from our city through an initiative that puts too many restrictions and hurdles upon them, but instead create a smarter plan that invites them to be part of a vision that will allow generations of families to remain here and continue to call Costa Mesa their home.
Let’s encourage, and even demand, our elected representatives create a smart-growth alternative to the dangerous and unlawful no-growth initiative that creates gentrification in our communities.
As counties such as Orange, Riverside and San Diego are rapidly moving in the direction of voters being registered Democratic, Sacramento will pay more attention to the needs of these counties in an attempt to woo more voters.
Undoubtedly, compromises will need to be made to ensure that counties, such as ours, will receive a greater share of property tax dollars. When that happens, do we want to miss out on potentially millions of dollars in property tax that could help fund police, fire, parks and help pay off the unfunded pension liabilities?
Do we want our children and grandchildren to be left paying our debt because we voted for an initiative that took away their future? Do we want to see our community overrun by crime-infested motels because our leaders didn’t have the resolve to tell the voters what they were really voting for?
Residents of Costa Mesa, the future rests on you. Contact your mayor and City Council members today and demand they work together on a smart solution for growth in our city.
Make them do their jobs and hold them accountable; they work for you. If the Costa Mesa First Initiative passes, all residents lose.
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DOUG VOGEL lives in Costa Mesa.