Burbank voters will decide on Tuesday whether the city should impose its own sales tax or if local officials need to figure out another way to address a budget deficit.
Measure P, a proposed three-quarter-cent local sales tax, is projected to generate about $20 million annually, which city officials plan to use to help pay for infrastructure projects, as well as to pay down pension costs.
However, some residents think the sales tax is unnecessary and that cuts to employee salaries should be made to help address the city’s financial issues.
City Manager Ron Davis said in an interview the proposed sales tax is the last piece Burbank needs to put in place to tackle its systemic budget deficit, which is expected to reach about $9.5 million by fiscal year 2022-23.
So far, the city has implemented cost-saving measures, which have included having all employees pay half of their pension costs, adjusting employee compensation and establishing a fee recovery schedule for city services. Altogether, those policy changes are expected to save the city about $9 million annually.
The other component in addressing deficit issues was Measure T, an initiative approved by Burbank voters in June that allowed the city to continue transferring up to 7% of Burbank Water and Power’s gross annual electric sales into the city’s General Fund. That translates to about $12.5 million a year.
Should Measure P pass at the polls, Davis said the revenue generated would help the city pay for neglected infrastructure projects, which officials have said would cost the city an estimated $470 million total.
Burbank is aiming to address about 75% of the annual infrastructure needs each fiscal year for the next 25 years, which is projected to cost the city about $17.9 million annually.
Davis said the proposed sales tax would adequately improve the city’s financial health, but only partially address the infrastructure needs.
That is due to city officials committing to use no less than half of the possible revenue generated by the sales tax toward infrastructure needs, which was a policy the City Council approved during a meeting on Tuesday.
Additionally, council members that night approved another policy in which the city would use potential Measure P funds to help pay pension costs.
“It’s a matter of law. The pensions will get paid regardless of what the council or staff wants to do,” Davis said.
Burbank put itself in a tough situation financially when it decided to forego fully funding its employees’ pensions for several years. Though that decision allowed the city to create programs for residents, Davis said the consequences have caught up with city officials.
Should the ballot measure be approved by voters, the city has been preparing to create an oversight committee to ensure that the funds are being used as intended.
Although the city has been trying to establish policies to make sure the revenue from the proposed sales tax is not being misused, some residents have said raising taxes on the community is not the right way to address the budget deficit.
During public comments on Tuesday, resident Molly Shore said taxes are high enough in Burbank as it is. Currently, the city’s combined state and county sales tax is 9.5% — a 7.25% state sales tax, 2% from L.A. County transportation measures and a quarter-cent sales tax from the county’s Measure H, designed to help address homelessness.
She said city officials have instilled fear in voters by threatening to cut services and facilities to address the budget deficit if the ballot measure fails.
Additionally, resident Nancy Sherwood said Burbank officials have not been spending the city’s money wisely.
“This city and state are doing a really good job of trying to push out all the people who push this merry-go-round around,” Sherwood said. “My husband and I have talked about moving. Never thought I’d say that 10 years ago, but we, the middle-class, are being choked out of existence by taxes.”
Resident Sue Cleereman argued that instead of taxing residents, the city could save money by cutting city workers’ salaries. She said there are too many employees who are being paid more than $200,000 annually, which she thinks should not be the case.