There is a roads tax coming

Posted on January 23, 2014 by Sonoma Valley Sun

Guest opinion by Jack Atkin. Sonoma County in recent years has been exploring ways to finance a higher level of road maintenance than can currently be paid from the county’s general fund. Accordingly, taxpayers can expect in the near future a ballot measure imposing some form of additional taxes.

Maintenance of the county’s nearly 1,400 miles of roads is among the most basic of services residents expect from local county government, and the Sonoma County Taxpayers’ Association has begun to look at what possible tax measures may look like.
If, for example, the Association was to asked to support a measure, how should it be structured?

It’s hard for someone who supports the efficient use of tax resources to even think about supporting a measure to raise taxes when so much is currently being wasted on excess employee pension costs. Still, with the realistic prospect of meaningful pension savings being years or even decades away, a case may be made for finding a way to fund basic needs in the interim, even if it involves a temporary tax increase.

I’d like to outline four elements of a potential temporary tax proposal that could make sense for taxpayers. First, any new tax revenues should augment the existing road maintenance budget, not replace it. That would require a determination of current baseline spending so that any new revenues would improve on road conditions, not merely supplant existing funding.

Second would be a requirement that new revenues be used only for “edge to edge” pavement improvements. Bicycle paths, public transit and other political favorites often loaded onto a tax measure to gain votes from specific constituencies should not be paid from any new tax revenues.

Third, pensions must be addressed, period. The primary reason the county does not have adequate revenues for road maintenance now is that pension costs are eating up what should be spent on basic services to the community. Currently, the excess pension costs, that amount over and above what it costs to provide a reasonable retirement benefit, are eating up about $50 million each and every year from the county’s general fund. Without the pressure on the budget, the political will to reform pensions will be diminished. If pensions are not reformed, Sonoma County residents will be paying a high price for a government that delivers lower and lower levels of service.

So the question is whether or not there is a way to increase funding for road maintenance temporarily while pension reforms gain traction, but at the same time keep the pressure
on to achieve pension reform. This should be an essential requirement for any new tax. How to achieve it is more difficult and may require some innovation and cooperation from the politicians. One idea would be to agree on a schedule for pensions to be reduced to the county goals of 10 percent of total payroll over 10 years, and include a provision in the tax measure that would force the county to freeze pay levels for all employees in the event the reform schedule was not on track.

The final requirement should be a mechanism to avoid what taxpayers find objectionable about most proposals to increase taxes: that what begins as temporary taxes to fix temporary problems soon become permanent taxes once the politicians get used to the increased revenue stream. Most taxes placed before voters have a sunset provision and voters do have a chance to revisit the issue on future ballots. What happens in reality is that politicians, when facing tax expiration, will argue vociferously that without the tax they will have to make “painful” cuts. To further this argument they always suggest cuts to the highest priorities, not the lowest.

Jack Atkin is the president of the Sonoma County Taxpayers’ Association

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