To Tax or Not to Tax? Debate Boils Over Pasadena's 3/4 Cent Sales Tax Ballot Measure

Published : Tuesday, September 4, 2018 | 5:24 AM

Pasadena voters will be asked in November whether to up the city’s sales tax by three-quarters of a cent per dollar.

City officials argue the tax is vitally needed to maintain important services as costs balloon at a rate outpacing revenue. A third of the money collected from the new tax would go to the financially strapped Pasadena Unified School District.

But others, like the Pasadena Chamber of Commerce, contend that raising the sales tax would make local businesses less competitive and that the City can meet its financial needs through cuts and improved efficiency.

The Chamber came out against the measure last week.

“At its meeting on Tuesday, the Board of Directors of the Pasadena Chamber voted to oppose the sales tax measure,” the Chamber of Commerce said in a written statement. “The Board took no position on the split with the PUSD [Pasadena Unified School District] thinking that opposing the sales tax measure sends a strong message to the community.”

Chamber President and Chief Executive Officer Paul Little said the Board made the move after a poll of Chamber members showed 78-percent opposition to the tax. The survey asked for an opinion based on the official language of the proposed ballot measure.

The Chamber said its membership also opposed the advisory measure to give a third of the proposed tax, or a quarter-cent per dollar, to the Pasadena Unified School District by a margin of nearly 63 percent.

Pasadena Mayor Terry Tornek said the Chamber’s survey was flawed because it included no information about why the tax is needed. When the City sent its own poll to Chamber members, and included some information about the reasons for it, respondents were in favor 2-1, he said.

Tornek said the financial issues the city faces can’t be fixed with belt-tightening and thrift.

“It’s not a fun thing or a popular thing that we haven’t worked at trying to find some alternative course of action,” the mayor said.

“We’re working very hard in making sure that we are being cost-effective,” he said. But that’s not enough.

“We really need to have an additional stable source of revenue and the sales tax is the most desirable way to do that, rather than a parcel tax, some sort of gross receipts tax or one of the other taxes that we reviewed,” he said.

The tax is needed to maintain vital services including the police and fire departments, Tornek said. And local infrastructure investment is sorely needed.

Without new revenue, emergency response times could be affected, Councilmember Andy Wilson said.

He said as a businessperson himself, he doesn’t like the idea of a sales tax increase and understands business’ concerns about staying competitive.

“Clearly raising taxes is not something we should be doing lightly and it does come with its potential negative consequences. You just have to decide whether those consequences warrant maintaining services,” Wilson said. “Otherwise we’re going to continue to do less and there’s no way around it.”

“The services have become more expensive and revenues have grown more slowly than in costs. And if we want to maintain services is we’ve got to balance our budget,” Wilson said.

The City has worked to save money every way it can, he said. “You can’t squeeze any more.”

“We can continue to reduce spending, but it will be at the cost of core services,” Wilson said. ”It’s appropriate to ask the voters whether they want to keep those services.”

The Mayor and Councilmembers both said if the city doesn’t collect the tax, someone else soon will.

Pasadena’s sales tax is ¾-cent below the state maximum of 2 cents for locally-imposed sales taxes.

If voters don’t impose the tax in November, Tornek said it’s likely Los Angeles County will end up doing so. The money would then go into county coffers, rather than remaining available for use specifically in Pasadena.

Little said the Chamber believes Pasadena can do without the sales tax increase.

“Essentially, like their businesses, the city needs to live within its means and curtail spending on unpopular programs and not waste money on projects, initiatives and programs the citizens and businesses do not support,” the Chamber statement said.

Rather than a crisis, “This could very well be an opportunity for the city to look at how it delivers service that isn’t the most efficient, effective way to do it,” Little said.

“Nobody wants to see public safety diminished,” Little said. “But at the same time, there may be scheduling changes, personnel changes, the way things are done, that could mean significant savings without diminishing safety of anyone in the city.”

The City can do more to reduce staffing, Little said.

“They really do need to look and see are there, are all of those employees doing what they can be doing as effectively and efficiently as possible?” Little said.

“I’m wondering if there’s not things that can be done using technology that means that you have to have fewer people on the payroll and you don’t have to have as expensive an employee doing the jobs that they’re doing,” he added.

Little said the possibility of a future County tax doesn’t warrant imposing a local tax preemptively.

“The reality is, and what our folks are expressing is, let’s fight that battle when we get to it,” he said.

 

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