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Op-Ed: We Should Repeal the City's Half-Cent Sales Tax Increase

Tom MacDonald, a member of the Novato Citizens for Pension Reform, explains why he was against the contract agreements made with city employees and why he regrets supporting Measure F.

Editor's Note: These are the notes Tom MacDonald used when he spoke to the Novato City Council on July 17 to protest the agreements reached between the city and its labor unions. The City Council unanimously approved the contracts at Tuesday's meeting.

These tentative agreements should not be approved. The progress on pension reform is woefully inadequate.

In a letter on March 13, 2012, the Novato Citizens for Pension Reform asked for six specific items to be addressed in negotiations. 

The only item of the six on which progress was made was the elimination of pick-up of the employee contribution amounting to 7 percent on safety and 5 percent on Miscellaneous employees. Yet the “savings” were offset by salary increases of 5.25 percent and 3 percent.

This agreement amounts to an annual net savings of only $400,000.  Savings without a salary offset would have been more than $1,030,000.  Yet, with savings of only $400,000 the staff memo is trying to convince us that a significant dent has been made in the City’s ongoing budget problem. This is lipstick on a pig.  

In fact, with yesterday’s announcement that CalPERS made only a 1 percent return in the recently ended fiscal year, we can expect future pension expense to increase yet again.  A good portion of the $400,000 savings was probably just wiped out by this investment shortfall.

On the other five items in our March letter, no progress was made in this 2012 negotiation. The can was just kicked down the road again.

Historical Perspective 

In July 2010 the Gang of 12 requested progress on a number areas in the 2010 negotiation: reduced pension formulas, elimination of pick-ups, changes in final compensation formulas and elimination of excessive longevity steps.  

Negotiations in 2010 were only partially successful.  But 10 of the 12 Gang members agreed to support the Measure F sales tax increase.  We made this decision with some reservations. Our letter in September 2010 stated:

“City Council members and City management have indicated that they will continue to address pension reform. Normally, we are skeptical about promises in the political world. But, in this instance the Council, management and employees have earned a substantial degree of trust as a result of the recent significant budget cuts and the first steps in pension reform."

Now, after these current 2012 negotiations, it is clear that the existence of Measure F funds has eliminated the sense of urgency for pension and compensation reform.  We have to conclude that Measure F actually played a role in the disappointing results of this negotiation.

I now personally regret my decision to endorse Measure F back in 2010.

What Next?

It is now clear that the needed long-term reform will not be achieved through the bargaining process.

I believe it is time for Novato to go to the ballot box. Labor negotiations two years ago and then again this year have failed to produce satisfactory results. It’s time to go to the next level.

A number of us are giving serious consideration to two ballot approaches:

  • A pension reform initiative modeled after San Diego or San Jose that passed by convincing margins, plus
  • Repeal the remaining years of Measure F, Novato’s five-year half-cent sales tax increase.

Citizens get it. They are tired of supporting excessive pensions with increased taxes. We believe both measures will have an excellent chance of passing.

Dave Robertson July 21, 2012 at 05:08 AM
This City, along with most of California and local governments wastes tons of money. If we spent money like this city does, we would be in serious trouble. The City should not be buildings for offices. The city should be spending less on all employees. The city should pay attention to the bills that come in from every side. California in general has become nuts. We have income tax rates as high as 10.3%, sales tax rates higher than most states, and now the state wants to raise taxes another 3% at the top tiers, and all the cities and counties keep on tacking more sales tax. What makes this city and state so special as to spend money like this?
Dave Robertson July 21, 2012 at 05:12 AM
Every half cent adds up. It's not just the police and fire departments. It's most of the City staff. Its most of the California state workers. We like in Tax-ifornia. It's going up with time and its all getting very old. What do we see to show for all the money we pay? Certainly not what we pay for.
Dave Robertson July 21, 2012 at 05:17 AM
Wall street may indeed be fleecing America. But that has nothing to do with the bankruptcies you mention. Who do you know in the private sector who gets the kind of retirement deals our public employees get? I worked in Silicon Valley for years and never saw anyone get a dime other than the large company major players. Everyone else got to contribute to their 401K. Most of the baby boomer generation can't afford to retire. That is not nearly the case with people from the public sector. It's easy to tax people, it's hard to control your spending. It's epidemic all around this country too.
Dave Robertson July 21, 2012 at 05:21 AM
The police, fire fighters, nurses and teachers do not do those jobs for the money. Everyone deserves fair pay - but no one deserves excessive pay and benefits. That's why they call it "public service". If you want to make a lot of money become a stock broker. These are hard times, and we are approaching a crossroads where the citizens need to decide whether they want to have their government tax them to pieces forever.
Dave Robertson July 21, 2012 at 05:24 AM
Yes, and a ballot initiative this fall has been introduced (by Gov. Brown no less!) that will add as much as 3% to the top tiers of state income tax. When does this madness ever end? The top rate in Virginia is about 6% and Maryland is about 7%. Why is California so special to go in excess of 13%?

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