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Bates: Let’s Tax Gasoline and Natural Gas in Berkeley (News Analysis)

By Zelda Bronstein
Tuesday April 03, 2012 - 08:10:00 PM

The city of Berkeley is falling apart. Deferred maintenance on the town’s deteriorating infrastructure—streets, public pools, street lighting, parks, recreation facilities and community centers, storm drains, seismic retrofits of city buildings—has led to $523 million worth of identified, unfunded projects. Between March 14-19, likely Berkeley voters were polled over the phone about possible bond measures for the November ballot whose passage would go toward paying for the repairs. On April 3, the council viewed the sobering results : none of the proposed measures came close to the 67% required to pass new property taxes. Grasping for alternative sources of revenue, Mayor Tom Bates proposed that a follow-up poll ask about a “green tax” on petroleum and a “carbon fee” on natural gas in Berkeley. 

The city paid Lake Research Partners $24,000 to poll 430 voters in a 17-minute survey. Though a majority of the respondents acknowledged the need for infrastructure improvements, and 68% rated both streets and storm drains as important or extremely important, the highest approval rate was only 59% for a $25 million bond for storm drains and water quality. A parcel tax that would raise $1 million for homeless services received a 58% yes response. 

Lake Associates’ David Mermin told the council that if tax measures face well-funded opposition, they generally lose. If there’s no opposition, “you can lift the yes vote” to the 67% threshold needed for approval. “It’s hard to lift,” he said, “but it’s possible”—if you’re starting at 62 or 63%. “That’s a lift that can be done.” But if you’re starting at 56 or 57%, reaching 67% is “pretty tough.” He also emphasized that undecided voters “tend to break toward a no vote in a bond election.” 

Mermin also explained that in the interest of maximum predictability, the sample of likely voters was weighted toward the hills (41%), homeowners (62%) and people who’ve lived in Berkeley ten years or longer (76%)—percentages that are not representative of the city’s entire voting population. In response to a question from Councilmember Wengraf, he said that the hills are defined as Districts 5, 6 and 8. 

With one exception, the council appeared to write off new property taxes. “The property tax is poison,” said Mayor Bates. “People have had it.” The exception was Councilmember Arreguin, who said that when the council had discussed the questions for the survey, he had asked that people be polled about adding 2% tax on the gross receipts of owners of 5 or more residential rental units. He wondered why that question hadn’t made it onto the survey and requested that it be included in the follow-up poll planned for May. Councilmember Wengraf asked the city attorney to see if such a levy would count as income tax, which, she said, would be illegal. 

Mayor Bates and Councilmember Wozniak had a different idea: assess a “green tax” on gasoline purchased in Berkeley and “a carbon fee” on Berkeleyans’ natural gas use. Revenues from the former would go to street repairs, from the latter to “climate action activities,” in particular watershed services. When Councilmember Capitelli noted that a sales tax is regressive, the mayor agreed: “It is regressive.” He went on to say, however, that rent, food and medicine are not taxed. Bates also said that if 67% of respondents in the follow-up survey were agreeable to the gasoline tax of ¼ cent, he would talk to other cities about imposing the same; otherwise, everyone would leave Berkeley to buy gasoline. 

Councilmember Moore headed in another direction. Citing the reduced size of the Berkeley police force and “the need for more police officers,” he said he’d “like to see a question on the follow-up poll about money that would go to hire more patrol officers.” 

City staff and the pollster will return to the council on May 1 with sets of questions to be reviewed for the follow-up survey. Should the council decide to place a bond or tax on the November ballot, it will provide direction on ballot language on June 12, review the final ballot measure language on July 10 and finalize the measures on July 17. 

The April 3 discussion could have been billed “Reaping What We’ve Sowed.” For years, the mayor and council have lavishly praised each other and the succession of city managers and budget directors for their collective “prudence” in managing Berkeley finances. After the council has approved each annual budget, Bates, now in the tenth year of his mayoralty, has triumphantly announced that once again, the city has balanced its budget. 

But California law requires every city in the state to balance its budget. The question isn’t whether you balanced yours, but what you had to do to balance it. At least, that used to be the question. Now, with Vallejo as the national poster child for municipal bankruptcy, with Stockton apparently about to follow suit and with many other cities grappling with multi-million dollar shortfalls, the question may be changing. 

The main reason Berkeley isn’t in Vallejo’s and Stockton’s shoes—yet—has been its citizens’ habitual willingness to tax themselves. There was a hiccup in November 2004, when Berkeley voters said no to four city tax measures. But that was the exception, as a glance at any property tax statement for a Berkeley parcel purchased after 1978 (the year Prop. 13 passed) will demonstrate. 

If the results of the March phone survey indicated that the party is over, Tuesday’s discussion suggested that our electeds are not prepared for that eventuality. Mayor Bates opened the meeting by saying, “This is unacceptable.” What neither he nor any of his colleagues on the dais also said is that their inordinate generosity to city staff is a major source of Berkeley’s fiscal woes. 

Before asking likely voters if they’re willing to pay higher taxes to fund more Berkeley police officers, the pollsters conducting the follow-up survey in May should inform respondents that in fiscal year 2012, Berkeley police officers’ average salary was $125,652; that their benefits (pension, health insurance plus workers comp) averaged 74% of their salary or $92,242; and that their total compensation averaged $217,894 a year. 

Indeed, before posing any questions at all about new taxes, the pollsters should tell respondents that last November former city Manager Phil Kamlarz retired with an annual pension of $250,000, joining 74 other city of Berkeley retirees who are getting pensions over $100,000. 

Also they should state that according to data obtained by the San Jose Mercury, in 2010 over a quarter of city of Berkeley employees—380 out of 1,529—had a base salary over $100,000; and that when cash payments, including overtime, are added, 30% of city staff landed in the $100 K club—and that’s not counting their fringe benefits. Mention, too, that personnel costs account for 77% of city expenses. 

Then and only then, ask those voters if they’re willing to pay higher city taxes.