Will the people pay for services?
As more local government revenues continue to deplete and shift to state coffers, city and county leaders are looking to the people to make up the difference.
Case in point is this week’s South Lake Tahoe City Council meeting, where the council will hear two separate presentations about possible increased taxes to pay for city and county services.
The city’s Parks and Recreation Department wants direction on creating a Joint Powers Authority – part of which would include a voter-approved, $25 to $50 property tax to fund recreation on the South Shore.
The El Dorado County Department of Transportation is asking for the council’s guidance on a half-cent sales tax proposal that would subsidize street maintenance, construction of new roads and snow removal service.
Government leaders say the biggest reason city and county services are being downsized is the property tax shift that took place during the state budget crisis in the early 1990s. Money was taken from local general funds to pay for schools, so that state education money could be used for other services.
An Assembly bill designed to replace that money is still alive in the California Legislature, but its outcome will not be known until after the state budget is determined.
“Local governments have been forced to look beyond their regular tax base at other revenue sources to fund services that in the past could have been easily accomplished in the existing tax base,” said Kerry Miller, South Lake Tahoe city manager.
Facing a long-term budget deficit of $1.4 million, city leaders cut $400,000 of its subsidy for parks and recreation over the next two years.
In order to assure the future of recreation in South Lake Tahoe, a group of community leaders are proposing the JPA – including the city, county, Lake Tahoe Unified School District and Lake Tahoe Community College District – as the best solution. The voter-approved special property tax would be administered by the JPA to upgrade existing recreation facilities and build much-needed playing fields, bike trails and parks.
“If we could have back the money the state took, we would have money to take care of recreation without any discussion about JPAs and special assessments,” Miller said. “The magnitude of the takeaways have made that happen.”
Diana Buckley, fiscal administration manager for the El Dorado County Department of Transportation, said the county faces a similar situation, which is why some source of steady revenue is needed to fund road services.
The county’s general fund loses about $8.9 million annually as a result of state takeaways. Prior to that, the DOT was subsidized by the general fund.
Making matters worse is that other sources of road revenues – gas tax and federal forest revenue – are flattening out.
“As cars become more efficient and use less gas, the revenue doesn’t keep up with the cost of materials for maintenance,” Buckley said. “And due to a lot of environmental concerns about timber harvesting, that revenue has declined.”
She said the county’s purpose in approaching the city is to try to come up with an agreement about how the money will be spent, should a sales tax increase be approved. Arguing about that important detail will not help convince voters the tax is a good idea, she said.
Miller said the city will be concerned with two issues related to the county’s proposal.
First, whether the South Shore will receive from the tax an amount equal to what it generates. Second, to make sure El Dorado County’s proposal does not conflict with what may be occurring regionally as part of President Clinton’s visit at the end of July.
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