by Edward A. Ristow
Claims are misleading that the City will immediately have to slash essential services if Utility Users Tax (UUT) revenue is lost. The City has reserves of $11.9 million in the general fund, and could easily spend its undesignated portion of $6.8 million to maintain the current level of services until property-tax and other revenues increases naturally.
The notion that UUT revenues are used for certain specific services is a fallacy. These revenues go into the general fund and are available for any general fund expense. It would be just as valid to say the tax pays the unfunded pension liability for future pensions than to say that it explicitly funds police and fire salaries.
Although it was not stated in the ordinance, the original purpose for the UUT in 1983 was to pay for road and sidewalk repairs. Thirty-five years later the tax still exists, yet we still have a $60 million backlog of road and sidewalk repairs and the UUT revenue can be spent on virtually anything.
The threat of losing the Utility Users Tax is a wake-up call to the City, which is on an unsustainable financial path. Runaway expenses are leading to bankruptcy. Excessive pay and outrageously generous pension benefits (which grant many retirees over $100,000/year) will soon force cancellation of many services because pensions take priority in bankruptcy.
The City’s financial statements show an unfunded liability of $29 million for future pensions, based on an unrealistic 7% annual return on pension-fund investments. To fully fund future pensions would require all the City’s income for at least two years. Significant changes in the way the City operates must be made to bring expenses under control. All options should be considered such as moving retirement benefits to a 401(k) type plan for new city employees, negotiating more reasonable salaries and benefits for city employees, privatizing certain operations, combining positions, utilizing volunteers, sharing equipment, personnel and facilities, etc. Our fiscal future depends on limiting spending, not on increasing revenues which go up automatically as property taxes increase.
Proponents of this initiative are long-time South Pas residents—not “outsiders”— and value as much as anyone the amenities that define our quality of life. But City priorities have become skewed toward enriching public employees rather than minding taxpayer interests. Consequently, I urge everyone to Vote YES on Measure N for the betterment of all. For more information visit www.SouthPasTax.org.