Guest Op-Ed by John Capoccia – Measure UUT – Your City, Your Choice, Pt. 1 of 3

Posted 3/10/14 – I’ve received the first of three parts of an EDITORIAL OPINION piece by City Council Member John Capoccia regarding the UUT measure on the April 8th ballot.  I’ll post the others as I receive them (Click link to read Parts 2 and 3 of John’s Op-ed.  Part 2   Part 3).  Differing viewpoints are always welcome, as long as it stays civil.  Feel free to use the comments section to voice your opinion (as long as this is the featured article on the home page, you will need to click on the headline to go to the article’s page to make a comment).

Measure UUT – Your City, Your Choice, Pt. 1 of 3

Guest Editorial by John Capoccia

On April 8, Sierra Madre will vote on Measure UUT, which is asking you to decide whether or not to cap and extend the current 10% Utility Users Tax rate.  Measure UUT is not raising your utility tax rate.  You’re paying 10% today, and if you vote yes on Measure UUT, you’ll continue to pay the same 10%.  If Measure UUT fails, the tax rate will sunset to 6% by June 30, 2016, resulting in a loss of approximately $1,000,000 annual revenue.  I’m voting in favor of Measure UUT, and I’ll explain why  in a three part series.  I hope you’ll agree with me and vote Yes on Measure UUT.

Measure UUT gives Sierra Madre a choice – Do you want to continue to provide the means for our town to prosper as it has, or shall we force revenue reductions that could have far-reaching and unpredictable effects?

My wife Marta and I moved to Sierra Madre thirty one years ago.  We came here because of Sierra Madre’s small town atmosphere, low crime rate, eclectic neighborhoods, central downtown, and its proximity to the beautiful San Gabriels. Sierra Madre had a great reputation as a place to raise a family.   I can attest to that, our three children thrived growing up in this wonderful town.  Thirty one years later, people are moving here for the same reasons.  Let’s ensure that future generations feel the same.  Please take a hard look at what your tax dollars do to keep Sierra Madre the wonderful place that it is before you vote.

You’ll recall that when I ran to serve you on our City Council two years ago, I was against Measure 12-1, which was similar to what’s before you in Measure U, but different in significant ways.  I was against Measure 12-1 because:

1. It would have automatically raised your utility tax to 12% on June 30, 2013 without a council vote (I didn’t think a 12% tax was necessary and I still don’t)
2. It was premature.  The current 10% tax rate is scheduled to sunset starting July 1, 2015.  There was no need to make a decision three years early while still sorting out the effects of the dissolution of the Redevelopment Agency and the recession, and before giving the new council a chance to assess Sierra Madre’s finances
3. Public Safety was fully funded in the then-current budget.  I did not believe that public safety would have been in jeopardy had Measure 12-1 failed, and thus far there have been no harmful effects

Two years have elapsed, and your City Council and staff has continued to exercise prudent expense management.  Allowing the UUT to sunset will be detrimental to keeping Sierra Madre the terrific place as we know it.

First, some background.  We’ve had a Utility Users Tax since 1993.  The original UUT was implemented to mitigate the effects of Proposition 13, which limited property taxation below the rate of inflation.  Property Taxes are the main source of revenue to fund municipal operations for most, if not all cities.  Sierra Madre was forced to find new sources of revenue or cut services below a level that its citizens would tolerate.  Sierra Madre was also affected by the demise of small “mom and pop” retailers in favor of big-box.  As a result, our sales tax revenue is miniscule, approximately 2% of our General Fund revenue. Most would agree that it’s a good thing that we don’t have big-box or other chain type retailers here in Sierra Madre, but the penalty is diminished revenue.

In 2008, Measure U was placed on the ballot to raise the UUT from six percent to twelve percent, and it expanded the categories of utilities to be taxed.  There were two reasons for the tax increase.  One was to give our Police Department a raise in pay, as their compensation fell significantly behind their peers in the San Gabriel Valley.  The other reason was to provide continuing funding for our newly formed Paramedic program, which was implemented the year before using start-up money from the sale of the canyon fire station.  A citizen’s committee recommended the utility tax increase that was placed on the ballot.

It’s interesting to note that at the time Measure U was placed on the ballot, Sierra Madre had received four years of healthy property tax revenue increases as a result of the huge run-up in residential property values.  Even with the revenue surge, the citizen’s committee recommended the UUT increase. Sierra Madre’s voters agreed with the recommendation, approving Measure U by 62%.  I’m sure it helped that the Council Members Kurt Zimmerman, John Buchanan, Don Watts, Joe Mosca, and Enid Joffe unanimously supported the tax and were signatories to the “Argument in Favor” that appeared on the ballot.

Our Police officers were given raises in three consecutive years of 9%, 8% and 7%, which merely served to bring them from far below their peers in the San Gabriel Valley, to where they are now, which is at or very near the bottom.  Nevertheless, the higher pay has allowed the Sierra Madre police department to attract better candidates and raise the standard for professionalism and integrity.  We now have a better police department as a result.  The UUT increase also allowed us to fully fund our Paramedic program, the cost of which is approximately $500,000 per year, to better serve our increasingly aging population.  The number of paramedic-only calls has been increasing steadily year over year, and our response times are superlative, an average of just over 4 minutes.

We all dislike paying taxes.  As a fiscal conservative,  I abhor waste and inefficiency, and cringe every April after filing my tax returns and thinking that my tens of thousands of hard-earned dollars goes to federal and state programs that I don’t believe in.  As a Council Member, I resent having to comply with state mandates that waste your tax dollars, provide a comfortable living for bloated bureaucrats, and consume our City’s precious staff time.  However, at the local level, and especially here in Sierra Madre, your tax dollars provide for your safety and security, common public facilities and community programs.  Your local tax dollars are used efficiently for your benefit, and are spent primarily on basic services that you collectively value.

Next week, I’ll take a closer look at our what your tax dollars provide for you and your community. Then I’ll review our revenue prospects and other factors and will summarize my view.

I’d love to discuss with you and hear your ideas on the best way to manage the Sierra Madre’s resources.  If you’d like, please call me on 355-6407, or you can email me at jcapoccia@cityofsierramadre.com       Click link to read Parts 2 and 3 of John’s Op-ed.  Part 2   Part 3