TERRIBLE TIME FOR TAXES

February 02, 2012 | Daily Republic
Attack of the taxes
by Kelvin Wade

Reading that the Fairfield City Council is considering a tax measure for the November ballot to help soften the impact of an $8.25 million budget hole isn’t surprising. The state has dealt a severe blow to local governments by killing redevelopment agencies.

Asking financially strapped Fairfielders to hike their own taxes is a tough sell. The spending cuts are going to be painful by themselves. With no revenues, truly draconian cuts are in our future.

Barry Eberling’s article on the $8.25 million budget hole Fairfield faces contained a paragraph that was truly shocking:

“Fairfield could shut down the senior center, the Allan Witt sports center and aquatics center and the Center for Creative Arts, stop maintaining all parks, roadsides and city facilities, end code enforcement, lay off six firefighters and turn off all street and pedestrian lights and save $3.6 million.”

That would be less than half of what we’d need to cut. City Manager Sean Quinn, who prepared the list, wasn’t proposing the cuts, but wanted to show the magnitude of what the city faces.

The truth is everyone is for tax increases and spending cuts as long as they’re not affected personally. Gov. Jerry Brown got some good news in a Public Policy Institute poll last week that shows 68 percent of likely voters, including majorities of Democrats, Republicans and independents, support his proposed tax plan. His plan would raise income taxes by 1 to 2 percent on individuals earning more than $250,000 and $500,000 for couples.

The proposal also calls for a five-year half-cent sales tax increase. However, the poll found that 64 percent of likely voters opposed that aspect of the plan. Wonder why.

Not that there’s ever a good time to talk tax increases, but it’s a particularly hard year for such a measure. Already in June, California voters will be asked to increase taxes on cigarettes for cancer research. Also, Fairfield voters will be asked to reauthorize the eighth-cent county library tax. That measure wouldn’t increase anyone’s taxes, so it stands a good chance of passing.

But then the state is going to ask for that half-cent sales tax increase in November. And there could very well be other tax increase measures on the ballot, trying to raise funds for education. And if Fairfield voters are also asked to increase taxes on a local basis, that’s a hard sell.

In addition, it won’t be taking place in a vacuum. Everyone knows that the Bush tax cuts expire at the end of the year. Federal, state and local tax hikes all at once while we’re slowly digging out of a recession is a burden for which few are prepared.

It’s a real dilemma. If the state tax measure fails, we’re going to see deep cuts in education and social services. And on the local level, if we have to fill that budget hole solely with cuts, it’s going to drastically change Fairfield as we know it. Good people have already lost their jobs this week. We would have a community in disrepair. If we get to the point of having to cut first responders, we’re talking about budget decisions that can be life and death.

Obviously we’ll have to see what form a local tax measure takes. But the honest reality is that the only way we’re going to put our fiscal house in order is deep spending cuts and increased revenues and it’s going to hurt. We’re not going to do this without pain. Peace.