Introduction

 

For the third time in the past decade the City will ask Vallejo voters to approve a sales tax measure on the November ballot.  We urge residents to vote No on Measure G.  The need to come to grips with the City’s deteriorating financial condition remains critical, but throwing more tax dollars at the problem without addressing the underlying causes will not get us where we all want to go.  At the heart of any decision to set tax policy lies the question of fairness, and we need to ask how well the current collection and allocation of resources serves the interests of ordinary residents.  Increasing taxes without comprehensive budgetary reform would only help City officials avoid asking the hard questions a little while longer while adding to the burden of those least able to carry it.  

 

The incoming Council will face a challenging period of continued fiscal instability, heightened by the economic impact of the Covid pandemic.  According to the League of California Cites, over 90% are now considering employee layoffs or furloughs, and/or cutting back on city services.  So why not reach for the obvious solution with another 3/4% local tax increase under Measure G?  

 

Politics is a process of determining who gets what, and who will foot the bill.  Sales taxes are inherently regressive, taking a much greater share of income from low and middle-income families than from wealthy families.  Measure G is technically a “transactions and use tax,” but collected in the same manner as a sales tax with a few minor exceptions.  The lower one's income, the higher the overall effective state and local tax rate.  The lowest-income 20 percent of taxpayers face a state and local tax rate more than 50 percent higher than the top 1 percent of households on average, according to the Institute on Taxation and Economic Policy.  The City’s economic problems reflect the struggles of its residents, and we should share the costs in solving them equitably.

 

Setting aside the fundamental question of tax policy fairness, recent City history does little to instill confidence that the money would go where it’s needed most.  A quick look at the last decade of budgeting and tax measures sets the stage for the decision in front of voters in November.  How did we get here, and what does that history say about what we might expect if we vote to approve more local taxes now?

 

Background

 

Vallejo had a budget of $79.6 million in 2008-2009, and lost around one-quarter of its revenue stream as local sales taxes and real estate development fees collapsed.  The City found itself unable to pay all of its bills, and the Council voted unanimously to file for bankruptcy with an estimated 1,000 to 5,000 creditors.  A city’s bankruptcy differs from corporate bankruptcy in that it does not allow for selling off assets like public roads and buildings to pay off debts.  The bankruptcy judge determines whether the proposed reduction is fair to all people the city owes money to, including workers, pensioners, bankers, suppliers, and investors.

 

The major issue revolved around the city’s contractual obligations to its own unionized employees.  Base salaries in Vallejo were set at 10% above a 14 city average with an additional 30% added for extra pay categories.  Many opted for early retirement ahead of the bankruptcy, having been able to stockpile unlimited accumulation of sick pay, three years accumulation of holiday pay and four years accumulation of vacation pay.  These accumulated benefits could easily add up to a $200,000 payout per employee upon retirement.  After 30 years service they could retire with a pension that amounted to an extraordinary 90% of their final salary with the City covering 100 percent of their health care costs.  Vallejo argued that its bankruptcy options should include a reduction of employee wages and benefits, and changes in working conditions if necessary without union consent - and the judge agreed.

 

Ultimately the Council decided that it didn’t have the the time or resources to take on the State agency that manages pension and health benefits for more than 1.6 million California public employees.  As the largest public pension fund in the United States, CalPERS is an 800 pound gorilla whose investing decisions can move markets.  While the decision to stand down avoided costly legal battles, it left the City’s main expenditures - wages and pensions - largely unchanged.  The bankruptcy filing ultimately cost Vallejo more than $20 million in court and legal fees. 

 

That legacy continues to severely limit the City’s budgeting options today.  One of the most expensive employee positions is the sworn police officer, and their number currently stands around 105 with 122 positions budgeted for.  The current average police salary is $152,517 with an additional $93,663 pension payment. With all costs the average total per officer is $317,330.  

 

Vallejo’s police and firefighter pension rate - the percentage of an employee's base salary paid into the pension fund - is among the top two dozen listed by CalPERS.  For example, a rate based on 100 percent of pay means that for every $1 in base salary paid a policeman or firefighter, another $1 must be paid to CalPERS.  It was 28.1 percent of pay in Vallejo in 2008, and more than doubled to 68 percent of pay this fiscal year.  It will increase to 78 percent in July, and in 2024 will grow to an estimated 90 percent of pay.  Vallejo general fund spending on pensions was comparable to the 11 percent average among California cities last fiscal year.  But Vallejo spending is projected to reach 20 percent by 2024, significantly more than the average of 16 percent according to a Bartel actuarial study.

Measure B

 

In 2011 with the economy still struggling in the early stages of recovery, the City put Measure B on the ballot.  It was pitched as a temporary 1% sales tax for the next ten years.  The stated purpose was:  “To enhance funding for 9-1-1 response, police patrols, firefighter and paramedic services, youth and senior programs, street and pothole repair, graffiti removal, economic development, and general city services.”  Measure B passed in 2011 with a razor thin margin of only 159 votes. The first year budget  reflected a fairly even distribution of Measure B revenue spending among a range of programs, as the ballot language suggested.

Participatory Budgeting received the largest Measure B investment during the first budget cycle.  PB is an innovative program that allows residents to develop and submit projects and then vote to dedicate City funding for the winning projects.  But look what happened over the following budget years.

Here’s what the breakdown looks like two years later.  Public safety expenditures have eaten the lion’s share of Measure B investments.  And the trend continues into 2016. 

 

In 2016 Vallejo put Measure V on the November ballot which made the ten year temporary Measure B sales tax increase permanent.  The proponents were still touting investments like road repair and youth services, while the money just goes into the general fund where it can be spent for any purpose. 

 

Measure G

 

On July 30 of this year the Vallejo City Council approved Measure G, to appear on the Nov. 3 general election ballot.  Measure G would tax retail sales at the rate of three-quarter cent (0.75 %) of the sales price, or three-fourths of one cent for an item that costs one dollar.  The current rate in Vallejo is 8.375 percent, for which the city of Vallejo receives two percent.  Measure G would jack up the combined effective sales tax in Vallejo to 9.13 percent. 

 

Now we’re hearing one more time about fixing potholes and services for seniors, veterans, and homeless families.  Fool me twice (or three times), shame on me.  The City hired the consulting firm that advised Councilmember Brown in his run for office to conduct the public relations campaign urging voters to approve Measure G.  Mr. Brown is seen on video declaring to constituents that if he needs to give the police an expensive new waterfront headquarters so they will treat young Africans better, that’s what he will do.  The Council recently voted to spend $14 million to buy a building for that purpose that will need an estimated $35 to $40 million more in renovation.  Another vocal proponent of the measure is Jon Riley, a retired Vallejo fire captain.  How focused are they really on the homeless, seniors, and potholes?

 

Measure advocates also claim that: “YES on G reforms local police practices with greater community transparency and accountability.  Implementation of a responsible, community-based prevention model is necessary to restore public trust and confidence.”  We call that total nonsense.  There is nothing in the language that would implement such badly needed reforms.  The measure’s guidelines make it clear that the general tax proceeds may be used for any municipal purpose. 

 

What we need is a citizen’s police commission with some teeth, not another public relations effort, which is all any minor expenditures in this category would amount to.  A succession of city managers and elected officials have been unable or unwilling to do anything about a culture within the police department that results in horrific treatment of minority residents and repeated incidents of terrible judgment that have cost the city at least $13 million in taxpayer-funded legal settlements since 2011.  We’re going add to the financial burden of our low income residents so we can continue funding this dysfunctional mess? 

According to the Washington Post: "Since 2009 the police have killed 20 people, an extraordinarily high number for such a small city....In 2018 Vallejo decided to leave the insurance pool used by California municipalities rather than pay higher premiums to make up for its legal settlements, which were burning up a disproportionate share of the group’s money."  The same article from June 23 of this year quotes Danté R. Quick, pastor at Vallejo’s Friendship Missionary Baptist Church, who offers up the explanation that the police officer's union wants the public to accept. “Our police department is woefully ‘defunded’ — which has led to overworked, underpaid and therefore underqualified police officers,” Quick said.

Proponents of Measure G will argue that the high crime rate in Vallejo is directly relat​ed to a lack of investment in public safety that has crippled efforts to recruit enough new officers.  Mayoral candidate Brown has advanced that thesis in public.  But is it true that our only option to realize an increase in public safety is to devote an even larger share of the City budget to police and firefighter salaries?  How direct is the relationship between the number of sworn officers and the crime rate in Vallejo? 

There's no question that our current crime statistics paint a pretty bleak picture.

 

  • Vallejo crime rates are 72% higher than the national average

  • Violent crimes in Vallejo are 101% higher than the national average

  • In Vallejo you have a 1 in 23 chance of becoming a victim of crime

  • Vallejo is safer than 6% of the cities in the United States

  • Year over year crime in Vallejo has decreased by 4%​

The proponents of Measure G will argue that we need more officers and the only way to get them is by voting for another tax hike.  We currently have 105 sworn officers and have been budgeting for 122 since 2018 - but they have not all been hired.  The Vallejo Police Officers Association was in charge of hiring new officers.  The City job posting for police officers stipulates: "The number of candidates referred for a final hiring interview is at the discretion of the Police Department."  Since our police force is reported to be severely understaffed, why not hire for positions already funded? In addition to the 17 unfilled positions already budgeted, another 7 or 8 have recently been approved under a grant to the City.  Together they would represent nearly a 25% increase in officers with no new taxes needed.  

Maybe as Pastor Quick suggests, all the applicants have simply been substandard because the salaries we offer are too low to attract any qualified applicants.   We can see for ourselves what kind of salary and benefit packages we pay our police professionals.   The following salary table is an excerpt from the 620 City of Vallejo employee records available here ...

Skim the total pay and benefit numbers in the right hand column and see if they look ridiculously low to you.  Too low to interest enough qualified applicants to fill a couple dozen positions?  Look at the overtime pay numbers and their uneven distribution.  Might there be a connection between the exorbitant overtime pay for some some employees and a shortfall in authorized new hires that would shave those numbers? 

2018 salaries for Vallejo

 

Measure G claims to promote police reform, but would only help avoid a badly needed public discussion about City budgeting, transparency, and accountability.  We must question the simplistic assumption that our crime rate is directly related to our level of spending on policing.  While some studies indicate that an increase in sworn police officers can reduce instances of crime, factors that compete for public investment such as social welfare, access to health care, and other social services have also been shown to decrease crime rates.  

 

It’s unclear the extent to which increases in police spending are responsible for falling rates of violent crime.  Many cities with similar homicide rates spend vastly different amounts on policing.  Both Long Beach, California, and Mesa, Arizona, saw 4.7 homicides per 100,000 population in 2017. That year, Long Beach spent about $1,500 per resident on police, while Mesa spent $800.  It matters how the money is spent. 

 

“The perception was that the police have a direct relationship with crime, so the more police ... the lower the rate of crime, we thought.  But that has not been the case for some time,” says Dr. Howard Henderson, founding director of the Texas Southern University Center for Justice Research. “There are other factors that are at play that affect that relationship beyond simply just the police's presence.  I think that for the first time in the existence of policing as we know it, they are now going to have to justify every line item of their request.”  The NYU School of Law’s Policing Project suggests bringing more cost-benefit analysis to police budgets.. “Helping departments and communities to think about the long-term implications of policy changes, of investments ... whatever it may be, having those conversations up front, is hugely important,” said Lauren Speigel, research director at the Policing Project.

Data shows that 9 out of 10 calls for service are for nonviolent encounters.  That doesn't mean that an incident will not turn violent, but police at times contribute to the escalation of violent force as we have seen repeatedly in Vallejo.  The skillset and training for police officers are often out of sync with the social interactions that they must engage in.  Police officers are  trained in use-of-force tactics and worst-case scenarios to reduce potential threats but most of their interactions with civilians begin with a conversation.  Reducing officer workload and stress by sharing responsibility and funding with other government actors could contribute to the likelihood of solving violent crimes.

 

A recent article for Open Vallejo by reporter John Glidden highlights how committed the Vallejo Police Officers Association remains to blocking consideration of any such reforms.  (Read the article here and consider supporting the good work Open Vallejo is doing.)  

 

The VPOA has filed a complaint with a State labor board alleging that the City decision to hire a police spokesperson - a job that has traditionally been performed by a police sergeant - amounted to a breach of fundamental fairness by unilaterally restricting a sergeant’s duties.  The union is asking for an order to force the City to undo its decision and post a notice of its unlawful conduct.  What does that say about the prospects for lifting  that part of the burden from overworked and overstressed officers that is not directly involved with investigation of violent crime?

 

According to one expert quoted in the Open Vallejo article, the board’s decision could resonate far beyond Vallejo.  “This litigation raises a hugely significant issue that is going to affect police reform in cities across California,” Catherine Fisk, a Berkeley law professor, told Open Vallejo. “Can cities decide that some functions that previously were done by armed or sworn officers should instead be handled by civilians, or eliminated entirely?” “Or must the department first negotiate with the officers’ union, with all the delay involved in negotiation and in resolution of the negotiating dispute by mediation, arbitration, or fact finding?”

It would be premature to reach for a new tax levy that will take the largest share of income from the residents who can least afford it - and who suffer most from the chronic problems with our police force.  This situation where the public safety unions make all the critical cost/benefit management decisions and hand taxpayers the bill is not acceptable when those costs threaten to overwhelm the City budget and crowd out other vital services.  It isn't just the number of officers that matters, it's also what they do - or don't do.  It's obvious that the police department has been badly mismanaged for many years with the complicity of a series of City officials.  Rewarding that dysfunction with a new infusion of tax dollars and an expensive new waterfront headquarters facility is no prescription for reform. 

 

We may yet decide that we need significantly more sworn officers after the positions already paid for have been filled, and after a careful analysis of the current budget to look for savings and weigh the relative costs and benefits of competing social service investments.  Then let's come up with a way to pay for it that doesn't hit our most vulnerable residents the hardest.  Somehow in the midst of this crisis of crime and underfunded policing we managed to subsidize two municipal golf courses to the tune of 4 million dollars over the past nine years.  Let's try and be fair when it comes to taxing and spending.

This election will be critical in determining the direction the City will take in the coming decade.  We hope that voters recognize that a vote for Measure G and the candidates who support it - like Mr. Brown and Ms. Verder-Aliga - would be a vote to continue the status quo by shoveling even more tax money into the black hole of pensions and salaries gradually swallowing our City budget.  Measure G will only enable a Council hobbled by allegiances to special interests.  We need new leadership and independent voices on the Council who can bring fresh eyes to the budgeting process and the issue of police reform.  

We recommend a NO vote on Measure G.

See the Voices November 2020 Vallejo Mayor and Council Endorsements here...