The bailout plan

It can’t be just those of us here at the CN&R who see the problem with a proposal of some sort of new local tax coming from residents who are most definitely well-heeled by Chico’s standards.

Indeed, one of the main champions behind the effort is a former Chico city manager whose annual public pension is more than three times Chico’s median household income of $42,000. That’s a hefty retirement and indicative of why we think it’s appropriate to bring a dose of reality into the equation.

Fact is, Chico is not a wealthy community. This isn’t Danville, Palo Alto or Mountain View. Here, about one-quarter of the population lives below the poverty line. And we’re concerned that the engineering of a new tax measure would hurt low-income residents and those on fixed incomes, especially the elderly. It’s through that lens we see this issue, and it’s imperative for the business people behind this effort to consider those folks as well.

The specter of a local sales tax hike has been floating around—mostly behind the scenes—for many years. But this is the first time we’ve seen the conversation get truly serious—with the Chico Chamber of Commerce forming a task force to research the topic and urging city officials to “consider a revenue measure,” as the organization put it in its special report released during the annual Business Summit and State of the City event (see “Time to tax?” by Ashiah Scharaga, page 10).

Back in 2014, the idea of a local sales tax increase surfaced as a way to generate revenue to pay explicitly for public safety.

Years earlier, in 2011, the aforementioned former city manager, Tom Lando, along with other local business people, pitched one in the form of a .75 percent increase. Their idea was to dedicate the additional revenue to a variety of things, including the hiring of police officers; high school sports, theater and arts; library operations; and a “pothole fund.”

Neither of those proposals took off.

Going back even further, similar discussions took place shortly before the start of the economic collapse leading to the Great Recession. According to the CN&R’s archives, the talks were stanched based on analysis revealing that “over the past decade, the city has increased its compensation, especially for police officers and firefighters, at a rate far exceeding the growth in the Consumer Price Index, the city’s population and, most important, its general fund revenues.

“Salaries and benefits have gone up by a whopping 161 percent, while the CPI has increased by just 34 percent, the population by 43.5 percent, and general fund revenues by 112 percent.”

And that gets to the root of the matter here. Chico’s public salaries and benefits, especially its pension obligations for public safety personnel, have grown unaffordable. What we’re talking about is a taxpayer-funded bailout. Moreover, it’s a bailout that comes at a cost for those who struggle to make ends meet.

We’re not here to argue that Chico doesn’t need an infusion of cash to pay for infrastructure maintenance and upgrades, including for our badly degraded roads, street trees and parks. All of those things are in sorry shape because they’ve been left to rot as the city cut the necessary funding to maintain them in order to meet payroll and pension demands that were inflated to unsustainable levels.

We get that the people behind this effort want to make Chico a better place to live, and we appreciate that sentiment. How we get there is the sticking point.

Fortunately, any sort of tax increase must come before the voters. In our minds, what that means is that the tax proponents have to come up with a proposal that 1) hurts the vulnerable the least, and 2) is earmarked specifically to pay for the things that have been left by the wayside, not to fund the overly generous compensation packages that got us to this point in the first place.