March 27, 2009

Commentary:

Chula Vista’s Prop. A means fewer jobs and more local businesses closing

By Ed Herrera

Few families have not had their foundation shaken by the economic recession that has left working family’s jobless and jobless families homeless. Even then, Chula Vista politicians have expedited a mail ballot initiative that will raise the sales tax rate to amongst the highest rate in the county at almost 10% threatening Chula Vista families, jobs, and businesses—Proposition A. While Chula Vistans are losing their homes and losing their jobs, businesses are closing down, left and right, East and West in Chula Vista. Chula Vista businesses, big and small, offer jobs and stimulate our local economy. Businesses bring in revenue to the City’s General Fund that helps pay for the public services we need and enjoy such as our libraries, Police, Fire, Parks, and recreation centers. A sales tax increase makes products and services more costly and discourages consumption (people from shopping and spending money).

This last holiday season, only one retailer saw an increase in sales— Wal-Mart. The mega retail chain competes on the basis of low prices. Shoppers chose Wal-Mart over competitors such as Target and K-mart to save the extra 10 cents or dollar. There will always be those who are well off and will continue to shop regardless of the cost, but for most of us, the cost of a product is important. Once more, internet sales have increased with individuals turning to options such as E-bay, to save money (including money in sales tax). A sales tax increase increases cost and cost affects consumption.

Why shop Chula Vista when it costs less in San Diego? With the need to reverse the trend and bring people back; we must be able to compete. We have the right pieces, with shopping centers such as Otay Ranch, Chula Vista Center, and the Eastlake Design Center that should serve as revenue hubs to attract consumers in their respective regions, but with a higher sales tax, a higher cost, we become less competitive, giving Chula Vista a poor reputation- “It costs more in Chula Vista.”

Economists agree, the Sales Tax is regressive, particularly for the many families under low and fixed incomes. With many Chula Vista families struggling and hanging by a thread, living on an diminishing pay check to paycheck, an increase in the cost of living is hurtful and causes many families to cut expenses. Cutting expenses translates to budgeting— we shop less (and spend less money).

If our local economy and local businesses depend on our shopping (and spending money) and we cut out our expenditures from those businesses, businesses lose money, cut jobs, and/or close down. If the cost of doing business becomes too high, businesses must concentrate on eliminating expenditures. Paper clips and scratch paper only go so far, and business owners must look at cutting labor costs—jobs. A sales tax increase raises costs for businesses at the time when it is most crucial that the cost of doing business is decreased. Therefore, Chula Vista jobs are in dire jeopardy. A Sales Tax increase discourages people from shopping because it increases the cost of living and the price of products. We spend less, shop less at our local businesses, and it hurts our economy—less business, less jobs, less revenue, less services.

Our economic forecast is chilling and the economy will continue to decline for a few more years before it gets better. Fortunately, recessions are only temporary, but a sales tax increase is not. Economists agree the closer and closer we get to 10% Sales Tax the more people begin to take notice of their spending, and the less they buy. While Democrats and Republicans, rarely agree, both agree—the more money back in the hands of the taxpayers the better off our economy. With President Obama and Congress advocating an economic stimulus and tax cuts, even Washington understands the importance of taxpayer dollars in taxpayer pockets in these times. But Chula Vista City Hall just doesn’t seem to understand the long term repercussions of raising taxes during a recession, on our businesses, jobs, and services.

Economic ramifications aside, Proposition A remains a risky, flawed, unaccountable, and irresponsible ballot measure.

City Hall says that the Sales Tax Increase is “temporary” for 10 years. Fortunately, Californians know that the sun never sets on a “temporary sales tax increase.” To this day, Californians continue to pay Governor Pete Wilson’s “temporary” tax. Proposition A proponents have argued that everyone should “share the pain,” yet it seems that the average Chula Vista resident is being asked for a 10 year to lifetime commitment of tax dollars while City employees/unions are being asked for 4, after which they will receive pay raises.

Chula Vistans are also being asked for millions of dollars more than needed—approximately 5-7 million dollars more. Yet, Chula Vistans are being asked to trust City Hall, but time and time again, one need only pick up the morning paper and have that trust shattered. City Hall is now asking Chula Vistans for more money after frivolously wasting taxpayer money countless times, money they say they will be responsible with, although they will not be there to held accountable for. City Hall politicians say they need the money to pay for services but when asked at a meeting whether he could guarantee that our taxpayer money would not go toward pay raises, City Manager Jim Sandoval stated “No.” In fact there are conditions, no earmarks—taxpayer dollars goes directly into the General Fund and can be spent anyway City Hall pleases.

Proposition A proponents argue that they have cut to the bone, yet waste continues to exist as they continue to receive their luxurious salaries, executive pensions, and car allowances. In fact, Chula Vista politicians have been on a spending spree. While the economy peaked, most cities efficiently built reserves and paid down existing debt. Chula Vista City Hall overdrew, outspent its income, and raided its reserves every year since 2002. Chula Vista now looks towards its elected officials for leadership and City Hall’s answer: raise taxes. There is an adage: “Those who do not learn from history are destined to repeat it.” It seems “living within our means,” is not a simple task for City Hall. Should Proposition A pass, Chula Vista Assistant City Manager recommends that the City take out a yet another loan and borrow the first 5 million dollars. While City politicians ask for a public bailout for a standing deficit in leadership, who is bailing out the single parent mother, or the teacher who has received his pink slip, the small business owner only one market point downturn away from going out of business, or the many Chula Vista homeowners that have lost their homes? Now City Hall is spending $270,000 in taxpayer dollars to tax and take more money away from Chula Vistans with no true accountability or guarantees.

Proposition A proponents argue that there are safeguards against misspending with the inclusion of an “independent citizen oversight committee” —One that is approved by the very same Mayor and Council Members that put the tax increase on the ballot and one with no authority, not tasked with assuring Proposition A money will be used for what it is intended but rather “advising” the Mayor and City Council. Proposition A proponents’ response is “If we are not satisfied by the council’s actions on how the money is spent we can vote for someone else…” But how many politicians who do not represent the citizen, continue to amazingly, become re-elected time and time again by an unknown populous?

Proposition A proponents are beginning to realize that their ballot measure is deeply flawed and does not pass the public litmus test. A surge of public outcry has forced City Hall politicians to host community meetings, meetings that come too little too late for many and have become nothing more than “an effort to promote the initiative and create a false sense of accountability.” While City Hall politicians are and Proposition A proponents deny the reality of Chula Vista’s economic, family, business, and job crisis, and will vote yes, working families, small business owners, community/resident groups, and taxpayer associations including Northwest Civic Association, Southwest Chula Vista Civic Association, Chula Vista Taxpayers Association, and San Diego County Taxpayers Association will vote NO on A, protecting Chula Vista’s future and demanding true leadership, innovation, and accountability.

Learn more at www.ProtectChulaVista.com

Ed Herrera is City Commissioner & Co Chair, Chula Vista Small Business Owner, Southwest Chula Vista Civic Association Vice President , Chula Vista Taxpayers Association Boardmember, and serves on the Chula Vista Chamber of Commerce Economic Development and Public Policy Committees.

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