May 1, 2009

Commentary:

Taxpayers Advocate Urges YES vote for Prop A in Chula Vista

By Scott Barnett

Three years ago this summer, Taxpayers Advocate published a critical analysis of Chula Vista’s city finances. (See www.Taxpayers Advocate.org). We pointed out (along other concerns) that the city was inappropriately relying on developer fees to cover the cost of its operating expenses and debt, setting up a situation where, if developer fees and other revenues declined, the city would be unable to maintain service levels for existing residents.

We hate to say “we told you so,” but that’s exactly what has happened in Chula Vista. When the real estate bubble burst, developer fees and Chula Vista’s municipal budget tanked right along with it. The situation was made even worse by the impacts of a nationwide recession that further reduced sales and property tax revenues.

A shake-up in city leadership occurred after publication of our analysis, (including the departure of the City Manager who had been misleading elected officials on the state of the city’s finances.) Resulting budget reforms pared the bloated, over-paid bureaucracy that got the city into trouble in the first place, but these cuts weren’t enough to reverse the flows of red ink that engulfed the city’s finances.

Now city government finds itself in a no-win situation where cuts in core services like fire protection and law enforcement will have to be made if new revenues aren’t found.

As a general rule, Taxpayers Advocate opposes tax increases to bail out failing municipal governments, but the case for Prop A in Chula Vista isn’t quite so clear cut.

The new mayor and council have cut everything that can be cut in terms of layoffs, received salary concessions by city workers, and streamlined city operations.

And Prop A creates an independent citizen’s committee to ensure new revenues are used to maintain basic services, not to feather the nests of city bureaucrats.

In addition, 100% of the revenue generated by Prop A goes directly to city government. It can’t be taken away by state government to fill the bottomless pit of Sacramento’s on-going budget crisis.

The fact that we correctly predicted the financial problems now plaguing Chula Vista is little consolation to the residents and business owners who face the loss of public safety, parks, libraries and other quality of life basics. It’s because of these innocent victims that we reluctantly urge a YES vote on Prop A to preserve basic services in Chula Vista.

Scott Barnett is President/CEO of Taxpayers Advocate. He can be reached at: scott@taxpayersadvocate.org

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