Money

Tomorrow night, the council will receive (and likely accept) the 2nd quarter sales tax Collection report. I’ve been meaning/trying to put together a quarter by quarter sales tax spreadsheet for the last few years, but other things keep cropping up and I haven’t even really started.

The key issue in the six page staff report are that the 2nd quarter of 2007 dropped at 0.7% over the same time last year, and really it was increases in construction and food that appear to have offset decreases in every other category.

Unfortunately, the old saw of “South Shore/Towne Centre is under construction” doesn’t necessarily speak to the concern in dropping sales tax, as it was under construction in both 2006 and 2007, and in fact, some of the new stores have come on-line.

That said, the construction is well underway and major construction will be complete by this time next year. With Bed Bath and Beyond (does anyone else’s mind jump to the Simpson’s Halloween special that featured a trip to Bloodbath and Beyond when they hear that name?) opening, the theater coming on line in March, Borders, and other new, long-planned projects gearing up, perhaps we really are about to turn a corner.

With the huge public service union issues (Firefighters are up next!) It’s going to be interesting to see how this all plays out. Page 6 of the report shows that Police and Fire use nearly 60% of all general funds in the city.

With Action Alameda endorsing the use of state and regional laws to overcome local planning issues, perhaps they’ll start looking at supporting regional sales tax sharing laws in Sacramento. There was movement about four years ago, but it went no where. Now may be the time to look again. Check out the graph on Page 5 that compares sales tax collection per capita in Alameda County.

Alameda beat Piedmont (Yay us!) and the unincorporated areas of the county (Wohoo, we’re on a roll). And they we get our butts handed to us by the rest of the cities in the county (It’s like we’re the Cal Bears of city sales tax collection!) Check out Emeryville. There’s some serious redistribution that needs to at least be talked about.

1 comment for “Money

  1. Michael Krueger
    December 3, 2007 at 11:39 am

    Ever since I saw the Simpsons episode with the “Bloodbath & Beyond Gun Shop,” I always think of it when I see “Bed Bath and Beyond”:

    http://deadon.files.wordpress.com/2007/04/bb_n_b_slice.jpg

    Hilarious!

    But seriously, I wasn’t surprised to see Emeryville popping off the sales tax chart. Emeryville is an example of the “fiscalization of land use” run amok. That’s a wonky term for one of the unintended consequences of Proposition 13 in California: Because cities new receive more revenues from sales taxes than they do from property taxes, and because land uses like housing can require more city services than retail uses, cash-strapped city governments are sorely tempted to approve as much large-scale retail as possible and as few housing and other non-sales-tax-generating land uses as possible. Take this to the extreme and you get Emeryville.

    The Emeryville phenomenon is explored in detail in the report “Behind the Boomtown: Growth and Urban Redevelopment in Emeryville,” published by the East Bay Alliance for a Sustainable Economy in 2003. The report essentially concludes that Emeryville has managed to take sales-tax-generating retail opportunities from neighboring cities like Alameda and Oakland and concentrate them all in one place, fattening the city’s coffers. At the same time, it shifted the financial burden of creating new housing to neighboring cities:

    At the same time Emeryville shifted housing demand to other cities, the City reaped a windfall of revenues from new businesses that draw customers and employees from throughout the region. In particular, the City pursued and captured a disproportionate share of net new sales tax, a source of revenue relied on by most local governments for discretionary spending. Overall, this drew revenues needed to provide public services, especially housing, away from other cities that house Emeryville’s workforce.

    Based on these findings, we conclude that the Emeryville’s redevelopment did not, overall, mitigate the economic opportunity and affordable housing crises facing the East Bay region. While no city bears sole responsibility for solving regional problems, Emeryville had a unique opportunity with its redevelopment powers and land advantages to improve conditions for all families in the East Bay. That the City did not choose to take advantage of this opportunity will have serious implications for the region’s future.

    What Emeryville did was good for its city budget but bad for the region and bad for its own residents. Instead of the “small-scale retail along main streets” envisioned in its General Plan, the city focused on “development of chain and big box stores” and “did not incorporate comprehensive transit planning into its development planning.” The result is an automobile traffic nightmare that has made the town less livable for its residents:

    A real commitment on the part of the City to attract more family housing, parks and open space and locally serving retail, and to focus on development projects that contributed to creating a walkable, cohesive community would have dramatically improved the livability and family-friendliness of Emeryville. These residents have also borne much of the brunt of increased traffic due to the city’s rapid growth.

    Emeryville’s easy freeway access has been its blessing and its curse. It has allowed a sales tax boom, but it has also dumped a huge amount of regional traffic onto its local streets. Although I believe our city leaders can resist the lure of sales tax dollars from mega-retail, the fact that Alameda Point has no direct freeway access effectively rules out a replay of the Emeryville boom in Alameda…no matter how tempting it might be from the city’s budget perspective.

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