Path to Irvine's future tied to June 5 election
The looming shortfall in city revenue, the result of declining retail sales, property taxes and tourism taxes, will hit the city budget hard. The city is looking at a potential deficit for the first time in its history.
Irvine is an exceptionally run city, and has the accolades to prove it. The city has been named the most-fiscally-fit municipality in the nation, yet there’s no guarantee that future city council majorities will be as prudent with taxpayers’ money, especially in the case of an economic downturn affecting tax revenue.
And that’s just what the city now faces.
After significant growth since the recession, sales tax revenue has been decreasing in recent years. The 2017-2018 budget anticipated a $1.3 million drop in sales tax revenue for the city, the result of “increased reliance on online purchases as opposed to brick and mortar retailers and the loss of traditional storefronts due to closures.”
Sales tax is the city’s largest general fund revenue source. The city collected $65.6 million in sales tax revenue for 2015-2016, which was expected to dip to $64.3 million in 2017-2018.
The city council majority approved a fiscally-prudent budget for the 2017-2018 fiscal year.
With the new fiscal year budget to be debated and adopted in June, estimates have been circulated that the city’s shortfall could reach $6 million in 2018-2019. That deficit could very well increase dramatically, depending on the results of the June 5 election.
Voting Yes on Measure B is fiscally prudent.
During last year’s budget debate, Councilmember Melissa Fox made a prescient point: “We have a very volatile revenue base,” Fox said. “This year is a good year. What happens in a bad year?”
Then-Mayor Pro Tem Lynn Schott warned against seeking tax increases or other new revenue sources. “The temptation that we have to be on guard for will be to look for more and more revenue streams that involve higher taxes and fees.”
Which is ironic, because Schott and Councilmember Jeffrey Lalloway have been the minority on the city council wanting to spend $38 million of Irvine taxpayer funds at a formerly proposed contaminated cemetery site, while asking state taxpayers to contribute the rest of the $77.4 million the California Department of Veterans Affairs estimates building the first phase of a cemetery there would cost.
Lalloway and Schott continue to oppose building the veterans cemetery at the widely approved and much superior Strawberry Fields site at a city savings of more than $30 million in taxpayer money.
A “yes” vote on Measure B will ensure the city saves the millions of city funds that Schott and Lalloway remain eager to spend.
“Yes” on Measure C protects Irvine residents from tax increases.
Future city councilmembers might agree with Schott and Lalloway’s willingness to spend needlessly, and seek new or increased taxes to fund increased and unneeded spending.
Currently, a state law loophole allows a simple majority of the Irvine City Council to agree to place a tax increase or other tax measure on the ballot.
A “yes” vote on Measure C closes a loophole for charter cities such as Irvine that allows a simple majority of the city council to propose new taxes. With the passage of the measure, the council will need four out of five votes, or a two-thirds majority, to put new taxes on the ballot.
“Yes” on Measure D to safeguard city funds.
A “yes” vote on Measure D will add an amendment to the Irvine City Charter requiring that new development projects provide a financial benefit to taxpayers or be subject to possible additional forms of public approval.
If passed, Measure D will protect Irvine’s high quality of life by safeguarding revenue that pays for public safety, supports public schools and helps fund infrastructure improvements.
If Measure B fails, it will likely kill chances for a veterans cemetery in the city. However, city councilmembers could once again propose spending $30 million to $40 million to remediate the old cemetery site.
Measures C and D also address the city’s ability to stay on track fiscally.
Measure C prevents new taxes and Measure D assures economic development continues in a way that supports city services, including our police department, which keeps Irvine ranked as the safest city of its size in America.