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Sacramento Will Spend Nearly $50 Million In New Sales Tax Revenue This Year. Here’s A Look At The Budget Debate.

Bob Moffitt / CapRadio

Sacramento Mayor Darrell Steinberg discusses budget priorities in his office May 31, 2019.

Bob Moffitt / CapRadio

The Sacramento City Council has a lot more money to spend in its current budget compared to last year. But instead of celebrating, officials and community groups are disagreeing: over how, where, and how quickly the money should be spent.

Sacramento voters approved an increase in its Measure U sales tax last fall, and this has led to an influx of nearly $50 million in projected new revenue. But there’s very little consensus.

Mayor Darrell Steinberg and some council members strongly hinted they would like to spend most of the projected new revenue on affordable housing, youth programs and communities that have not benefited from public funding in the past.

The mayor also wants to take out bonds against the dollars — a plan that has at least two council members worried about the city being able to pay off its debts in future years.

And some are concerned that the dollars will once again end up going to the usual groups — law enforcement or the fire department — or toward paying-off the city’s growing pension debt.

On Tuesday, Council will debate the mayor’s plan, and Councilman Steve Hansen’s proposal to issue bonds using the Measure U revenue as collateral, which would raise up to $340 million over the next three years.

Last week, Steinberg announced $16 million in Measure U budget spending that would go toward special projects in various Council districts on everything from child care programs and ice rinks to a new sports complex.

But he did not allocate funding for projects in the districts of Council members Angelique Ashby and Jeff Harris, who have been critical of his plan and the idea of taking out bonds against Measure U.

The mayor continues to push for the bonds. “Is Measure U going to be the magic answer for every community need and priority? Obviously not,” Steinberg said. “But it is a catalyst, especially if we use this money wisely by matching it with other dollars.”

Unsurprisingly, there are several other critics of the city’s Measure U proposals — who also happen to want a piece of the revenue.

Firefighter groups already get a piece of Measure U, but the Firefighter's Local 522 says there is a need for more services, including re-opening a station in South Sacramento.

"Our big fight is moving the money into a certain fund, the economic equity fund. That is what we were opposed to,” union vice president Chris Andrew said.

“The firefighters never expected all the money to go to public safety,” he added.

The city has said some Measure U money could pay for tens of millions in unfunded pension liabilities. That doesn’t sit well with Barry Broome, president and CEO of the Greater Sacramento Economic Council.

"The goal is to build up the neighborhoods, not build up City Hall,” he said. “Why isn't that money going into neighborhood development organizations to build capacity on the ground so these neighborhoods can learn to fend for themselves?"

Broome says the GSEC wants to make sure its own investment in the Measure U campaign last November pays off.

“Our CEO’s put in $500,000 in this campaign, and we worked with the city manager’s staff in designing how to bring these neighborhoods up and back,” he said.

Berry Accius, the CEO of nonprofit mentoring program Voice of the Youth, says supporting emerging businesses by allowing temporary “pop-up” sites at vacant lots or buildings would help people living in areas like Meadowview get a start.

"There's just buildings standing, sitting there waiting for someone to occupy them. So why are they not being occupied?" Accius asked.

He says there is already too much "public safety" and bureaucratic spending in the budget proposal.

City Manager Howard Chan disagrees. "Code enforcement is not bureaucratic,” said Chan, who added that a lot of feedback from residents is concerns over illegal dumping, parking, traffic and abandoned animals. “Those things that aren't very sexy are very important to the community.”

Steinberg’s list of priorities is under fire from council members Ashby and Harris, who say Natomas will receive no funding for special projects.

Ashby wants $14 million toward the construction of an aquatic center, with an Olympic-sized pool that would be built on the Inderkum High School campus. And she says the project will die if it’s not part of the budget.

“We will lose the millions of dollars of investment on design drawings, architects and feasibility studies over the last five years to get to this point,” she said. “We are shovel ready and ready to go. This would pull the rug out from the entire project.”

Harris says he also made requests for projects in his district, including money to complete the South Natomas Community Center and safety measures for Northgate Boulevard.     

“If you’re going to talk about ‘early wins’ and equity and funding projects, there are very few places that need more help than Northgate, Gardenland and River Gardens, some of the oldest neighborhoods in the city,” Harris said.

He called the mayor’s omission of special-project funding for his district a “glaring error” and repeated his concern regarding issuing bonds on the back of tax revenue.

“A downturn in the economy is more or less imminent; we’ve been 10 years of expansion in the economy, which is unheard of in history,” Harris said.

Both Ashby and Harris note they were the only two council members who voiced concern about Steinberg’s original plan to use Measure U revenue as collateral for $440 million in bonds.

Mayoral spokeswoman Mary Lynne Vellinga says the values of the projects, $14 million for the pool and $4.5 million for the community center, were the reason they weren’t included, not because the council members spoke out against Steinberg’s plan.

“We had a budget-funding request that was seven times larger than anyone else’s and just really couldn’t be accommodated,” Vellinga said of Ashby’s request. She added there are other funding options for Ashby and Harris’ projects.

A proposal by Hansen to spend $3 million on Land Park renovations was also not selected, but Harris and Ashby say leaving 20 percent of the city’s population out of the mayor’s Measure U project list is “not inclusive.”

Some argue that Measure U money should be spent in neighborhoods that will be most impacted by the sales tax increase. Dr. Flojaune Cofer is chairwoman of the Measure U Community Advisory Committee. She says the tax is regressive and affects a higher percentage of lower income people.

She says that the committee’s “directive for Measure U” is to ensure that “those contributing proportionately more get more out” of the tax.

Councilman Jay Schenirer says that, after the mayor’s proposal for spending on special projects, any further spending of new Measure U dollars must go through the advisory committee.

“I think the other commitment the city made was to a process that would involve community, and we don't want to get out in front of that process,” Schenirer said. “I think we need to follow that process, which will really give us the biggest bang for the communities because it's driven by them and not by us."  

The Measure U committee has met twice. City Council is expected to pass a budget on June 11.

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