The “Broken Promise tax” is retooled

On Tuesday, Stockton’s City Council admitted, tacitly at least, that a decade-long tax to fight crime with more cops has failed. Then they voted to renew the tax anyway.

The Council voted 6-1, Council member Michele Padilla dissenting, to extend Measure A, a ¾-cent sales tax, for another decade because there’s a new strategy to beef up the police force and, whether it works or not, Measure A revenue funds other city government operations without which Stockton is screwed. 

Or so claimed city staff. 

“Allowing Measure A to sunset at this time would likely result in disastrous consequences,” said the legislation text given the Council. 

The disastrous consequence being either a second municipal bankruptcy, God forbid, or city services and amenities cut so close to the bone that the marrow drips out, the staff report said.

The carnage allegedly would include 155 cops, the Office of Violence Prevention, 30% of the Fire Department, three fire stations, park maintenance, half the cleanups of homeless encampments and dumped garbage, security guards at playing fields, numerous code enforcers, arts grants, library staff and hours, Oak Park Ice Rink, and much, much more, staff said.

On the other hand, re-upping the tax means Stockton taxpayers will continue to pay the highest tax rate in the state of California with no guarantee that the new police-hiring strategy will work, future services may be cut anyway, and the money may be spent on things other than cops. 

Yet the Council may have chosen the lesser of two evils. 

Some trace the city’s dilemma to Stockton’s 2012 bankruptcy. In federal court, a bankruptcy judge ruled—historically—that Stockton could impair (cut) its staggeringly expensive public employees’ pensions. That legal precedent was a godsend, some felt. 

Yet City leaders chose not to. Perhaps it was too much to expect them to cut their own pensions, especially given the hazard-pay level hurricane of outrage and opposition the bankruptcy generated. But now, pensions are eating the city alive. 

For instance, in FY 2014-15 pension costs for “miscellaneous” (non-public safety) employees spiked 12%. Public safety rates shot up 20%. Multiply such hammer blows over 10 years. And the cost is expected to keep rising until 2031. On top of annual payments, the city had to set aside $71 million to meet this obligation.  

Measure A’s ¾-cent sales tax, which followed on the heels of the bankruptcy, was designed to help the city pay its debts and recover. But that was secondary to voters. Measure A’s main feature was funding the hire of 120 police, beefing the police force up from 365 to 485. 

In the fine print it was a general tax, meaning legally the city could spend it any old way it wanted, as opposed to a restricted tax dedicated strictly to police. But it was accompanied by a non-binding “advisory” Measure B which asked voters if they wanted the tax revenues to go 65% to new police and 35% to bankruptcy debt and general operations. 

Voters decisively said yes. They didn’t really give a damn about leaders’ bankruptcy mess. They wanted a safer city.

After all, the 485 number was a compromise to begin with. A top criminologist had advised the city to staff 600 cops when it reached 300,000 residents. 

City staff reports say Measure A revenue averaged $36 million a year. Yet while the city sometimes came close, it never reached the promised 485. In recent years staff level fell further and further until it sank into minus territory: as of Tuesday, the police force numbered 351 sworn officers.

That’s right: after something like $360 million in tax revenue, approximately $234 million of which was supposed to go to cops, Stockton Police have not one net cop to show for it, but are 14 short of the 365 baseline, 134 short of 485. A scandalous failure.

“We have fewer police officers after $300 million in tax,” said tax activist and Measure A opponent Dean Andal. “Why would we give any credibility to their financial analysis now? Or how they will spend the money? They’re not credible.”

They’re not. Both Measure A and earlier Measure W, a utility tax, delivered far fewer police than promised. But perhaps not because, as Andal believes, leaders misled voters; I personally believe they’re just not good at projecting tax revenue and the number of police it can fund. 

And, after the George Floyd/Defund the Police/pandemic ferment in recent years, there’s a documented reduction of aspiring cops that make the city’s goal harder to reach. 

Especially since surrounding cities pay more.

To contend with this challenge, the City Manager’s Office devised a Measure A revision: forget the 120-cop goal; halve the goal to 60 cops; use the millions budgeted for the 60 cut police positions to sweeten the deal for the remaining police. 

It’s a kiss-off to Measure B’s implicit promise. But a realistic attempt to make Stockton competitive in the police market and to give voters at least part of what they pay for.

City staff appears to have analyzed this idea closely, consulting with accountants and experts, and concluded that the money would bring Stockton Police compensation to “mid-market” level for comparable cities. So, if money is the problem, the problem is solved, and Stockton would boast a police force of 425, officials say.

The staff report crows that this Measure A revision, “represents a historic breakthrough in the City’s ongoing challenges to recruit and retain law enforcement officers.”

The Police chief and rank-and-file union, the Stockton Police Officers Association, support the revision.

As well they might. The new order would shower police with around $13 million more a year: bigger raises, shift differential pay, front-loaded vacations for new recruits, special assignment add pay, educational assistance, health care contributions and a longevity bonus for cops who stay the course. 

And, “It is General Fund budget neutral,” added City Manager Harry Black. “We’re not increasing taxes. We’re not increasing the budget. We’re just strategically reprogramming existing funding.”

Will it work? Not right away, said Black, who points to a “silver tsunami” of Stockton police nearing retirement. Not to mention the competition and crazy churn inherent in the current market.

“Based on market conditions right now it will likely take the department five nine years to get to 425,” Black said.

Meaning possibly another damn decade of tax without cops. 

Black & Co. probably deserve a lot of credit for conceiving and diligently analyzing this new approach. I’m loath to give it to them. I reject some of their fundamental premises: the perpetual raises, or Cost of Living Adjustments, given public employees, and their pensions, which are treated as inviolate; and the millions squandered on cost overruns on Stockton’s new City Hall at Waterfront Towers.

“The City used mostly Measure A funds for its new City Hall,” Ned Leiba, a CPA and Measure A watchdog, said in a newsletter. “It seems the City is not proud of that use. There is no disclosure or discussion in the City’s documents to show the use of Measure A funds for that purpose.” 

Leiba’s dissent goes further. He alleges the city’s Long-Range Financial Plan (L-RFP) is fraudulent, a scare tactic to gin up the case for an unnecessary tax.

“The City could have arranged an audit or other assurance report on the LRFP. If such an engagement was performed, the auditor would say the LRFP is utterly, totally, materially unreliable. The City’s LRFP is propaganda. A marketing tool,” Leiba said.

City officials who refused to conduct dispositive audits have no one but themselves to blame for such cynicism. 

Andal: “All the money diverted from Measure A to the new City Hall, that was neither city operational expenses, anticipated in the Long-Range Fiscal Plan, or part of the one-third designated for bankruptcy-related issues. And that’s 100 million.”

Costs for Waterfront Towers, the new City Hall, by the way, have quadrupled into a boondoggle. 

The Measure A revision includes stricter accounting standards and more transparency. Whether they are adequate is unclear. Citizen oversight will be important.

“I’m cautiously optimistic,” said Dan Offield, founder of Citizens United Against Decay, which represents some 800 business and a thousand properties throughout the city.“However, our organization is taking the position that we’re going to be watching what’s going on. If they’re going to be transparent, then there’s no issue.” 

Black isn’t looking in the rearview mirror. He’s just trying to salvage Measure A from the market forces that undermine Stockton’s drive to create a safer city. Whether he’s effectively curtailed the forces inside City Hall that dilute that effort remains to be seen.

Bottom line: “It is my view that based on the current climate, the current marketplace, I don’t foresee us being able to recruit and retain 485 officers,” Black said. “It is not realistic.”

There’s a saying. “You can either fix the problem or fix the blame.” It’s better to fix the problem, of course. We’re going to have to keep telling ourselves that in coming years.

Fitzgerald’s column runs on Wednesdays. On Twitter and Instagram as Stocktonopolis. Email: mfitzgeraldstockton@gmail.com