I hope people take the time to understand the facts before voting on Measure H, the Burlingame ballot measure that would fix our flooding problems and make critical safety improvements to a few key public buildings.
Here's the situation in a nutshell: Our flood control system is 75 years old and was designed to last 50 years. By taking very good care of it, we have kept it functioning longer than it was designed to, but it has now reached the point where it needs a major overhaul. We can do that now, before we have more flooding and damage, or we can wait and pay more. If we wait, the construction cost will rise at last $1 million per year, we will still pay about $2 million a year to keep the system functioning, and we will be subject to hefty fines (up to $10,000 a day) every time our raw sewage flows into the bay. (The state, by the way, has promised to increase fines to cities that don't stop polluting the bay.) Those are funds that we could be spending on things to enhance our community.
At the same time, we have identified a few major problems with public buildings that just can't wait. Did you know, for example, that the Recreation Center has an unreinforced masonry wall that is not safe during an earthquake? And this building is one of our designated emergency shelters! Other problems include inadequate access for people with disabilities, substandard ventilation and heating, and a lack of fire sprinklers.
There is no dispute about the need for the improvements. The dialogue centers on three questions regarding the method of financing them.
Isn't There a Fairer Way to Do It?
First, all this talk about not looking into alternative forms of financing is nonsense. Our city carefully researched all viable ways of financing these improvements and concluded that the current proposed measure is the most equitable. It is based on the same formula as Proposition 13, charging an average of $30 per $100,000 of assessed value. The average annual tax is $127 per property. If you look at the assessed value of your property on your property tax bill (for nearly everyone this is a MUCH lower number than the market value of your home), the tax equates to a 3 percent increase in what you are currently paying.
If you are a new homeowner, yes, it is going to cost you more than your neighbor. That's the way Proposition 13 works. We all felt we were being unjustly taxed when we first bought our homes. Over time, the tax becomes more reasonable. The reason Proposition 13 remains popular is that it allows older residents to stay in their homes. In other states, property taxes escalate over time or are unpredictable, forcing older folks from their homes.
If you have recently purchased a house, please don't believe the contention that the average new homeowner will pay $1,200 per year.? Your house would need to be assessed at $4 million to be taxed this amount annually.
A bonus for new homeowners is that they can instantly take advantage of the many improvements that those already living in Burlingame have paid for over a long period of time. Burlingame has a reputation of providing a high level of service to residents and of taking care of problems before they before catastrophic. That's one reason our property values remain high compared to other cities. If you have just purchased a home, our city's reputation was probably a factor in your decision to live here. Isn't it worth a 3 percent increase in your property tax bill to protect your huge investment?
Will the Tax Be Higher?
Second, it is unlikely that the tax will be higher than projected. The average increase in assessed valuation in Burlingame for the last 10 years is 7.5 percent. If this rate were to continue for the life of the bonds, the tax for a median property would go down from the estimated $127 per year to $74 per year. The assumptions for the bond funding were extremely conservative. For example, our assumed bond interest rate peaks at 6.25 percent, versus the current rate of 4.30 percent. The bond interest rates would be set during the next seven years, so we would not be subject to long-term market influences. We also are able to control the timing of when we go to the marketplace, and we can call a bond to take advantage of lower interest rates, just as property owners do when they refinance their homes. It is likely that the bond will cost less than projected, not more.
Burlingame is not a newbie? at bond funding. We have issued dozens of bonds over the years for various projects, and we have never had to pay more than anticipated. Our city has a AA+ financial rating, which makes it easier for us to sell bonds at the best rate. Our rating is due in part to the highly regarded experts on our financial staff, who have won numerous state and federal financial reporting awards in recent years. A Citizens' Oversight Committee will ensure that funds are spent appropriately and will conduct annual audits.
Will Renters Be Unduly Burdened?
Third, renters are not going to face huge rent increases due to Measure H. The vast majority of renters live in buildings that the owners have owned for many years and, thus, have low assessed values. The city has researched the effect that the tax would have on renters. We found that for one of the highest assessed apartment buildings in Burlingame, the monthly rent would increase by only $1.60 per unit if the entire tax were passed on tenants. Furthermore, landlords have a big disincentive for raising rents: They are competing in a rental market that extends beyond Burlingame, and they want to keep their tenants!
What this whole furor centers on is that the opponents of Measure H don't like Prop 13. Yet the Prop 13/Measure H taxing method is by far the most commonly used one in California for community-wide infrastructure improvements because it is the fairest to the largest number of people. We've explored other taxing methods and they fall short. To give one example, a flat tax would levy an equal tax on every parcel, meaning that the Marriott would pay the same amount as the little old grandmother down the street who has lived in her house for 50 years. Under a flat tax, the average annual tax would be $339 rather than the $127 average under the bond.
No tax will please everyone, but Measure H is the best we have come up with. No one has suggested an alternative that would appeal to more people.
And if we don't pass Measure H, what will happen? Well, we know one thing for sure: It will still keep raining, and we will still keep pouring money down the drain.
There are many bond measures on the November ballot, but Measure H is the only one that will spend every dollar on improvements in Burlingame. Please vote YES on Measure H.
Terry Nagel
- Written by Terry Nagel
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