The Burlingame Voice

BBB: B'game Bulging Bucks

Let's continue our two week traipse through the financials of B'game, new sales taxes, Caltrain taxes, and the State's gas tax grab with this news from the Daily Journal's report on the City's coffers

Continuing the upward trend established over the past few years, Burlingame’s economic position is expected to keep improving due to a robust tax base, according to the newest annual budget. 

The Burlingame City Council unanimously approved last week a spending plan for the 2017-2018 fiscal year projecting $68.9 million in general fund revenue to grow by roughly $1.3 million from the previous year. 

The budget is bolstered by record gains from the city’s thriving strand of 12 hotels along the Bayshore, proposed to bring in $26.8 million this year, alongside a projected $19.1 million in property tax, according to the report authored by City Manager Lisa Goldman.

Hotel tax is expected to bring in $15 million more annually than it did in 2008, while property tax is slated to increase by $7 million annually from the $12.2 million generated a decade ago. In all, general fund revenue has ticked up by $32 million since hitting a recent low point at $36.7 million in 2010.

I'm all for "remaining vigilant" about a softening economy as the piece states, but right now softening is not really what is in the tea leaves.  Higher sales taxes are spoiling the bottom of the tea cup, but other than that things are looking OK.  To finish, let's just enjoy this bit of missed editing by the DJ

The budget sets aside an initial $3.7 million this year to pay toward pension costs, with the expectation of making more contributions commiserate with the projected cost hikes California cities should soon see, according to the report.

LOL

More New Taxes: Caltrain?

You may have thought it was the first week of Summer, but it is really the first week of New Tax Season.  The two other posts in the last week are also about new taxes (Development and B'game sales tax) so here comes number three, hot on the heels of Caltrain getting $647 million from the Feds for electrification and high-cost rail.  They are hot on the heels of the new gas tax.  Per the Daily Journal

State legislation introduced Wednesday would allow Caltrain to seek voter approval for a new sales tax to help cover capital and operating costs.

Senate Bill 797, introduced by state Sen. Jerry Hill, D-San Mateo, along with several other Bay Area senators and Assembly members, would authorize the Peninsula Corridor Joint Powers Board, which runs Caltrain, to place a one-eighth-cent sales tax on the ballot in San Francisco, San Mateo and Santa Clara counties.

The text of the bill can be found at http://sd13.senate.ca.gov/sites/sd13.senate.ca.gov/files/sb797_caltrain_0.pdf

I wonder if our City Council knew that Jerry Hill would be seeking another tax and whether it could land on this November's ballot.  You can bet the boards of supervisors for San Francisco, San Mateo and Santa Clara counties and transportation authorities in the three counties won't push back. If it does end up on the November ballot, you can bet there will be some tax fatigue even among Californians who haven't seemed to care until the gas tax hit.

Construction Gets More Expensive

I'm not sure how I feel about this move by the Council to impose "developer fees".  It's one thing to collect fees and another to decide how to spend them.  The Daily Journal gives us the basics here.

Builders looking to construct new retail spaces, offices or hotels in Burlingame will be required to pay a new schedule of fees intended to help officials fight the local affordability crisis.

The Burlingame City Council unanimously approved Monday, June 19, establishing linkage fees charged to developers to generate revenue for a new fund designated for subsidizing affordable housing opportunities.

Fees will rise as high as $22 per square foot for office spaces, $12 per square foot for hotels and $7 per square foot for retail projects but there would be discounts for developers willing to pay prevailing wages to construction workers.

Assuming councilmembers confirm their vote at a second meeting, the rates will go into effect Thursday, Aug. 3, and projects currently in the development pipeline would be required to pay, raising officials’ concerns over springing new fees on unprepared builders.

The real problem is not to fund more so-called "affordable housing" since that is just a myth perpetuated by local socialists who never passed Econ 101 and don't really care about middle income people trying to make a home in B'game.  The new tax revenue should go to help infrastructure to support the increased load, the heightened police and fire needs and perhaps relieve the burden on the school system that comes with more kids.  And while we are at it--this should be sufficient to replace the .25% sales tax increase on the November ballot (see the next post down).  Here is the scary part:  the fees "could bump up to as much as $25 million in a more aggressive development environment, according to a city report."  I really don't want the City to have $25 mil (per year??) to distort the housing or office/commercial market in town.  But the old saying that if you want less of something tax it, means this might not be all bad.  Like I said at the top, not sure about this one.  What say you Voice bloggers?

Quarter Cent Sales Tax Increase?

The City Council is considering a .25% increase in the sales tax which might raise $2 million per year for the City's General Fund.  That is an additional $125 dollars of tax on a $50K car from Burlingame's Auto Row, so not a big deal, but an increase nonetheless.  It would land on the November ballot and need a simple majority to pass.  From the FY15-16 Financial Report (page 32) we see Sales and Use taxes of $12,827,673, so two mil would be an uplift of %15+.  On a total "revenue" (that term always cracks me up when used to describe government intake) of $72,524,589 it would be about +2.8%.

One Crime or Two?

Yesterday's Daily Post has an article about a guy getting mugged in the Hampton Inn parking lot.  In the Crime report section he was there with an "escort" on Wednesday night at 7:52 pm, but the full article has a more descriptive headline.  Is this one crime or two?

Clean Power or Reliable Power?

Congrats to readers who have developed their Critical Thinking skills and can recognize my provocative, but ultimately false, title of this post.  The falsehood is the appearance of a dichotomy between clean power and reliable power.  We can probably have both, but do we have them right now?  The big outage in downtown San Mateo is almost five hours old as I type.  I am just opening the glossy brochure that arrived in the mail from Peninsula Clean Energy courtesy of the SMC Office of Sustainability.  Based on the massive traffic jam on El Camino, the extra car emissions and likelihood of a lot of spoiled food and health emergencies, one has to wonder if the County and various City Councils are focused on the right thing? I'm glad it wasn't pouring rain without working sump pumps.  Personally, I vote for reliable power first.  One of the few worthwhile things ex-councilwoman Terry Nagel advocated for was more reliable electricity in town.  I'm not sure we ever got it, but the aspiration was good.

In the fun facts from Germany department, we get this

The mindless (German) rush to renewables has already done tremendous damage to the German standard of living, with 300,000 households each year having their electricity turned off for non-payment.  With the cost of consumer-born subsidies at 25 euros bln per annum and surcharges of 6.88 euro cents per kWh, or twice the market price of a kilowatt, Germans pay three times more than Americans today.

Worse is to come.  According to the German consumer agency NAEB, by 2020, they will be paying 45 euro cents per kWh, compared to 10 cents for the U.S. and 20 cents in France.

Lest we digress too far, take a look at your PG&E bill.  "Delivery" is the bulk of the cost and that is where the power failures originate.  You can feel free to stay enrolled in the I-didn't-ask-for-this "Clean Power" program and save 5% on the minor part of the bill, but don't lose sight of the real issue-- reliable first world electricity.  Councilwoman Donna Colson has promised me an article about the benefits of Clean Power--which we will publish.  This post is just contextual background for that future post.

Drive-in Construction Up and Running

One of the longest running sagas in B'game has entered the construction phase.  They are "in the dirt" over at 301 Airport Blvd known locally as the drive in.  You can read a small slice of the long history here and more than five years ago here.  I took a better picture today.  Things are moving right along in the dirt in just one week.

 

Thought From Afar and Near: School budgeting

One of my biggest concerns about how the City Council and the Planning Commission think about adding housing in B'game is what they don't think about.  I sometimes refer to my hometown in Massachusetts as a better model of decision making by a council because of the different approach to school budgeting.  In Massachusetts, schools are a part of city government (i.e. "the School department") and part of the city budget.  Reading my hometown paper over the weekend drove home how big a part it plays.  In a city of 43,700 people (that has declined 5% in the last 17 years), the school budget is 37% of the total budget.

Imagine if our city council members had to use 37% of their available funding on the schools and plan for growth instead of shrinkage.  Imagine if the school budget were more than twice the police and fire budget combined.  Do you think there would be such a push to add housing if the decision makers also had to worry about more school kids and probably another elementary school, another middle school project and then do some creative high school planning?

I won't make it to the meeting tonight on the so-called affordable housing project for City parking lots F and N, but if you go please let us know if this even comes up.  See the post two down for photos.

Rich State Write-Off

I love statistics that tell a story especially when the story is close to home.  The weekend Wall Street Journal editorial piece about Federal tax policy and poorer states subsidizing richer states had a great stat.  The basic idea is that because of the Federal tax deduction that is allowed for state and local taxes one also pays, the states with lower tax rates and/or poorer people are subsidizing the rich states.  Here are the top five counties in the country by average amount of state and local deduction (for 2014):

New York (i.e. Manhattan)        $24,898

Marin County                            $16,956

San Mateo County                       $15,405

Westchester County (NY)            $14,784

Fairfield County (CT)                $14,262

There is apparently some move afoot to eliminate the deduction for state and local taxes paid, but the Journal hopefully writes that it might "spur reform in states that are long overdue for a better tax climate." -- like California.  Don't hold your breath on that.

The Grand Plan. Part 4. More density

Tonight,at a study session, the City Council will look at plans for two downtown surface parking lots that are slated to be transformed into high density housing and a five story parking garage. The public is welcome. Meeting begins at 5:30 in conference room A at Burlingame City Hall. If you re concerned as I am, you will attend.