In a desk drawer, I keep a small dictionary that I have used since my school years. I know in today's Internet world that a dictionary is odd, but I still use it and today I used it to look for two words - fee and tax.
I did this because our City Council is considering increasing the fee we pay for garbage services and I see it as an increase in our taxes.
According to Webster's New World Dictionary, a fee is "a charge for professional services, licenses, tuition, etc." That same dictionary defines tax as "a compulsory payment, of a percentage of income, property value, etc. for the support of government."
Well, using those definitions, it is clear that we should pay a fee for the garbage services. It is also understandable that the garbage company wants a higher fee if they are going to provide street sweeping and leaf pickup. What is not understandable is that our tax dollars have been used for years to provide those services, and now we have to pay more for it. (Please refer to the definition of "tax.")
It is important before going further that you understand something very critical - our city council CANNOT raise your taxes without letting you vote. They cannot raise your property tax, income tax or sales tax without letting you vote.
What they can do is increase your fees. Better yet, if they pass the service on to an outside provider with a contract, as they will in this case, you really cannot even complain about the fee. (In this case, the annual percentage increase is even going up. Did anyone check the profits of the garbage company before agreeing to that? I'll answer - no.)
Our city's management will tell you that by eliminating the costs of street sweeping and leaf pickup, the savings will be used to pay for better street maintenance, improvements to the wastewater system and other needs that are paid through the general fund - and if this change isn't made, "fees" for wastewater will need to go up.
Are you kidding me? You don't want to increase my fees, so you will just let the garbage company do it. Do I have this right? Let me make sure I fully understand: My bill is going up and my services are not changing?
If I look at the definition of "fee," it doesn't match. This is an increase and it is a tax, albeit an indirect one. The money that was spent will now go to other things that are already supposed to be paid for using tax dollars.
It is time for the city council and city management to be honest - we do not have the money to continue some services that are currently provided, so "fees" are going up because we cannot tax you. (Did you know that approximately $9.7 million of the amount paid for electricity in Lodi goes to support the general fund, to support government? Look at the definition of "tax" and let me know what you think.)
My solution to this proposed new contract with the garbage company is simple - lower our water and wastewater bills by the increase in the garbage company's fee. Then, let's have a discussion about the type of place we want to live, how much that place will cost and how much we are going to pay for it. Then let's vote for the necessary sales tax or property tax to make it work and let the majority rule. If the vote fails, we cut to make the budget work without increasing "fees."
John E. Johnson, CFA, is a business appraiser with his practice in Lodi. He is also the chairman of the Budget and Finance Committee for the City of Lodi. He can be reached at 369-1451 or at email@example.com.