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Steve Hansen: Measure L facts and myths

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Posted: Wednesday, September 26, 2018 6:39 pm

People often vote based on what they don't know rather than what they do know.

Here are some myths circulating about the city's proposed half-cent sales tax increase:

Myth: Lodi should cut expensive city pension benefits in order to save money.

Fact: The city today has no control over existing pension benefits. Benefits are protected by PERL, or what is known as the California "Public Employees' Retirement Law."

Despite attempts by cities and counties to lobby Sacramento for change, the legislature has done little or nothing to prevent local municipalities from eventual bankruptcy due to mandated pension costs. Court rulings have also tied their hands to some degree. Despite Gov. Brown's past concerns, legislative leaders do not seem to want their positions of power challenged by conflict with large public employee unions.

In addition, Lodi city employees have salaries and benefits protected by collective bargaining rights -- also mandated by the state. City leaders simply cannot take away salary, benefits and pensions at will.

Myth: The Lodi City Council chose the most expensive PERS retirement plan back in the year 2000.

Fact: Actually on a scale of 1-10, the city council chose a plan that would rank somewhere around 5 or 6. The public safety plan was around 7 or 8. According to the city manager's office, the council 18 years ago was told by PERS representatives that these plans "wouldn't cost that much." But unfortunately, this alleged fabrication is water under the bridge and plans cannot be changed once in place.

Myth: The city council could put new employees on a 401K plan.

Fact: Again, according to the city manager's office, state law only allows two options: either in or out of PERS for all employees. To leave PERS at this point would require the city to write a check for $450 to $500 million for past and present obligations -- money which obviously the city does not have. Even if this were possible, it ignores how Lodi would be less competitive for public safety personnel than it already is.

Myth: City employees are doing nothing to help the situation.

Fact: Most understand the tenuous financial situation. They have tried to help by contributing 7 percent (police and fire are now at 9 percent) of their salaries to help offset costs. They have also foregone well-deserved raises over time. Yet these sacrifices have not been enough to offset all of the tremendous costs imposed by state pension plans.

Another problem for the city is the number of retirees presently serviced. Lodi has about 500 retirees but only 350 full-time employees. Based on what is commonly known as the "California Rule" (a series of court rulings since 1947), benefits and pensions for these former workers cannot be reduced.

Myth: Other cities in our area have not raised sales taxes.

Fact: Only three municipalities have not raised sales taxes, but could soon follow. They are Escalon, Ripon and Tracy.

Myth: The city is not being honest with us. Look at Elk Grove. They are doing just fine with public services.

Fact: It is true that Elk Grove's sales tax is presently the same as Lodi's at 7.75 percent. But here's what most people don't know. Elk Grove has what are known as CFDs or "Community Facilities Districts." These are additional charges to developed property (which most likely are passed on to renters in time) that cost as much as $840 per single family residential unit! Multi-units are taxed at a much higher rate. Is this what Lodi residents would prefer over a half-cent sales tax increase?

Myth: Lodi could cut salaries in half.

Fact: Much of this myth has already been covered previously. But here are some additional reasons why this is a bad idea. Right now, the City of Lodi has funding for 6 to 10 additional police officer positions that cannot be filled. Why? Finding qualified applicants is much more difficult today.

But here's the main reason: Other communities have responsibly raised tax revenues and are able to afford better salaries and benefits Ñ thus pulling away potential law enforcement candidates that might have come to Lodi.

Myth: Lodi has plenty of money from the 7.75 percent sales tax paid now.

Fact: The city only gets to keep one cent out of every dollar paid in sales tax. In addition, as mentioned in a previous column, Lodi only keeps 16.6 percent of local property taxes.

Myth: A half-cent sales tax is too much of a burden on the people of Lodi.

Fact: About 25 percent of city sales taxes are paid by visitors and others from outside of the Lodi area.

Myth: We should kill non-essential services to save fire and police.

Fact: It's not enough. The sales tax increase is expected to raise the $5 million necessary to stay afloat. Killing parks and recreation would save $2.5 million. Eliminating the library would save $1.3 million. The only thing left to cut would be street services, fire and police. Also, salary costs for part-time city workers will increase 30 percent when the state minimum wage mandate of $15 per hour takes place in 2021.

On Nov. 6, the people of Lodi have a choice. We can help stave off disaster Ñ even if it is only for a few years until hopefully, politics change in Sacramento Ñ or we can watch our lovable city slowly deteriorate like a scene from an apocalyptic movie.

The choice is ours.

Steve Hansen is a Lodi writer.

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