Friday, June 18, 2010

Raising the Sales Tax While People are Short of Cash

Might 'experts' be wrong again? Are we heading towards dreaded 'double-dip'?
If there is a go-to-guy for making sense of the country's wretched economy, it has been former Clinton Labor Secretary Robert Reich. A year ago, he maintained the Obama stimulus plan was not large enough when others said the opposite and he is now one of a small cadre of contrarians saying the economy is headed towards an extended downturn.

"Why are we having such a hard time getting free of the Great Recession?" Reich wrote earlier this month. "Because consumers, who constitute 70 percent of the economy, don’t have the dough." In turn, he also says, employers are cautious to create new jobs.

In Alameda County, the number of unemployed still hovers above the national average, at 11 percent, but another double-digit number may loom large in San Leandro this fall.

The city is likely to propose a quarter-percent sales tax increase on the November ballot. If approved by voters, the sales tax in San Leandro would rise to 10 percent--one of the highest in the state. The recent fiscal budget passed June 7 did not include the possibility of new tax dollars, but the presentation given to the council highlighted partially funded public safety items that could face elimination for the last half of the year if the measure does not pass.

Mayor Tony Santos and opponent Councilwoman Joyce Starosciak have indicated support for the sales tax measure, while Stephen Cassidy has has questioned whether the regressive tax would force shoppers to locales other than San Leandro.

Aside from that, much of the budget estimate provided by the finance department include somewhat rosy assumptions regarding even conservative views of the state and national economy, which, according, to Reich, may not be a minimal and slow recovery, but yet another downturn--a so-called "double-dip." News reports this week say economists and banker believe a double-dip is "very unlikely," but both occupations have shown their foresight to be dubious over the past few years and may amount to nothing more than wishful-thinking.

If Reich is correct about the economy in the next year, how will San Leandro justify increasing its sales tax at a time when its predominately middle-class is struggling to scrounge up money for much more than necessities? Increases in sales tax typically bite those with less money to begin with, so why enact revenue enhancements during a time of a stagnant economic atmosphere when the partial increase in receipts will not appear on the city's ledgers until next spring, at the earliest? It's just another reason why the economy will be the city's top election issue and capable of upending  its leaders and direction.


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  2. Once again we have idiots running the insane asylum. For 25 years the City of San Leandro has had one @$$hole after another raise taxes with promises that the Budget will be balanced. First it was that CROOK Dave Karp, who HID $250,000 in Sanwa Bank and conveniently forgot to claim it on his taxes. A TAX EVADER, A ROTTEN CROOKED HYPOCRITE BASTARD, who died under CRIMINAL INVESTIGATION. Yet the fools in this town named an overpass and a room in the Library after the bastard. This scumbag imposed the most taxes ever on this City on the badget has always been in the red.

  3. Oh and where are all the big mouths who imposed the taxes and regulations in the last 10 years???? Most have moved out of town or out of state. Hell, most City employees don't live here anyway so why should they give a damn about this City, all these parasites want is a check.

  4. Anyone who'd vote for a raise in taxes during a recession is a moron. And that's what you're doing if you vote for Tony or Joyce. I seriously think someone is paying those two to run San Leandro into the ground.

    Frank Lynn

  5. Since Manuel and Frank are two huge racists you have to think they would love this tax since all the Oakland folks who come to San Leandro in their "gangster clothing" to shop will be paying this increase as they litter San Leandro with their presense.

  6. Two Huge Racists? Hey big mouth, if you can't see the forest for the trees you're blind. Oakland has a problem with things because of the PEOPLE who live there. San Leandro has problems because of the PEOPLE who live here. Plain and simple. So take your "racist" labeling/calling and shove it down your piehole. The people in both cities are their own worst enemies.

    Frank, you are damn right people are paying to have San Leandro run into the ground. It's been this way for 25 years. It all started with that bastard Dave Karp. He instituted the Property Transfer Tax and did any of those crooked bastard Realtors oppose it? Some did, but most didn't because they were making HUGE commissions off of churning properties. When three heroic citizens gave us had the chance to repeal it these same crooked bastard Realtors opposed it, and do you know what??? Two of the biggest supporters of keeping of the tax, quietly sold their homes and moved their sorry asses to Danville and Colorado.

  7. I remember when the sales tax in Alameda County used to be about 5%. Taxes have been continually raised, not just on a dollar basis but on a percentage basis. That has had a more significant, longer-lasting negative effect upon consumer and retailer finances. I know many people who would drive 50 miles out of their way just to save a dollar; that's the reason why we now have mega-stores like Costco, Target, and Walmart; independent 'Mom n' Pop' retailers have for the most part disappeared because we as voters and consumers did not support them. Coffee, sandwich and deli shops have also fallen, and we now have a choice between Safeway or Lucky's, Starbucks or Pete's. And what else have we gotten for our increased spending on taxes? I haven't noticed any significant increase in fire, police, or health emergency services; in fact, I find the contrary. Ditto for city and/or county services. Here's one thing I've noticed: increasing public employee salaries and benefit packages over the years while private employees' salaries/benefits have declined. Look at this NY Times article:


    "Public sector jobs used to offer greater job security but lower pay. Not anymore. In 2008, according to the Cato Institute, the average federal civilian salary with benefits was $119,982, compared with $59,909 for the average private sector worker; the disparity has grown enormously over the last decade."

    When one part of the population is making half the money and paying taxes out of that lowered salary to support the doubled salaries of public employees as well as the rest of the population who are living on the public dime, that is what I would call an unsustainable situation. It is an unsustainable situation that has finally come to a head and the only reasonable, logically fair solution is to reduce the salary/benefits of public employees to be more in balance with the rest of the population. This solution is inevitable as making draconian cuts to social services while raising taxes on remaining retailers/consumers will only exacerbate the problems of this recessionary/depressionary economy and we all know that you can't squeeze blood out of a turnip!

    Steve Worley

  8. Thank you Steve Worley. I'm so glad someone else with a brain has joined this discussion.