Thursday, July 10, 2008

Transient Occupancy Tax Increase is Overdue


(chart courtesy of City of Costa Mesa)

COUNCIL TO DEBATE TOT INCREASE
At the very end of their meeting on Tuesday, July 15th, the Costa Mesa City Council will consider the question of whether or not to place two tax measures on the November ballot - an increase in the Business License fee and/or an increase in the Transient Occupancy Tax (TOT), also known as the "bed tax". These issues were discussed extensively at the council study session last Tuesday. While both items certainly need serious consideration, I'm going to focus this entry on the Transient Occupancy Tax.

LOWEST "TOT" IN COUNTY
At 6%, Costa Mesa has the lowest TOT in Orange County. Even if you include the additional 2% earmarked for the Costa Mesa Business Improvement Area (BIA), Costa Me
sa's TOT is still well below the county average of 10.5%, and has not been adjusted for almost three decades. At it's present level it generates around $6 million in revenue - 5.34% of the total. (See chart above) As an aside, the current Business License fees generate just under $1 million.

IN ONE HAND, OUT THE OTHER

The 2% BIA assessment is collected by the ten member hotels in the city, who remit it to the city. Then the proceed
s are funneled to the Costa Mesa Conference and Business Bureau, which uses the money for business development on behalf of the city. A portion of those funds are directed back to the participating hotels for their business development programs.

2% EQUALS $2 MILLION

A modest
2% increase in the TOT could mean an additional $2 million in revenue to the city, which would still retain it's competitive edge by remaining well below the average of other Orange County cities.

SOLVE
NCY OR NOT?
If the voters i
n Costa Mesa are given a chance to consider this issue on the November ballot, their response at the polls could mean the difference between solvency and extreme financial hardship for the city. According to City Manager Allan Roeder, "... from a staff perspective, we believe such an increase will be needed to support existing service levels as opposed to adding more personnel or paving more streets or building more parks. I fully understand that isn't very sexy in terms of voter appeal. But as we have pointed out in recent years, the annual cost of operations for existing services already places us in the situation of having to use Fund Balance (revenues in excess of projections & budget savings) to balance the ensuing year's budget. Short term that isn't of great concern but it is becoming a reoccuring "theme" both in good economic times (as we've had for the past 3 to 4 years) and under present day circumstances."

INCREASE NEEDED TO STAY AFLOAT

What that means, folks, is that Roeder and his excellent staff feel we need
an increase in the TOT in order to keep levels of service where they are right now. In light of the obvious current economic downturn, and without a way to augment what will almost certainly be a decline in sales and property tax revenues, the city leadership will face some difficult decisions in the years ahead.

PAINLES
S PICKPOCKETING
I strongly support an increase in the Transient Occupancy Tax, and have done so for many years. This is a virtually painless tax for Costa Mesa residents. We simply reach a little deeper into the pockets of our visitors and drag out a couple more dollars for each night they spend in one of our many lovely hotel rooms. On a $100 per night room that would be $2.00.

50% + 1 MAJORITY OF VOTES REQUIRE
D
For an increase in the Transient Occupancy Tax to be implemented it must first be placed on the ballot by a majority vote of the City Council. Unless the tax increase is specifically designated for a special purpose - the purchase of parkland, for example - passage requires only a vote of 50% +1. If it is earmarked for a special purpose, a two-thirds approval by the voters is necessary.

ROEDER'S ALMOST OUT OF RABBITS
We have not had an increase in the Transient Occupancy Tax in almost three decades. Even though Roeder and his staff have done a masterful job of performing magic to keep the city financially solvent over the past several years, it looks like they are just about out of rabbits to pull from the hat. The current economic climate makes it essential to approve a TOT increase now.

INCREAS
E WOULD DOVETAIL WITH DECLINES
According to city officials, if the TOT is approved in November, additional revenue would likely begin to flow into the city coffers at approximately the same time the impact of declining sales and property taxes - which represent more than 70% of the city's revenue (see chart above) - is beginning to be felt.

SERVICES TO BE CUT?

Without new sources of revenue the city may be faced with reduction of services - fewer police and firefighters, more potholes left unfilled, fewer programs for our kids.

WHICH CANDIDATES OPPOSE IT, AND WHY?

I'm led to believe that some members of the City Council may oppose an increase in the TOT, which really doesn't make sense to me. If that is the case, and any of those opposing it are running for re-election, this will certainly make for some interesting questions at the candidate forums this summer and fall.

IN SUMMARY
1 - Costa Mesa's Transient Occupancy Tax is the lowest in the county
2 - An increase would be invisible and painless to Costa Mesa residents
3 - The almost-certain decline in both sales and property tax revenue will adversely affect our budget
4 - The city needs the additional income to maintain current service levels

NOW IS THE TIME
Unless you are OK with the probable decline in services provided by the city, now is the time for an increase in the Transient Occupancy Tax. Now is the time to contact your council members to let them know how you feel. Here's an email address that will get your views to the council: op2council@ci.costa-mesa.ca.us. Write today...

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Wednesday, July 09, 2008

CASPA BOLTS FOR BOLIVIA

photo courtesy of Daily Pilot

RETURNING HOME
One interesting piece of news to hit my desk recently is the departure this week of Humberto Caspa - college professor, activist, former Daily Pilot columnist and author of the controversial new book, "Terror in the Barrio: The Rise of the New Right in Local Government" - for his home country of Bolivia. According to Caspa, he's returning to his homeland for good, to make a new life for his family.

LEAVES CONTROVERSY IN HIS WAKE
Caspa, who had been the President of the Costa Mesa council of the League of United Latin American Citizens (LULAC), leaves in his wake no small amount of controversy. During the past few years he has been a frequent voice for the Latino community in Costa Mesa as he worked hard to chronicle the wrongs he perceived being suffered by that demographic group - a third of the population of Costa Mesa. His commentaries in the Daily Pilot evoked much emotion on both sides of the issues he addressed. His departure from that assignment was also clouded by controversy.

HIS BOOK ASSAILED

His book, which only recently reached wide release, received a very critical review from a source that surprised me - the OC Voice. Mainstays of that publication, John Earl and Scott Sink, took Caspa to task earlier this week for what they felt was a "flawed" job of presenting his views. Paraphrasing them, they felt he didn't support his opinions with enough facts. You can read that review for yourself HERE.

FREQUENT SPEAKER

Caspa was a frequent speaker before the Costa Mesa City Council, particularly following the arrest of Benito Acosta during a City Council meeting more than two years ago.
His efforts to address and improve the plight of Latinos in our community were not without their admirers.

GRACIAS, AND ADIOS, HUMBERTO
We thank Humberto Caspa for his efforts and bid him a fond adieu. We hope he finds peace and fulfillment in his home country.

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Tuesday, July 08, 2008

Fireworks Fanatics Among Us


KNUCKLEHEAD CONFESSES
In his column today, "Don't Forget To Douse", Daily Pilot writer and self-professed knucklehead Steve Smith goes right to the heart of the fireworks issue in Costa M
esa.


IT TAKES COJONES
I have to give Smith credit for acknowledging his knuckleheadness, particularly since he has been trying to tell us how to live our lives and raise our children for many years. It took guts to tell the Daily Pilot readers of his
boneheaded move that resulted in melting his trash can and threatening his neighborhood. It takes real chutzpah to think that, by admitting his stupidity, he can justify continuing the sales and discharge of fireworks in Costa Mesa.

HOLIER THAN THOU
Early in his column Smith pontificates that, because there were so few calls for service to the Fire Department, it demonstrates tha
t fireworks are safe. He says, "If you have opposed the sale of fireworks in Costa Mesa, you should be big enough today to say, 'I was wrong.'" He tells us that we shouldn't punish the "99.99% of law-abiding citizens" for the transgressions of a few who misuse fireworks, including illegal fireworks.

FIREWORKS SHOULD BE OUTLAWED!
Well, I am one who feels we should stop selling fireworks in Costa Mesa and pass an ordinance that specifically forbids the discharge of ANY fireworks in our city - an ordinance that has teeth in it. Several years ago a garage that abuts our property was burned to the ground over one Independence Day holiday by a thoughtless youth with so-called "safe and sane" fireworks. Only the alert response by another neighbor, who hosed down our garage until the fire department arrived, kept that fire from destroying our home.

SAME OLD STORIES

I know we'll hear fro
m those, including many of my friends and neighbors, who feel that shooting off fireworks is some kind of God-given right. We'll hear from those who think that's it's just plain anti-American to forbid fireworks sale and discharge in our city. We'll hear from the parents who, in four days of fireworks sales, earn more than their entire year's budget for their specific youth sports programs. Others will complain that we don't need a law to forbid fireworks - that we have too many laws abridging our freedoms already. I've heard it all before and really do understand those viewpoints.

THINGS CHANGE
It was not too long ago that sparklers, a staple of Independence Day celebrations in my youth, were removed from the list of "safe and sane" items that cou
ld be used in our city. The 2000 degree heat generated by a sparkler, and the spitting of hot metal fragments that form the "sparkle", were deemed to be too dangerous to children, so were banned.

SMALL TOWN SOLUTION
My wife and I spent the holiday in a small town on the Central Coast where fireworks are specifically forbidden because of the extreme danger of forest fires. The smallest spark could destroy the town. In exchange for that prohibition this little burg puts on an all-day party at a local seaside park - with music, dancing, games, food and drink - and which culminates in a wonderful professional fireworks show fired out safely over the ocean. This day-long party, sponsored by the local Lions Club, draws residents and tourists alike by the thousands and raises money for many youth programs - and keeps the community safe. That seems like a solution worth pursuing in Costa Mesa.

OUR OWN KNUCKLEHEAD

Smith doesn't have the Costa Mesa knucklehead market cornered. Upon returning home last weekend we heard that our Costa Mesa neighborhood, which held it's own block party again this year, had a damper put on the otherwise outstanding, fun-filled festivities by the knuckleheaded performance of one member of the neighborhood. Anecdotal reports tell us that this person endangered lives and property by misusing what appeared to be illegal fireworks - so much so that many neighbors retreated to their homes for safety. I'd run, too, if I saw Roman Candles being used like shoulder-fired missles! The police were called, but arrived an hour later - much too late to observe the activities. We're led to believe that our neighborhood was lucky to not have had serious injury to persons or property. No child was burned - no house destroyed.

"WHEN", NOT "IF"
In my view, it's just a matter of time until we in Costa Mesa do have a person injured or killed and/or homes destroyed by the misuse of fireworks. I don't think you can effectively police the enforcement of illegal fireworks while still allowing the sale and use of so-called safe and sane products. It's not a matter of "if", it's "when" such a tragedy will happen. Steve Smith has demonstrated that even safe and sane fireworks can be dangerous in the hands of a knucklehead.


HERE'S A DEAL FOR YOU
But, I'll make you all a deal. I'll stop writing about this right now if ALL OF YOU who support the sale and discharge of fireworks will agree to attend the funeral of the child that is killed b
y fireworks in our city. I'll get off my bandwagon if you agree to visit the child in the hospital who is severely burned with fireworks. I'll stop if you can tell me that ANY youth sports program is worth the sight of a child's eye or third degree burns over his body. That's when I'll stop writing about this.

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