The sales tax increase

WHAT’S UP:

Half-cent sales tax increase.

WHAT:

A special election will be held Dec. 13 to determine if Laguna Beach will temporarily increase the local sales tax by a half cent to supplement the city’s general fund, depleted by mandatory repairs to infrastructure damaged in the June 1 landslide in Bluebird Canyon.

Measure A will be the only item on the ballot. No arguments against the increase will be on the ballot because none was submitted.

City Councilwoman Cheryl Kinsman, her husband, Michael, and Planning Commissioner Norm Grossman prepared the argument in favor of the increase.

It reads, in part: “The City of Laguna Beach is required to replace over $15 million of streets, sewers and storm drains lost in the Bluebird Canyon slide. The City Council has carefully examined the city budget to find areas to cut. By drastically cutting projects and instituting a hiring freeze, $7 million has been found.”

Another $8 million is needed.

The argument continues: “If we do not pass this tax, we will not be able to fill vacant police, fire and lifeguard positions, and we will delay critical projects. “ The recently vacated marine protection officer position would also go unfilled.

The argument is signed by all five members of the City Council.

WHAT’S BEHIND IT:

After considering other means of raising money -- property tax increases, bonds, etc. -- the City Council held a special meeting Sept. 16 to gauge public support for the tax increase and decided to put it to a vote of the people. If Measure A is passed, the tax increase would raise about $10 million, enough for the city to ride out the most recent disaster and set up a fund for future emergencies.

None of the money will be used for rebuilding homes damaged or destroyed in the landslide. In fact, the council has not stipulated a precise use for the money, due to state election rules.

A two-thirds majority vote would have been needed to pass the increase if funds were specifically earmarked. Only a bare majority -- 50 percent plus one -- is needed to pass the increase because the funds are not restricted to a specific purpose.

South Laguna resident Christopher Toy said the increase as proposed is unconstitutional and should require a two-thirds majority, which he would support and work for.

However, City Attorney Philip Kohn said that Measure A is perfectly legal.

The council did state its intention to use the first $6 million or so to fund city programs or projects that would otherwise be reduced, delayed or eliminated altogether because of the funds funneled to the emergency and permanent repairs in Bluebird Canyon.

The term of the proposed tax is six years. If the target amount is reached earlier, the tax can be canceled by the council, but it cannot be extended without another vote of the people.

WHAT NOW:

Village Laguna, the American Association of University Women and the Laguna branch of the League of Women Voters sponsored a forum Friday to present arguments in favor of Measure A, detail the consequences of it not passing, and provide an opportunity for the public to question the proposal and voice support or opposition.

About 25 people attended the forum, held in City Council Chambers. By law, city facilities cannot be used by the council to promote the tax increase, but the chambers were reserved by the consortium, not by city officials.

City Manager Ken Frank, Mayor Pro Tem Steven Dicterow and Councilwoman Jane Egly were the speakers. Village Laguna founder Arnold Hano was the moderator.

City Manager Frank presented a fiscal analysis of Measure A.

“Each year, the city has about $32 million to spend on general services and capital project, which include police, fire, paramedics, lifeguards, animal control, streets, parks, storm drains, stairway, etc.,” Frank said. “How do you take $15 million out of a $32 million budget? It will take one, two or maybe three years to come up with $15 million, without help.”

Laguna Beach Seniors Inc. has already agreed to delay their project for a year.

The council has tapped the Open Space Fund, the Vehicle Fund, higher than expected property taxes and 20 years of cable franchise fees.

A half-cent sales tax increase -- 25 cents per $50 spent -- should generate about $1.7 million a year, which will be used only in Laguna Beach, not for county or state functions, according to Frank’s analysis.

“The temporary sales tax increase would allow the city to continue with most municipal services and capital projects,” he said.

On Tuesday, the council approved the formation of an emergency disaster fund, which the city has every reason to believe will be needed, based on past experience. But it is not cast in stone and could be diverted by future councils.

WHAT’S NEXT:

A committee has been formed to support Measure A. Committee Treasurer Gary Waldron may be reached at (949) 230-7799, and the state is pursuing on behalf of the city a reversal of the Federal Emergency Management Agency’s denial of modest disaster assistance.

-- By Barbara Diamond