CaliforniaCityNews.org

How Did so Many City Revenue Measures Pass in this Economy? (Part 3)

The following is the third installment of a post election analysis by John Fairbank, pollster for the League of California Cities and pricipal at the firm of Fairbank, Maslin, Maullin & Associates.

This week I posted Parts One and Two of our analysis as to why the majority of the city revenue measures in California passed this November, even in the face of an increasingly negative economic climate.  As I mentioned previously, we at Fairbank, Maslin, Maullin & Associates (

FMM&A) provided public opinion research for more than 70 local finance measures in various capacities (with a win rate of 95%) and have identified several explanations for their success.

• Planning for high voter turnout by turning out the “right” voters
• Addressing economic concerns head-on
• Targeting early voters

In Part One I discussed how important we found it to reach out to the “right” voters in November’s high voter turnout election and in Part Two I emphasized how important it was that cities addressed economic concerns head-on.  In my final posting in this series, I’m going to discuss our third explanation – targeting early voters.

 

Targeting Early Voters

We discovered in this election year that more voters were choosing to cast their votes early – and earlier than voters traditionally do so because they had made up their minds on the presidential election and wanted avoid long lines on Election Day.  The high profile items on the California ballot – the presidential election and Propositions 4 and 8 – were all very polarizing.  This meant that many voters knew how they were going to vote on these issues well before November 4th.  With somewhere between 40 and 45 percent of voters casting their ballots by mail – not to mention those voting early at their local registrar of voters – voters didn’t have to wait until Election Day to cast their ballots.  The obvious impact of this situation was that outreach and education communications would need an early and more robust communications program to reach a record proportion of the electorate casting a ballot by mail. 

Through our survey research, we were able to identify the voters most likely to vote by mail and segment them by demographic group.  This segmentation permitted us to determine if these voters found any messages or city services more or less compelling than the general universe of likely voters.  It was not sufficient to send out communications earlier and to more voters than normal simply because people were voting early in greater numbers; but given limited resources, it was also important to tailor communications specifically to these early voters.

The success (or failure) of every city finance measure was in part determined by unique circumstances, but looking across all of our client cities and taking into account the general election dynamics, we believe that these three factors played important roles in cities passing their revenue measures this November.  It is also encouraging to see that California cities, schools, special districts and other local jurisdictions can overcome general economic concerns to pass finance measures if the measures are structured to alleviate voters concerns.  As federal and state funds inevitably dry-up over the next year or so, passing local finance measures will become even more critical for cities and these results suggest that you shouldn’t shy away from pursuing strategies to increase revenues through the ballot box, but that cities will need to take into account the dynamics unique to each election cycle.

Please feel free to contact me in Santa Monica (310-828-1183 or john@fmma.com) or Dave Metz in Oakland (510-451-9521 or dave@fmma.com) if you would like to discuss our findings in any more detail.

How Safe is Your City?

CQ Press has released its "City Crime Rankings" report examining metropolitan crime rates across the U.S.  Mission Viejo checked in as the 2nd sfaest city in the country, and was the sole California city in the top 10 -- though Irvine, Chino Hills and Lake Forest were 11th, 12th and 13th, respectively.   

The nation's safest city?  Ramapo, New York.  Here's a map if, like us, you'd never heard of it.

Other notable California cities were Sunnyvale (27), Simi Valley (31), Orange (37), Newport Beach (45) and Tracy (46).

On the other end of the spectrum, Oakland ranked 381 (out of 385, New Orleans is the most 'dangerous' in the nation), and Richmond and San Bernardino also figured in the bottom 50 cities examined.

The rankings of the cities and metropolitan areas are calculated using six major crime categories and include all cities of at least 75,000 residents that reported crime data to the FBI in 2007. The full list is here.

Cities Left out in Schwarzenegger Tax Plan

As if paying new taxes on services and entertainment wasn't bad enough, the Cal Chamber is out saying cities won't even see the benefits of these new levies.  The Chamber cities pesky wording in the state constitution that says the legislature can’t impose taxes for local purposes. It also states local governments can’t impose new taxes without local voter approval.

Prop 218 anyone?

Now, it seems to us that if the state is taking in more revenues, it could follow cities would be spared additional cuts/raids down the line.  The OC Register digs a little deeper, noting a city like Anaheim would generate millions in revenues from its theme parks and profesisonal sports teams, but see none of these in direct return. 

Credit Market Freeze May Claim Local Governments as Victims

California Treasurer Bill Lockyer and 19 municipal treasurers sent a letter Friday asking for an emergency Federal Reserve program to restore liquidity to the malfunctioning market and force rates back down.  It's long been a concern that skyrocketing rates could buckle cities.  The LA Times uses the MTA as an example of the pain being felt by public agencies:

"The Los Angeles Metropolitan Transportation Authority, for example, says the rate it is paying on $132 million in variable-rate notes has soared to as much as 12%, from as little as 1%. That's a difference of as much as $1.2 million in interest a month. The MTA says it may also have to pay $50 million to retire interest-rate swaps it purchased to hedge against interest-rate changes on the original notes."

Yikes.  Read more from the Times here, additional coverage in Reuters and the NY Bond Buyer

LAO Recommends Large-Scale Permanent Hit to Redevelopment

From the League of Calfiornia Cities website:

Less than a week after Gov. Arnold Schwarzenegger released a proposed budget to close the $11.2 billion shortfall for FY 2008-09, the Legislative Analyst's Office (LAO) released an analysis of the Governor's latest proposal. LAO concurs with the Administration's assessment and projects that the budget shortfall over the next 20 months is $27.8 billion. While the Governor did not propose an additional shift of redevelopment funds, the analysis recommends a permanent annual shift of $400 million in redevelopment funds.

LAO's analysis supports the Governor's framework to close the gap with a combination of cuts and tax increases and recommends that the Legislature take quick and aggressive action to solve the problem. LAO further suggests alternative revenue increases and program reductions to ensure minimizing harm to the state's taxpayers and core programs, and raises concerns about future shortfalls.

The analysis also provides some alternatives to the Governor's proposed budget solutions including several that would impact local governments.  For the full anaylsis, click here.

"How Did so Many City Revenue Measures Pass in this Economy?" Part 2

The following is the second installment of a post election analysis by John Fairbank, pollster for the League of California Cities and pricipal at the firm of Fairbank, Maslin, Maullin & Associates.

 

This past Tuesday I posted the first part of our analysis as to why the majority of the city revenue measures in California passed this November, even in the face of an increasingly negative economic climate.  As I mentioned previously, we at Fairbank, Maslin, Maullin & Associates (

FMM

&A) provided public opinion research for more than 70 local finance measures in various capacities and have identified several explanations for their success.

 

• Planning for high voter turnout by turning out the “right” voters
• Addressing economic concerns head-on
• Targeting early voters

In Part 1 I discussed how important we found it to reach out to the “right” voters in November’s high voter turnout election.  In this posting, I’m going to discuss our second explanation – addressing economic concerns head-on.

 

Addressing Economic Concerns Head-on

 

As the economy started to deteriorate over the spring and summer and the financial sector melted down in October, many in our industry – not to mention many of our city clients – became nervous that voters’ financial concerns would overwhelm any potential gains generated by increased voter turnout.  When voters see their retirement accounts losing 50% of their value, foreclosure signs popping up in their neighborhoods, and their neighbors (or themselves) getting pink slips, the idea of voters electing to increase taxes on themselves seems like a pretty tall order.

 

In the course of conducting our research for our city clients, we came across an interesting finding – messages that most often served as effective secondary appeals in past elections were resonating more strongly with voters in this electoral environment. These concepts had been used as complimentary themes in past campaigns, but this year the following messages were just as important as communicating the urgency of funding vital city services:

 

• Our research demonstrated that it was highly effective to emphasize that a local finance measure generated a stable, local funding source for their communities at a time when federal and state governments face significant deficits that are resulting in budget cuts to local services (local control).  Additionally, because local tax dollars fund critical city services and programs essential to everyday life there is a greater willingness to accept marginal tax increases.  Therefore, a local tax increase is much more palatable to voters as this money will stay in their community for local services rather than going to the state or federal governments who appear to be incapable of properly managing taxpayer dollars.

 

• Because of growing skepticism among voters that their tax dollars would be used as promised, we found that reassuring voters that their local dollars would be spent wisely and efficiently due to the strong oversight and accountability provisions (audits, citizens’ oversight and public expenditure reports) was a very effective and necessary message. 

 

Additionally, we believe that voters perceived these finance measures as ways to help mute the negative impacts of the economic downturn.  One of the most significant factors in this crisis has been falling home values.  Obviously, many items factor into determining home prices: location, the size of the home or lot, the quality of the local schools, etc.  Of course, the quality of city services also plays an important role.  Are the neighborhoods safe?  Are there programs to keep kids off the streets, out of trouble and away from gangs?  Are the roads well maintained?  Are the local parks clean and safe for families?  We believe that this was not lost upon voters and they determined that these relatively affordable finance measures were needed to help maintain or improve their local communities and therefore help buoy their home values.  While this message was not directly communicated to many voters in our client cities, we have seen this theme conveyed by voters in our focus group research, and feel that it played an important role in generating support at the ballot box.

 

In my next posting on this subject for CaliforniaCityNew.org, I’ll discuss the remaining key factor – targeting early voters.  Please feel free to contact me in Santa Monica (310-828-1183 or john@fmma.com) or Dave Metz in Oakland (510-451-9521 or dave@fmma.com) if you would like to discuss our findings in any more detail.

Solutions to California’s Fiscal Crisis

The following is a guest piece by The California Foundation for Fiscal Responsibility a new organization committed to educating the public and key decision makers about California public employee retirement benefit issues and developing fiscally responsible solutions .

California is crumbling fiscally because the mortgage mess has reduced tax revenues. The Legislative Analyst estimates the budget gap is over $1 billion a month and, in spite of bond sales, we will run out of cash in a few months if something isn’t done NOW.  We’ve been here before, most notably in 1979 after Proposition 13 slashed property taxes. Because property taxes funded schools, thousands of teachers received pink slips. Some districts used a lottery to determine who would go and who would stay. Schools recovered with a property tax shift and state bailout that continues today. 

 

But this time it’s different. Prior to 1979 government workers weren’t unionized. Extracting union concessions during a fiscal crisis is nearly impossible. Heavily unionized companies in the private sector—airlines, automakers, and steel industries—know that unions won’t budge even if it means bankruptcy. Vallejo’s unions are fighting a judge’s decision that the city is bankrupt to avoid renegotiating their contracts.  The Governor’s proposal to increase sales tax and DMV fees while reducing services is politically possible, but will be very unpopular among citizens who are struggling.  Citizens will be bitter that union labor hourly wages and benefits that are 37% higher than other states remain unchanged. Furloughing workers one day a month isn’t a cut.  They will still earn their health care, pension, and other benefits. Wages will be lower, but so will production.  And employees want to work and produce.

 

The California Foundation for Fiscal Responsibility (CFFR) is proposing sensible solutions to much of this crisis that won’t require an increase in taxes, an increase in fees, cuts in wages, layoffs, furloughs, or a reduction in services. Our solutions will work because they encourage work. Most of the cost of government goes toward salaries and benefits. If WORK isn’t exchanged in abundance by our most capable individuals during this crisis, California as we know it can’t survive.  But California isn’t alone in this crisis.  Cities, counties, and local governments throughout the state are facing declining revenues as well. 

 

Following are 10 recommendations to put this state and local governments back on the right fiscal track.

Vallejo's Neighbors Staring Down Bankruptcy

With tax revenues dropping and employee costs and foreclosures rising, Vallejo might have some company in bankruptcy.  Fairfield and Rio Vista as well as other municipalities hard-hit by the foreclosure crisis.

According to the SF Chron: "Rio Vista is talking to bankruptcy attorneys while a 750-home development sits virtually abandoned. Fairfield just sliced 9 percent from its budget and is poised to slash 7 percent more. Earlier this year, Vallejo filed for Chapter 9 protection when faced with a $16 million deficit."

Another interesting dynamic is the rising gang problems in Fairfield, which has the city fully committed to public safety, even while the budget becomes more and more untenable.  Read in the Chron and the Merc.

Bankruptcy talks begin in San Diego?

Or have they?  City Council President Scott Peters invited public comment for a Tuesday closed-door hearing on whether it should be considered here -- prompting Councilman Jim Madaffer to question "How did that even get on the docket?"

It appears outgoing City Attorney Michael Aguirre has requested the city hire the lawyers who led the city of Vallejo into bankruptcy earlier this year to lead a discussion on whether San Diego should follow suit.

This push came shortly after the city attorney lost his bid for re-election.  Read more in Union Trib.

City Tries To Collect Overdue One-Cent Utility Bill From Blind Woman

Okay folks...we know times are tough - but are they this tough?

A 74-year-old blind woman has been told a lien will be put on her South Attleboro, MA home if she doesn't come up with a penny she owes on an outstanding utility bill. Read all about it in the Sun Chronicle