The Executive Committee of the Libertarian Party of Orange County has voted unanimously to oppose Measure A & Measure B, which will be on the General District Election ballot, for voters in the City of Stanton, on November 5, 2019.
Stanton's Special Election & "Fiscal Emergency"
In order to put these measures on the ballot, the Stanton City Council called for a special election by declaring an "emergency" due to its estimated budget shortfall of $100,000 starting in fiscal year 2020-2021. That deficit is estimated to grow to $1,000,000 by the 2023-2024 fiscal year. The special election will cost the city $133,500. According to the City Council, over three-quarters of the General Fund budget is spent on public safety and, without additional taxes, budget shortfalls will negatively affect public services and programs.
Over the past four years, Stanton's spending on public safety has increased by more than 34%, from $12.5 million in fiscal 2014 to the budgeted $16.8 million in fiscal 2018. More than two-thirds of current public safety spending is on "law enforcement," which is contracted out to the Orange County Sheriff's Department (OCSD). In recent years, the OCSD has become known for its cost overruns due to generous salary and benefit increases, where most of the costs are passed on to contracting cities. In addition, Orange County cities are struggling to maintain budgets, while trying to afford unsustainable public safety pensions. Rather than making the difficult decisions needed to deal with these escalating costs, the Stanton City Council, like most city councils, has simply asked voters to approve more taxes to shore up the city's finances.
In 2014, Stanton voters approved Measure GG, which increased the city's sales tax by an additional 1%. At that time, voters were told that the tax increase was needed to fix a "structural budget deficit," prevent cuts to public safety, restore neighborhood police patrols, maintain fire protection and paramedic services, and attract businesses to the city. Five years later, the City Council wants to increase taxes again--this time on current and future businesses--in order to fix another projected budget deficit. In the process, they'll make it harder for some to do business and live in the city.
Measure A is a future tax on cannabis and hemp businesses. Although cannabis businesses are currently illegal in Stanton, the City Council wants to have a special tax ready for when these businesses are legalized. The measure will impose a tax of up to 6% on gross receipts on any retail cannabis business, up to $12 per square foot on the space a business uses for cannabis or hemp cultivation, and a 4% tax on all other cannabis or hemp businesses.
Two years ago, when California legalized cannabis cultivation and sales, many politicians expected a windfall of taxes from the cannabis industry. The reality is that tax revenues have fallen short of estimates, onerous taxes and regulations have made the black market in cannabis a booming business, and licensed cannabis businesses struggle to stay in business. Measure A is an attempt to do what other cities in California have already tried to do: tax their way out of their fiscal woes on the backs of local cannabis businesses.
Measure B is an increase to the "hotel" tax from 8% to 12%. Every year, tens of millions of visitors come to Orange County for our beaches, theme parks, and for business. This tax increase will make Stanton hotels less appealing to those visitors by making hotel rooms more expensive. Measure B will make it more difficult for Stanton's hotels to compete and do business in the region.
The measure will also expand the hotel tax to include online travel and short-term rental companies. With the high cost of living in California, many homeowners in Southern California use extra bedrooms or accessory units as short-term rentals in order to help them pay their mortgage or other expenses. Measure B makes no exemption for homeowners using short-term rental services, and it will make their short-term rentals more expensive. The measure will make it more difficult for people to rent out their property and adversely affect many Stanton property owners who are simply trying to afford to live.
The Libertarian Party of Orange County opposes Measure A and Measure B. Orange County voters can expect similar tax increases on their ballots, in the coming years, as more cities struggle to maintain their budgets. Instead of imposing burdensome taxes on individuals and businesses, local governments should deal with escalating costs directly: by reining in excessive salary and benefit increases, and addressing unsustainable public pensions.
David Naranjo is Chair of the Libertarian Party of Orange County. He can be emailed at email@example.com.