Letter: Now is still not the time as two tax schemes remain in South Lake Tahoe

Dear Citizens of South Lake Tahoe, A few months ago, I wrote to you my personal opinion as one of your City Council members regarding my great concern about the multitude of unnecessary taxes being proposed in our city. It was titled “Now Is Not the Time.” With gasoline, eggs, and even fast food sky high and with Liberty just raising our electric bills 40 percent, it’s still not the time for any new taxes.

I explained that as a member of the finance committee, I know with certainty that our city is not broke and has a very healthy 25 percent reserve (plus, a healthy “Undesignated Reserves Fund”). I explained that you have already in the past few years generously voted for taxes for roads, safety services, and a new recreation center.

The community has had some success in stopping or delaying taxes and fees, since my last letter to you. Thanks to your showing up at Council meetings and writing emails and calling into meetings, the Charter City real estate transfer tax has been set aside and the TOT tax was voted down 4 to 1. The Basin User fee is not now up for a vote and the imposition of a parking fee at local businesses is not on our agenda.

The following is my second personal opinion letter to you as one - individual - a very concerned council member.

Two tax schemes remain. The possible raise of the minimum wage in the city is set to be discussed at our April 23 evening council meeting at 5:30 p.m. I hope you come to express your opinion. I am, personally, adamantly opposed to having more businesses leave town due to this imposed rise in the costs of doing business. This will hurt local families by causing huge layoffs, reduced hours for employees, and higher local inflation through increased costs to customers. Fortunately, hundreds of local businesses have realized the devastating results of such an act by a council that has not commissioned an economic impact study -- of any of these proposed taxes and fees. However, all the studies nationwide done by reputable economists have come to the same conclusion that I described, and that being: layoffs and more inflation due to higher prices of goods and services. It has not gone unnoticed that the recent raise in the California minimum wage exempted friends of the Governor. Don’t you wonder why they got special exemptions if indeed it is not supposed to damage businesses? Hospitals and others are fighting this increase also as it will hurt their employees and patients. The hike in wages being proposed here in our city will hurt Barton Hospital, their nurses, aides, employees, and patients too. It’s no wonder they are moving to Nevada.

Then there is the Vacancy Tax initiative. It was rejected by the city council, but one lone council member decided to go around the council on his own. Many have come to me with complaints that the proponents are being less than truthful in how they ask people to sign this, in my opinion, flawed petition, without mentioning it as a huge $6,000 per year tax on a certain class of homeowners who already pay taxes for K-12 schools, the college tax, recreation, road repairs, snow removal, sales taxes, property taxes, plus sewer, water, garbage, electricity, and natural gas and other monthly fees. Now, because of the Caldor Fire, property insurance has gone up by thousands if it is even obtainable. This initiative sponsored by fairly new transplants from big cities, who don’t know our community but think they know what’s best for us, is an almost word-for-word copy of the initiatives in Berkeley and San Francisco. There are already lawsuits filed because they are far from falling within the intent of the Commerce Clause of the U.S. Constitution, past U.S. Supreme Court decisions, and state laws such as the Ellis Act prohibiting the taking of other people’s private property by forcing them to rent it out against their will. In my opinion, this initiative is an incredible waste of everyone's time and resources as it will be determined to be in violation of taxation without representation, against the takings clause as well as a host of other established Supreme Court precedents.

Property rights are mentioned 37 times in the U.S. Constitution. Those who authored it even then knew human nature. They worried that the government would grow into a place where they would try to take what others had worked for through increased taxation. It is happening here and now with this greedy tax grab - Vacancy Tax initiative intended to force people to rent their homes out even if they have good reasons not to such as possible loss of fire insurance or protection of treasured family furniture or simply because they have other plans. There are scores of long-time family-owned cabins here that are used to come to ski or for family gatherings for holidays. Many are owned by retirees whose incomes are lower now and that $6,000 per year would be an unbearable financial burden. Some are only 1,000 square feet but would still be taxed at the same $6,000 per year/ $500 per month as the larger homes would be. Is that fair taxation?

Much of the tax would be eaten up in salaries and enforcement costs. One can only imagine having an expensive high-salaried new City department (our own local IRS) with government inspectors looking into windows and spying on neighborhoods along with the annual declaration paperwork required to prove how you and your family intend to use your own private property. Will neighbors turn in neighbors? As many have responded, "It's nobody’s business.”

When the government builds affordable housing in California, the cost becomes outrageous: from $850,000 per unit built for our local Sugar Pine Village to a mind-blowing $1,000,000 per individual apartment unit in LA. The state of California spent 100 million dollars to build only 100 affordable apartments. So based on those incredible examples, the $34 million this initiative claims to take from families who can’t vote to protect themselves, we would only gain 34 apartments. That is perhaps possible if the money isn’t siphoned off to other uses or spent on a new bureaucracy full of administrators and inspectors. This initiative ignores the many suggestions and other ways that our citizens have come up with to build housing at much less cost and bureaucracy. And it ignores the impact that the 248 apartments from Sugar Pine Village and the roughly 150 to 250 units that are being worked through the system may have on the forces of supply and demand.

Currently, housing demand has softened with about 200 units for rent. This has caused some rental prices to lower. This Vacancy Tax initiative mentions that the money can also be used for legal expenses, road repairs, and infrastructure at the whim of the council. Even the five-person oversight committee would be an appointed group by those same council members. They will serve at the council's pleasure. The council changes every two years so that’s how long the best intentions may last.

Promises may not be kept. One promise that is being implied is that, if passed, those who want or need housing will immediately get to move into someone else's home or get help with their rent. Lawsuits alone will delay that for years to come. All one must do is to look at other state and local initiatives that have not fulfilled their promises to the voters. The best state example is the California lottery. It was sold as the answer to school funding. As we all now know, the funds that were allocated to schools before were diverted causing no net gain in school funding. Locally we had Measure S (2004) which promised four new ball fields for kids' sports. We only got one of the four fields promised. The college’s Measure F primarily featured a safety services academy building. Several things were built, but that facility. Measure T did not produce the scores of new rental homes promised, hundreds of local jobs were lost, and it is still tied up in court. Most recently a 4 percent increase in TOT in our own El Dorado County (Meyers, Tahoe Paradise), was passed to supposedly double the road repair and snow removal. It has become another big boondoggle. When our largest storm hit this winter, the truth came out. Some residents were snowed into their homes with no plow in sight for up to a week. It turned out that we now have half the plow drivers and broken-down equipment.

Just as many predicted, the Supervisors just diverted the funds they previously had allocated. We are all reminded of promises unkept when we drive by the Black Hole. Higher taxes with the same or worse service are the obvious pattern with these initiatives. I believe that this initiative would bring more of the same, plus mountains of legal costs to defend the Constitutionally indefensible. The proponents are even promising that schools will benefit, yet not one penny is written in it or allocated to our schools. Don’t buy the lie. Let’s not sign their deceptive petition. And should it get on the ballot let's Vote no on taking $6,000 a year from second homeowners who can’t vote here. It’s wrong on so many levels not the least of which is common sense and fairness.

Thank you for your calls, e-mails, and texts filled with many good ideas. None of us is smarter than all of us.

Tamara Wallace
City of South Lake Tahoe, councilmember
530-545-2623
twallace@cityofslt.us