Letter: Vacancy Tax Report Flawed!

After attending the city council meeting on June 18 at which the Vacancy Tax Report was presented, I felt it was important to make a few observations. The report was presented from the very start with apologies for the many “assumptions” contained within. Assumptions regarding every aspect of the information presented. The proposed taxes generated, the number of new residents, the number of homes in the city, the new retail sales, the revenue generated to the city, the percentage of compliance, the costs of administration, etc. I understand why the report was paid for and presented as it was because it was a necessary part of the process. But bad information, and it is certainly that, is far worse than no information. I had expected better.

Every council member who commented apologized for the rushed report and acknowledged that it was not accurate, while thanking the "Staff” for preparing and presenting it, at taxpayers' expense by the way. Calling the many unknown issues of the vacancy tax implementation “assumptions" is really quite generous. They are in fact pure speculation. They can be and were, interpreted by the council members to support their own standings on the issue, but have no basis in fact whatsoever. They fall into the "Gee wouldn’t it be great if!” category. I’ve no doubt that history will prove that this report is just a best guess, and a wrong and expensive one at that.

Many comparisons were made to the cities of San Francisco, Berkeley, and Oakland, where such taxes are in effect, in an attempt to justify imposing such a tax in South Lake Tahoe. But nobody took the time to explain the history of those taxes. These three cities all have extremely restrictive rent control policies that strip the property owner of much of the control over their own properties. Many have responded by leaving their RENTAL properties vacant. Vacant as in unfurnished, and unoccupied. These cities have responded to this action by imposing punitive vacancy taxes in an attempt to force Landlords to rent their former RENTAL PROPERTIES or be financially penalized.

South Lake Tahoe is an entirely different situation in that the targeted properties that are subject to this punitive tax, every home in the city, are not rental properties held off the market sitting empty. They are people’s homes. Fully furnished homes with food in the fridge and pictures on the wall, used for years by families and friends. To make such a comparison without noting the important basis for such taxes is not only lazy and irresponsible but shows ignorance of fact.

One of the reasons the city decided not to pursue this tax last year is due to the unknown legality of such taxes. There is now a proposed measure on the ballot in California that will, if passed, kill this and all vacancy taxes in the state. The lawsuit facing San Francisco will be decided in a summary judgment in August. If the plaintiffs prevail, our own proposed tax measure will be nullified even before the election.

If this is passed, our own vacancy tax will certainly be nullified or reversed. The city council knew this and decided wisely to await those decisions before moving forward with any similar initiative.

Several questions and points were made regarding the legal costs involved in the inevitable lawsuits that will be brought against the City if this proposal were to be passed. It is clear that the costs of defending this tax measure will be quite substantial indeed, and will result in at minimum, hundreds of thousands of taxpayer dollars spent.

This vacancy tax proposal is dividing the community as never before and will continue to do so regardless of the outcome. Any revenues gained will be minimal against the high costs of administration and enforcement. The rosy reports of increased retail sales, sales tax revenues, more available and inexpensive housing, and all of the other imagined benefits are a high price to pay for an initiative that will eventually be overturned with no actual gain for the community, and in fact, will result in a substantial financial loss to the city.

I question the ethics of the city council members who sit on the council that refused to pursue this tax initiative last year and yet allow some of their own members to openly and publicly defy their collective decision to the detriment of the very citizens that they are supposedly representing. We all deserve so much better.

- David Parola
South Lake Tahoe