California was always popular for beaches, temperate climate and diverse geography. It had good roads and good education. More people came. Growth itself didn’t produce enough taxes to satisfy every desire. It’s now a state known for high costs and high taxes.
Lake Havasu City has some similarities to California and not just because of the proximity and number of Californians here. Many came precisely because it’s not California.
However unfair it may be to pick on California as a symbol of high taxes and over-regulation, it’s provides convenient shorthand. Simply put, Lake Havasu City is possibly in the early stages of becoming California. It’s a slide that will worsen with unquestioning acceptance of proposed new taxes and fees.
It shouldn’t be this way. Lake Havasu City is booming. Tax revenues are increasing, especially sales tax revenue that are a signal of economic health.
So why isn’t growth itself taking care of city government’s need for more money? Why does the city say it needs extra millions of dollars for water and sewer and general government? Why is the city seeking all sorts of feedback on higher water and sewer rates and a handful of options to add taxes or extra fees? Shouldn’t growth take care of these needs?
Options the city’s discussed includes commercial lease taxes, higher property taxes, higher sales taxes and higher hotel bed taxes.
City officials point to a “structural deficit,” a term that just means they’re already overspending and will continue to do so unless there is more money coming in. Then there is the upcoming sunsetting of the city’s Irrigation and Drainage District, which supplies millions of dollars in property tax revenue.
City government is burdened with massive expense obligations over which it has little control. It has the most control over its general fund, which is actually the nest of the structural deficit. Until a few years ago, the general fund was flush enough that several million dollars per year was diverted from the general fund to keep water rates stable. That no longer happens.
What of the other money needs? The answers are less obvious but include pension obligations, uncertain road money and payroll growth.
As city government chases many revenue alternatives, it’s entirely possible the population will go along with the most general explanation that costs just increase over time. In so doing, many will look to the least-painful options for themselves. In so doing, they provide acceptance for the need for higher city spending.
Once residents are OK with, say, a higher bed tax, the discussion of “why the need?” is over. From there, it’s easy to slip into a gradual acceptance of other taxes and fees.
The city has been a strong proponent of growth, correctly recognizing that new, good jobs and a well-muscled business community provide money for new city services to improve the quality of life here.
More taxes and fees limit that growth, which brings us to California again.
City government needs to offer much more convincing reasons for why it needs more money and why the pro-growth approach to development isn’t enough to slake its money thirst. Providing choices on types of taxes and fees isn’t the same as justifying them.
— Today’s News-Herald