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By Diana Diamond

Do city officials ever consider giving taxpayers a break?

Uploaded: Dec 2, 2019

Advice to new government officials: Spend! And then, get more money from taxpayers! Get it again! And again

Keep on asking!

Fellow taxpayers, I think we are simply a convenient cash box for our local government districts. They spend and spend, and then want money to pay for things that they should have budgeted for. And this “ask” seems to be an annual refrain.

Palo Alto has an unexpected $76 MILLION budget surplus this year, due to increases in sales and property taxes, more taxes from hotel visitors, and selling off former City Manager Jim Keene’s home, for which the city paid about 2/3rds of the cost.

Included in that whopping $76million surplus is an increase of $19 million over last year in its electric fund in the utilities department revenues, and a $5.3 million jump in its natural gas fund. These increases come from the money you and I pay each month on our utilities bills. My November bill was $450, and it will probably soar to $600 during the winter months because I have electric heating. My summer bill is about $225. BTW, we only heat the family room, and only one of our four bedrooms in winter months, not the living and dining rooms. (Yet the city is getting on the bandwagon requiring all new houses to use only electricity, not gas, to heat these homes. Have they considered how much more electricity-heated houses will cost people?)

But what really rankles me is, that despite the huge and unexpected surplus, Palo Alto is planning again to increase its utility rates. The department is looking for a 3 percent electricity increase and a 5 percent natural gas hike – even though this past year it had a combined $24.3 million Utilities Department in income increase. Two fiscal years ago, in June 2018, the city raised its electricity rates by 6 percent and gas by 4 percent. Rates were also increased again this past June, according the Palo Alto Weekly and the Palo Alto Daily Post.

Do city officials ever say, enough, we can make it this year and next, and let’s give taxpayers a break?

Do they ever consider it would be okay with all of us if our rates did not increase every year? And what about that utilities surplus – do council members ever think that could be used to pay for escalating gas and electric costs, since it is our dollars for utilities rates that contributed to the city’s surplus? A deliberately avoided discussion, I guess.

Of course the Utilities Department always has a reason for more, more, more – and our council members silently nod in acceptance except for member Greg Tanaka, who does a great job looking at the numbers and asking why the increases. He gets little support from his noninquisitive council members.

And still the city wants more taxes! Palo Alto is again exploring the idea of levying a business tax in March on the commercial sector, to pay for as yet undefined transportation and housing projects. It’s been trying for years, unsuccessfully, to raise taxes from businesses in town.

But it’s not only the city that is on this constant “ask” track.

The Foothill-DeAnza College District two weeks ago decided to ask taxpayers this coming March for two tax increases -- an $898 million facilities bond, the largest in Santa Clara County’s history, which would cost taxpayers an average of $16 per $100,000 of assessed valuation ($160/year for a home with a $1 million AV along with a $48 parcel tax (levied on each property owner’s home) that would generate $5.5 million for each of five years. If taxpayers approve, some of that money may go, not for education, but for providing affordable student and staff housing. Many of the students have financial difficulties. And enrollment has declined in the 20 percent range, which, ironically, lowered state funding of the district, which is based on student enrollment.

And the Palo Alto School District? Well, their turn will come up next June, when they consider the money the state is giving them. PAUSD is one of the wealthiest districts in the country, but why shouldn’t they also enjoy the asking game.

After all, all that new money comes from us, not from their careful budgeting.

P.S. I forgot to add that each year the city's Utilities Department must urn over a substantial sum (typically about $16 million) of the utilities rates we've paid to the city's general fund. Originally, this turnover was considered as a "finder's fee" for the city which started its own Utilities Department. Other rationales for this turnover have subsequently been rationalized.