Measure I and Protecting Pasadena's Quality of Life

Questions and Answers about Measure I


Q. What does Measure I do? 

A. Measure I raises the sales tax rate in Pasadena by $.0075 (three-quarters of a cent), or 75-cents for every $100 of sales. All proceeds will be spent in Pasadena to maintain vital city services, reinvest in critical city infrastructure and, if voters agree, to protect and strengthen our public schools.

Q. How much money would Measure I raise? And how would it be spent? 

A. Measure I would raise approximately $21-million per year. Proceeds would go to the City’s General Fund to support essential services, and to repair and replace critical city infrastructure – like streets, fire stations, etc. Also, one-third of the revenue would be used to support our public schools – IF voters approve the companion advisory measure, Measure J.

Q. Why should I vote for Measure I? 

A. There are two main reasons to vote YES:

1) Measure I will protect essential city services and, with voter approval, our public schools.

2) Measure I is the only way to guarantee Pasadena our fair share of future sales tax revenue.

Pasadena needs Measure I to protect essential city services:

Q. What is the problem with funding City services? 

A. Reduced revenues and increasing operating costs are making it harder and harder for Pasadena to maintain essential municipal services including fire, police and emergency 911 medical response. At the same time, we’ve had to delay spending on critical infrastructure needs – like street repairs and upgrading aging fire stations that are vulnerable to earthquakes.

Q. Why can’t the City just tighten its belt and spend existing revenue more wisely? 

A. That’s exactly what the City has been doing for years now. Pasadena has already eliminated 250 non-essential employees, slowed capital spending, and found other ways to save money without cutting vital services. Unfortunately, the easy steps have been taken. 

Without additional revenue, the City will be forced to start cutting even our core city services beginning next year. That will affect property values and our quality of life.

Q. Isn’t this really about paying for the rising cost of public pensions? 

A. No, not entirely; there are other big issues, including an unfair division of sales tax revenue that works against Pasadena. Nevertheless, growing pension costs are certainly a big part of the problem. Every city in California faces the same issue, and Pasadena has already taken every legal step to reduce its pension costs, including cutting benefits for all new employees. Because of those steps the City will eventually see substantial savings – but they won’t be fully realized for another ten years or so. 

Q. Why not just cut back on all pension payments right now? 

A. Short of declaring bankruptcy, that is not possible under State law. There are several court cases which could, after lengthy appeals, change the law on pension obligations. If that ever happens, Pasadena will reassess its options. But, for now, the City must live within the current rules and find a way to balance our budget while maintaining vital services.

Q. What about other sources of revenue, like taxing legal marijuana sales? 

A. Despite all the publicity and speculation, pot sales are not the answer. The City has already built into its budget an estimate for future revenue from taxing marijuana sales – and for the added regulatory and law-enforcement costs that come with it.  Even if those estimates prove accurate, net income will not be nearly enough to solve Pasadena’s budget problems.  

Moreover, judging from early results, the City’s income estimates may be too optimistic. Thus far, marijuana sales tax revenue is much lower than expected all across the state. 

Q. What about sales taxes on purchases made on-line? 

A. Unfortunately, on-line sales are not the solution, they are part of the problem. At present, California considers distribution centers (huge shipping warehouses, often in rural areas) to be the “point of sale” for most on-line purchases. That means cities like Pasadena, with no distribution centers, get very little sales tax from on-line purchases made by the City’s residents. There are proposals for a fairer allocation, but no legislative action in sight. 

Meanwhile, on-line sales are booming and “brick and mortar” sales are shrinking – a trend that works against retail-heavy cities like Pasadena.  So even if we eventually get a larger share of the on-line sales tax, it won’t fully offset ongoing revenue losses from the traditional sales tax.

Q. Why increase the sales tax rather than pass some form of parcel tax? 

A. More than 100,000 people come in to Pasadena every day to work, study and shop. That’s good, but it puts a heavy strain on basic city services – streets, public safety, emergency response, etc. The sales tax allows those non-residents to share in the cost of providing the services. By contrast, a parcel tax would place the entire burden on Pasadena property-owners.

A YES vote guarantees Pasadena its fair share of sales taxes.

Q. Why isn’t the current sales tax adequate?

A. Because Pasadena receives only a tiny share of the sales tax revenue it generates.  Part of the sales tax rate (7.25%) is levied by the State, with cities getting only a small fraction: in Pasadena’s case, less than 10% of the taxes collected here. The rest of the current tax rate (2.25%) is levied by Los Angeles County. Once again, Pasadena gets very little of this money.

Q. How bad is LA County’s sales tax allocation for Pasadena? 

A. On average, just 17% of County-imposed sales taxes collected in Pasadena stay here to support local services. LA County takes the rest – 83%(!) – for projects that mostly don’t serve Pasadena. 

Q. Is Pasadena the only city treated this way? 

A. No. All cities in LA County face a similar problem, especially those that generate relatively large amounts of sales tax revenue. That’s why seven cities (including Long Beach and Santa Monica) have already passed local laws similar to Measure I – and several more (including Burbank and Glendale) are currently in the process of doing so.

Q. How would Measure I fix the problem and protect Pasadena? 

A. Because Measure I is a city sales tax, LA County can’t touch the proceeds.  Every penny collected here will stay here to fund local services and schools: 100% for Pasadena! 

Q. The sales tax is already high and keeps going up, won’t this just make things worse?

A. It is true that LA County has passed five sales tax increases, including two in the last two years(!), and may well do so again soon. However, if we act now Measure I will protect Pasadena from future increases

Q. How can we be certain there won’t be further sales tax increases? 

A. State law puts a cap of 10.25% on the sales tax anywhere in California. Measure I will put Pasadena at the legal limit. That means future increases by the County will not apply in Pasadena. Our rate will stay the same.

Q. How does this work? Give an example. 

A. In 2017 the County passed Measure H to help address homelessness. In Pasadena the sales tax was raised by 1/4-cent, generating $7-million a year. Yet Pasadena receives less than $750,000 a year to fund local homeless programs! 

By comparison, the sales tax rate in Long Beach did not rise with Measure H – because that city was already at the legal limit of 10.25%. Having passed its own version of Measure I, Long Beach now keeps 100% of that money for local services. Ironically, Long Beach also gets money each year from Measure H – more than twice as much as Pasadena receives!

Q. Won’t raising the sales tax put local businesses at a competitive disadvantage?

A. In theory it could, but in practice the answer is probably not. Here’s why:

· So far, cities taking this step have seen no negative effect from the small rate difference.

· Ten cities in LA County already have (or plan to have) similar laws, and still more will probably act in coming years; so Pasadena won’t be alone.

· As LA County continues raising its rate toward the legal limit, all local disparities will shrink and then disappear. The rate will eventually be the same throughout the County.

Q. Do we have to do this now? Can’t we wait and see what happens?

A. We must act now to avoid cuts in essential services. Also, delay could cost us our last chance for a fair share of sales tax revenue. We’re already close to the legal limit; if the County should take the last bit of “space” under the cap, Pasadena will be shut out. 

So the choice is clear:  Wait for the County to raise taxes and leave Pasadena a pitiful 17-cents-on-the-dollar? Or pass Measure I and keep 100% of all future sales tax revenue right here in our city, working for us?  Either way, we will probably end up with the same tax rate. But the difference in local services and quality of life will be enormous. 

Q. How can we be sure this money will be used as promised and spent wisely?

A. Measure I includes strict accountability requirements to make sure funds are used effectively and as promised – including annual independent financial audits which will be available online. Plus, it will be easier to keep an eye on how these funds are used because ALL the money will stay local. None of it can be taken by Sacramento or Washington DC.

Q. What is the bottom line on Measure I?

A. Without Measure I, Pasadena will be forced to begin cutting into essential services next year – police, fire, emergency response and many more are threatened. Measure I will also provide a major bonus of tax fairness for Pasadena that will benefit our quality of life long after the current financial crisis is resolved. Please vote YES on Measure I!