VCEDA Board voted to oppose Measure M

VCEDA Board voted to oppose Measure M

by darlene on September 24, 2014

in VCEDA, Where We Stand

By Sandy Smith, Chair, VCEDA Policy Committee

On July 21st, the Port Hueneme City Council adopted a resolution placing a general tax ballot measure on the November 4, 2014 general municipal election now known as Measure M.  The measure would impose a business license tax targeted at businesses operating at the Port of Hueneme and Naval Base Ventura County.  On August 7, 2014, VCEDA’s Policy committee reviewed Measure M and unanimously voted to present its findings, and the Measure, to the VCEDA Board for its consideration and action.  On August 26 VCEDA’s Board voted to oppose Measure M.

Measure M was ostensibly crafted in response to one of the City of Port Hueneme’s Strategic and Priority Goals, specifically to update the City’s 37-year-old Business License/Tax Ordinance, and to bring it into conformity with current legislation and contemporary business practices.  Unfortunately, instead of serving as an update that acknowledges the fragile nature of our local economy, Measure M places new and substantial financial burdens on businesses operating in the Port at a time when other port facilities on the west coast would welcome our businesses with open arms – and with incentives.

Businesses at the Port and on our Naval Base already pay possessory interest taxes which are divided among the State, County and the City.  These taxes help fund vital community needs such as public safety and education.  The City proposes through Measure M to increase its direct revenue by more than $3 million.  This is on top of $2.8 million (nearly 10% of the Port’s gross revenue) already paid by the Port in taxes and fees to the city.

Furthermore Measure M allows discretion to lower or suspend rates at the desire of the City.  As written, the Measure sets maximum rates that become effective upon voter approval of the Measure.  A concern of VCEDA is that given the City’s efforts to pass Measure M, the likelihood of future reductions or adjustments to the business tax rate is low.  Once passed by the voters, the City Council does not have to return to the voters to either justify, or approve how they choose to negotiate with businesses on the Naval Base or in the Port.

Another area of concern for VCEDA is while the City resolution states that an important reason to support Measure M is to help defray expected significant increases in the City’s mandated contribution to the Public Employee Retirement System, the ballot measure itself makes no mention of this, instead focusing on how the measure would promote home-based businesses.   As all Measure M revenues would go into the City’s general fund, the City would ultimately be allowed to spend those funds as it sees fit.

By its own admission, City staff is unable to determine which businesses will be impacted or formulate an estimate of the potential revenue.  Without this information, the City cannot substantiate its own claim that Measure M will result in a more equitable economy for the community.  Perhaps the City would have a better idea of how the measure would impact businesses at the Naval Base or the Port if it had reached out to them and engaged them in dialogue prior to crafting and placing the measure on the ballot.

While the City has refused to reach out and engage the local business community, the City is consistent in that it shows no interest in hearing from the citizenry either. Measure M was posted on the City’s web site on Friday July 18, the City Council voted to place it on the ballot on Monday the 21st, and then Council went on vacation for the month of August.  With August 22nd set as the deadline for withdrawing the ballot measure, there would be no opportunity for public or stakeholder input. The City chose to avoid community circumspection, transparency and accountability.

As proposed, Measure M is an ill conceived and poorly structured tax increase that will have significant negative impacts not only on Port Hueneme’s economy, but the economic health of our entire region.  On August 11, 2014 the Board of Harbor Commissioners of the Oxnard Harbor District unanimously adopted a resolution opposing Measure M.  VCEDA joins our elected Commissioners in urging the voters of Port Hueneme to Vote “NO’ on Measure M in November.

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