Letter: Burbank’s Budget Problem Discussed

By On October 18, 2017

Letter to the Editor:

Burbank faces a financial crisis over the coming years. It’s a crisis 20 years in the making, and one that is going to require difficult decisions to address.

But these choices need not be nearly as draconian as the “dystopian” cuts presented to the City Council at a recent Study Session, and outlined in a recent MyBurbank article [LINK: https://myburbank.com/10/sections/city-of-burbank/burbank-faces-large-budget-cuts-following-rising-deficit/]

Quite the opposite, in fact.

This crisis provides an opportunity to affirm what makes Burbank such a wonderful community in which to live. And it provides an opportunity to enshrine a long-term commitment to good and responsible governance.

First, how’d we get here?

The bulk of the looming deficit comes from three sources:

1. A recent court decision ruling a certain tax was improperly structured (COST: ~$11.7mil per year)

2. A decision in the late 1990s to pause funding the City’s pension fund, which was at the time 140% funded, but is now 80% funded. This is cost hitting Burbank now, because CA State recently required cities statewide to re-fund their pension funds. (COST: ~$16mil per year)

3. Years of “deferred infrastructure” spending – an unfortunate side-effect of electoral politics, in which necessary but “boring” spending gets postponed in favor of more visible projects – a problem that seems to plague every level of the US Government. (COST: ~$20mil per year over 30 years)

How do we get back on track?

Fixing the “tax ruling” should be relatively easy through the appropriate ballot measure. The tax in question (“In Lieu Tax”) has been on the books in various forms since the 1950s, but its current formulation runs afoul of more recent CA State legislation. Updating the wording to bring it in line with current regulations should address this situation.

The “pension funding” and “deferred infrastructure spending” decisions are both regrettable, but Burbank is hardly alone in making such decisions. And the funding that should have gone to pensions and infrastructure was by no means wasted – it largely went to provide the quality services that make Burbank such an amazing community.

Over the past 20 years, Burbank City Councils have provided valuable services to their residents – but these services came at a cost. And that cost has now come due.

The good news?

We don’t need to close parks or lay off police officers to balance our budget. The solution to these problems is not nearly as gut-wrenching as it seems. For example, a 0.75% increase to the City’s sales tax (less than one cent on every dollar) would address about 70% of the budget deficit. And a small increase to the “Transient Occupancy Tax”, a tax on hotel rooms, not paid by residents, would cover much of the rest. These two small increases, combined with sensible cuts that increase efficiency without cutting services, would allow Burbank to:

– Meet it’s California-imposed pension obligations
– Steadily fix its aging infrastructure
– Maintain the quality services that make Burbank such a wonderful community

The eventual solution will no doubt be more complex and involved than a simple 1% sales tax. But it shows that the problems we face are well within our ability to manage, without drastic cuts that wreak havoc on our community.

What does it take to do this?

It takes citizens to stand up and say,

“We love Burbank, and we want to preserve what we have. But to do so, we need a City Council that will make a long-term commitment to rebuilding our infrastructure and maintaining current service levels. And if it costs a bit to do that, then we’re willing to invest in Burbank.”

 

I believe this is well within our reach. And I believe it’s a chance for Burbank to serve as a positive example for what good and responsible governance can achieve for a community that believes in itself.

Dr. Simon Lutterbie

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