Eye on Sacramento Urges City Council: Give Back the Tax!


Date/Time: March 21, 2016, 4:00 p.m.
Contacts: Craig Powell, President,
Eye on Sacramento
Phone: (916) 718-3030
E-mail: craig@eyeonsacramento.org

Sacramento City Council Poised to Increase Utility Taxes By

$10 Million/Year as Part of its Major City Utilities Rate Hikes;

Eye on Sacramento Urges Council: Give Back the Tax!

Tomorrow evening, the Sacramento City Council is poised to approve double-digit, four-year hikes in city water and sewer rates. In 2018, the council is expected to seek voter approval of 16% annual hikes – for four straight years – in the city’s storm drainage rate. Collectively, the water, sewer and storm drainage rate hikes, if approved, would draw an estimated $88 million more each year from the pockets of Sacramento residents and businesses once fully implemented.

But there is more to the story.

Because of an imbedded 11% city “utility tax” that is unknown to most city residents, close to $10 million of the $88 million will be siphoned each year from utility customer payments and diverted into the city’s general fund to pay for the general costs of government. The diversions will reduce resources available to keep city water safe and clean, and to keep our sewer and storm drainage systems operating effectively. The diversions also drive up the need for future city utility rate hikes.

“The Council has a clear conflict of interest in deciding whether and how much to increase city utility rates,” said Eye on Sacramento President Craig Powell. “They know full well that for every dollar they increase city utility rates, they automatically divert 11 cents of that dollar into the city’s general fund due to the utility tax. This creates an almost perverse incentive for tax-hungry politicians to raise utilities rates as high as possible so as to inject more dollars into the general fund which councilmembers can spend any way they please,” Powell added.

“The Council can eliminate its conflict of interest and ease the burden on hard-pressed Sacramento residents and businesses quite easily: by returning to the Department of Utilities the $10 million in higher utility taxes that the utility rate hikes would generate each year, preferably with instructions to rebate 100% of the funds to utility customers,” Powell said.

“Several councilmembers have made public statements that major utility rate hikes are needed to upgrade and maintain our water, sewer and storm drainage systems. If that is, in fact, their sole and honest motivation for supporting major rate hikes, they can prove it quite easily by returning the nearly $10 million in higher utility taxes that the rate hikes will generate each year back to the Department of Utilities, instead of snatching it from the pockets of hard-pressed ratepayers for purposes entirely unrelated to utilities service,” Powell concluded.

Just how hard-pressed are Sacramento residents? Based on the most recently available data from the U.S. Census, EOS has computed that the mean household income in Sacramento has declined a stunning 12% from 2007 thru 2013.

The City Council will meet tomorrow evening, Tuesday, March 22nd, at 6:00 p.m. at City Hall, 915 I Street, Sacramento, CA 95814. Make your voice heard by phoning, e-mailing or coming down to City Hall tomorrow evening to make your voice heard on these important issues. Join us in urging the City Council to “GIVE BACK THE TAX!”