By Terry O’Day Co-Chair, Save Our City
In the realm of policymaking, even the best of intentions can have disastrous consequences.
That is what the leading spokesperson for the so-called RIFT (Residents’ Initiative to Fight Traffic ) ballot measure — Diana Gordon — and her sponsors are proving. In responding to widespread concerns amongst public education leaders that RIFT would, if passed, result in substantial city funding cuts that threaten our public schools, Ms. Gordon is claiming that RIFT will cut annual city revenue by $11 million in 2023 (RIFT’s last year) out of a budget she estimates at $1 billion — or only about 1 percent.
This shows a serious misunderstanding about both the scale of lost city revenues and the relationship of that loss to the city budget. The only independent fiscal study conducted on RIFT to date — prepared by two highly respected consulting firms — concludes that RIFT would cut general fund tax revenues by $11.8 million in 2023, expressed in 2008 dollars, not inflated 2023 dollars. Adjusting the $11.8 million number by 5.77 percent annually — the compound annual average rate at which the city’s general fund tax revenues have increased since the mid-1990s — the 2023 general fund budget impact of RIFT would be $27.4 million in 2023 dollars.
Ms. Gordon’s comparison to the city’s entire budget — including a number of special funds (e.g., infrastructure enterprise funds, cemetery fund, pier fund) — is also misleading. This $11.8 million loss includes only general fund tax revenues and not losses to city enterprise or other funds, which together make up the city budget. In 2008, the city’s general fund budget (the primary source of funding for all services, including a contribution to our schools), is $251.7 million.
The correct comparison is between $11.8 million in lost revenues and the city’s current $251.7 million general fund, or between the inflation-adjusted value of the loss and the inflation-adjusted value of the general fund in 2023. This is about 5 percent in either case (i.e., five times the impact stated by Ms. Gordon).
Though Ms. Gordon tries to minimize it, a loss of $11.8 million per year is not trivial. Compare this amount with the current cost of city services. That $11.8 million is nearly half our expenditure on fire protection and one-fifth of police. It is more than the cost of running the city’s libraries, more than our affordable housing capital fund, one and one-half times more than the city’s contribution to the school district, and more than all general fund and pier fund capital projects combined. These discretionary programs are most at risk from RIFT.
All Santa Monicans want solutions to our traffic. But qualified, independent analysis shows that RIFT WILL NOT SOLVE TRAFFIC CONGESTION AND it will cut city funding for our most important community services, including our public schools. By suggesting that it is acceptable to risk our exceptional schools, libraries, police, fire and other services, Ms. Gordon also misunderstands Santa Monicans and their values.
Originally published in the Santa Monica Daily Press print edition on August 4, 2008. Read the original PDF.