Thursday, October 16, 2008

More on the Revenue Implications of RIFT

Mr. Robert Moskowitz has posted a comment on this blog, complaining that the reasons that I've cited for opposing RIFT are unfair and in some cases, wrong. Ouch!!

His biggest complaint with my reasoning seems to be that,

"Proposition T will not reduce revenues, merely limit the growth of revenues in the future by limiting development in the future."
And technically Mr. Moskowitz is correct, as indicated in the analysis done for the city. And if I wasn't completely clear in my explication of this fact in my posting under Reason #4, than I am sorry. Mr. Moskowitz wins that point. But this is a Pyrrhic victory, since the underlying objection I, and many opponents of the measure have on this point, is not that this will cause a decline in revenues per se, but that it will result in a net revenue loss. Under Proposition T, revenues will grow, as Mr. Moskowitz correctly points out, but not as fast as expenses, so the net result will be a loss of over five and one-half million dollars per year. How can this be you ask? Well, commercial uses pay the freight in this town, subsidizing those of us who live here. If you're looking at your property tax bill just now, you're probably thinking I'm out of my mind, but businesses pay even more taxes and utilize less services. That's the way it works in virtually every city in this nation, and though we may sometimes think otherwise, we are no different here in Santa Monica.

So not only will Proposition T not work relative to its stated intention, to reduce traffic (more on that tomorrow), it will have the added effect of damaging the City's fiscal health -- sort of akin to a good old fashioned bloodletting to fight disease.


Jason Kligier said...

Great site Neal. Question: what happens under the RIFT plan if Santa Monica is hit by a catastrophic earthquake and many buildings are leveled and otherwise damaged? Are we only allowed to rebuild a few per year? Will we still be living with many vacant, red-tagged properties decades after?

Neal Payton said...

Great question, Jason. I guess the the citizens of Santa Monica could be offered another ballot measure, where we could wage another spirited campaign to see if the 75,000 square foot cap could be ammended. Or, the City Council, using the formula in the measure, could determine a square-foot for square-foot replacement strategy. Geez, let's all hope that's an issue we don't have to face.

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