Good morning, class. I'm Professor Brancaccio. Welcome to City Revenue 101.
Great timing, because there's a measure on the November ballot to bring more revenue to Vancouver's coffers. Anyone know what it is? Cooper?
"I read where the city wants to create a park district that would levy a general tax on property. Guess that means it would be another revenue stream for them."
"Wait a second, didn't the city just buy, like, the nicest building in Vancouver for a new City Hall? Now they're asking for more money? What's up with that?"
Well, Max, let's not connect the two, but you are right on both counts. Let's get back to the core issue here. Why is the city asking to create this park district? Danni?
"I've read several stories where the city has been beating the living, ah, heck, out of the parks budget. City Councilman Jack Burkman often talks about how the parks budget has been slashed. If approved, this new tax would bring in money just for parks."
Yes. That's the pitch. So is it fair to assume the city is losing ground on the money it's bringing in? Noodles?
"Well, yeah, that makes sense. In very difficult times, businesses only raise prices when their bottom line has been hit hard. So, the city must be way down in revenue for them to ask to raise taxes right now."
"Hold on there, Noodles. You might think that's the case. But the research I did said it just isn't so. Back in 2008, when the recession took hold, the city was bringing in about $45 million from the Clark County Treasurer's office. More, if you look at other revenue sources. This year, they expect to bring in about the same amount from the treasurer's office. If the park district passes, that would add another $5 million coming from the treasurer's office."
"What the … ?"
Easy, Fernando. Easy. OK, go ahead, Fernando.
"Well, why does the city need more money? Logic says hold the line on costs, and no slashing would be needed. Residents certainly don't have more money to give."
Logic is sometimes a pesky thing. OK, OK. Let's attack this from a different angle. Let's say the park district passes, and it brings in about $5 million. Since the city's general fund still has millions of dollars in it for parks, would the parks overall budget go up by $5 million? Jimmy?
"Well, that seems logical."
Again, logic is a pesky thing when it comes to taxes. If the park district passes, essentially what it does is free up more money for the city to spend on other things from the general fund. Yes, Hannah?
"In other words, when you get done moving the peanut from shell to shell, the city is increasing its revenue by $5 million?"
Correct. It ends up being a nice chunk of change to the city's bottom line. Jake?
"What the … ?"
Easy, Jake. Easy. Danni?
"Does it ever end, Professor?"
Good question. Costs do go up for the government. What voters need to figure out is by how much. By the way, anyone in the class get a nice chunk of change increase like the city is asking for? Any of your parents receive a nice chunk of change raise? Anybody? Anybody?
Happy birthday, Danni!