City plans to use sales tax revenue for pensions

    City of Bakersfield (KBAK/KBFX photo)

    The passage of a new sales tax in Bakersfield promised tax payers increased law enforcement and fire personnel.

    People are now feeling they've been misled, after the city announced it planned to use some of that money to pay retirement pensions.

    Voters approved Measure N, increasing the city of Bakersfield's sales tax by 1 percent.

    The measure on the ballot read: "To prevent cuts/improve 911 emergency response, police/fire protection, anti-gang/drug units, neighborhood police patrols; rapid response to assaults, robberies, gang violence, home burglaries; crime prevention; address homelessness; retain, attract jobs/businesses; unrestricted general revenue purposes; shall the measure be adopted approving an ordinance establishing a one-cent sales tax providing $50,000,000 annually until ended by voters, requiring independent audits, citizens oversight, all funds for Bakersfield?"

    The expectation was that the $50 million raised would put more law enforcement and fire officials on the streets.

    Now city officials are saying they want to use a portion of the sales tax to pay into the city's employee pensions.

    Richard Gearhart, assistant professor of economics at California State University, Bakersfield, said not everyone is thrilled.

    "People are largely unhappy with this because of the amount of money that is going towards pension debt – 25 percent. That's a pretty hefty amount that's not going to police officers and that's not actually providing any services for the city of Bakersfield," Gearhart said.

    The city plans to use $12 million generated from the increased sales tax to pay CalPERS: California Public Employees' Retirement System.

    By paying CalPERS annually in one-lump sum instead of monthly, the city said it can save $8.7 million over seven years.

    Alan Tandy, Bakersfield city manager, said the money will still be used to keep the city streets safe.

    "The saved $8.7 million can go to pay for police salaries or fire salaries, or recreation and park costs," Tandy said.

    Gearhart believes people would have voted differently had they been more aware.

    "I actually think it probably would have failed if they realized how much of the increase in the sales tax revenue is going to the pension debt,” Gearhart said.

    He said in the long run it may make people distrust approving another sales tax measure.

    "This is a potentially large revenue-stream that voters took the insinuative to approve and if they abuse it then votes will be unlikely to approve any future ballot measures," Gearhart said.

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