Thursday, February 11, 2010

Could Amalgamation Wipe Out Structural Deficit?

On Facebook Tara Russell asked:

For years Cities like San Carlos have been shunning the idea of amalgamation - San Carlos has a population of approx 28,000 Belmont about the same - together they are less than Redwood City or San Mateo. I would like to see a study of potential savings that could be reached if the two Cites were to amalgamate, at least support functions (e.g. finance dept, HR, IT) if not operating Depts as well. Loosing a Cities identity is a concern when times are good and we can all get everything we want, but when a community like San Carlos, that is so committed to outdoor living, is left to consider life without full access parks then I think we all need to get a lot more creative.

WE NEED A WONK to weigh in here. Could amalgamation wipe out the structural payments issue that plagues San Carlos finances?  Could it offer a 50%ish boost to city revenues?  Let's just brainstorm here.

First, let me say that I love SC.  That's why I live here.  It is just that I grew up in a small New England village that was amalgamated into one, very insubstantial, but fiscally healthy town.  Each village retained an identity.  And at least one neighboring village that went it alone, literally withered and died.  Time has a way of doing that.

Quick background: SC suffers from a 'structural deficit' (the city is perpetually underfunded). The cause is that when Prop 13 passed (limiting property taxes generally) San Carlos was locked into receiving a 13% payout on local property taxes, whereas neighboring towns average 20.2% (see: smartvoter.org).  That's right, your property taxes are paid elsewhere, and only a portion of it is returned to the city.  By a quirk of timing, San Carlos expenditures were low at the moment that rates were locked into a Prop 13 funding formula. And so, we must suffer forever. Prop 13 is a third rail of CA politics. Touch it and die. No solution..... Or?

If we were to amalgamate with Belmont, could that be enough premise to nest under the higher Belmont remunerations? I will gladly abandon the San Carlos name in order to increase our funding by 50%+. I could see the legislature, or whoever approves amalgamations, or oversees property tax payouts becoming open to a lobbying effort that was tied under this umbrella issue.

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