Time to get real about Measure A.

Many people–in their Letters and Op-Eds in the local papers–fear our city will fail if Measure A does not pass.  Ladies and Gentlemen: it is the exact opposite. The exact opposite.

Consider the added and significant deleterious effect a passed Measure A will have on us individually, on our businesses, and our overall local economy this fall when we are faced with other conditions that we cannot control. What I mean is, it’s already going to get bad later this year due to circumstances not under our control. We do have control over whether we pass Measure A or not, we do have the option for self-determination about what we want for our future.  And here, the magical thinking promulgated by the pro-Measure A folks is astounding.  What will the real impacts of Measure A be on our city given all other known conditions we will be facing this fall?

If you haven’t looked up the exact dollar amount you will be paying, you really really should; go here and download an Excel file that contains every parcel number and the Measure A annual tax amount.  To figure out your total 2011 special parcel taxes, remember to add $298 to your total amount in this file; that $298 is the annual AHD (Alameda Healthcare District) flat parcel tax levied each year.  When you look at the total per year, it’s stiff. When you look at the totals for a decade (they never seem to sunset), it’s shocking. …

If you vote for Measure A and it passes, when you get that parcel tax this fall from the county we will all be already suffering from the impact of the following:

1.) High food and energy prices have put global central banks on alert for inflation. The US is expecting a 10% increase in food prices this fall/winter, a rate faster than inflation.  Why? The simplistic explanation: growing global demand for food (China) + soaring demand for grain to make biofuel + recent weather that has devastated crops (reduced supply) = soaring food prices.  Sidebar (aka little lesson in economic): retail food and energy prices are typically more volatile than the prices of other goods and services because neither food producers nor consumers can immediately respond to changing prices by cutting back very much, so the full brunt of any increases in the prices of food or energy is passed on to the consumer, you could say, in real time. There’s no cushion.

2.) Unemployment is at 9 percent. And that means we expect a continued downward pressure on the housing market for the year.

3.) The Pending Homes Sales index dropped again today. That means no one will be signing on the dotted line 30-60 days from now, i.e., actual home sales will be low for April and May.  Additionally, we’ve got a huge and growing inventory of homes and lack of qualified buyers (read: unemployment [see item #2], rising interest rates, tighter mortgage underwriting standards). And to make matters worse, continued foreclosures are driving down prices, and another huge wave of foreclosures is expected this fall.  In short:  “I don’t see anything in ‘11 that’s going to make ‘11 better than ‘10,”  said Donald Tomnitz, D.R. Horton CEO.

4.) Today’s report on the Consumer Wages, Spending and Core Index indicates an unexpected pulling back on discretionary spending. Read: a  slowdown in spending/shopping on Park and Webster Ave’s plus the big box stores. Given item #1, restaurants will be hit the hardest first.

I could go on, but I think you’re beginning to get the picture. I sure hope so.  If Measure A passes, our city will fail.  Get it?  Renters and homeowners and new home buyers will be faced with a spike in special parcel taxes. Our school parcel tax is already higher than neighboring communities.  Measure A will put many of our parcels significantly higher than even Palo Alto’s (the highest flat parcel tax I’ve found to date), and Palo Alto’s median family income is twice that of our city’s!!!

People, we need to get real about Measure A.

With the increased costs Measure A will place on existing households, including renters who will have the costs passed onto them from their landlords, families will be less able to afford food and the already high percentages of our student bodies on Free Lunch will go up. The ability of families to survive, let alone spend money on extras, is already expected to tank.  So what do you think will happen to all of our (emphasis on ‘our’!) small businesses that do not get the same tax break as the big box stores?

Measure A will further depress our already depressed local housing market; our market depends upon sales of previously-owned homes (not new homes).  The only strength shown anywhere in the national housing market is in previously-owned homes. So we’re lucky there, right?  Okay.  So how do you think Measure A will further differentiate our housing market from those in neighboring communities?  Right: the few qualified buyers will be better able to purchase previously-owned homes in nearby markets where it’s even slightly easier to buy. Which, given the magnitude of the tax burden Measure A proposes, is where the special parcel taxes are lower.

I’ve heard people say that they will move out of Alameda if Measure A does not pass.  What no one’s paying attention to is this: if Measure A does pass, families will be forced to move out, homes sales and rentals will drop, businesses will fail, and retail and residential vacancies will increase.

And that’s not the Alameda any of us want to create.

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About Denise Lai

Alive. Swim (fly is the best). Walking with my dog (weims are the best). Life is good. Would prefer people understood negative externalities and prevented themselves from creating them. Feeling the love anyway. View all posts by Denise Lai

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