Renegotiating Goleta’s separation agreement with Santa Barbara County has emerged as a potentially explosive issue in the 2014 election.
The issue surfaced at a Goleta Valley Chamber of Commerce policy roundtable luncheon on Jan. 17 when Goleta Mayor Michael Bennett and newly appointed Santa Barbara County CEO Mona Miyasato appeared at one of the chamber’s regular events.
When the Goleta moved to become a city more than a decade ago, county officials tapped state law to demand a cut of the would-be city’s tax revenue — forever — as compensation for the money the county would lose. Bennett said the so-called revenue neutrality agreement, which means some $5 million in payments from Goleta to Santa Barbara County, is “the only one of its kind that’s in perpetuity” in the state of California.
Bennett criticized Santa Barbara County’s Board of Supervisors, saying it has missed opportunities to control costs or raise revenue, including an increase from 10 percent to 12 percent in the hotel bed tax. Santa Barbara and Goleta have both increased their so-called TOT taxes to 12 percent, but the county’s tax rate remains at 10 percent.
The revenue neutrality accord came about as a condition for Goleta cityhood in 2001. It funnels 30 percent of local sales tax dollars and 50 percent of property tax revenue to the county. That money is sent to the county separate from, and in addition to, the money that Goleta pays to the county for contract services such as law enforcement. An earlier split of TOT taxes expired after 10 years, and Goleta makes no payment to the county for bed taxes.
The Goleta Valley Chamber of Commerce is mounting a campaign to end or renegotiate the revenue neutrality agreement and is recruiting a number of business leaders to support the effort. The revenue neutrality accord has become an issue in the District 2 supervisor race, where incumbent Janet Wolf has said she is open to discussions about the accord.
Her opponent, Goleta City Councilman Roger Aceves, has made renegotiation of the revenue accord a cornerstone of his campaign. Aceves, Benett and Jim Farr, a third councilman, think renegotiating the county agreement could provide funding for a revamp of Goleta’s ailing Old Town business district, a move that might prove popular among business owners in the city.
Miyasato said it was up to the Board of Supervisors to decide what to do about the Goleta revenue neutrality accord.
However, she said that as the economy recovers and Santa Barbara County returns to fiscal health, rebuilding county government is not a simple process of replacing staff one for one. It means forging partnerships with community groups and using technology to deliver services more efficiently.
“We are not a vending machine. We are a resource-based organization,” she said.