About Manteca’s ponzi scheme rooted in new home construction, the boogeyman & taxes


Manteca Mayor Ben Cantu is not the bogeyman.

Nor is he a modern version of Nostradamus.

Yet the second he dares to utter the two words “tax increase,” it puts the pitchfork and torch crowds in line.

Cantu, as a member of the City Council, does not have the unilateral ability to raise taxes.

He also does not have the opportunity to impose new or increased taxes together with two council colleagues.

Rest assured that his consistent push for a voting measure that lets the people for whom the city of Manteca exists decide how much government amenities and services they want will be a major issue in the upcoming mayoral election.

The tax is a potential increase in sales tax.

A penny jump would bring in $19 million annually, or about a 30 percent increase in today’s general fund, which covers the costs of day-to-day community services like police and fire departments and road maintenance.

With the door practically closed in the 2022 election to putting such a measure on the ballot, the tax debate now seems kind of moot.

Finally, the next time under California law, a tax measure may be presented to voters in the 2024 election cycle.

And if approved, the additional income would not reach the municipal coffers until the end of 2025.

That is precisely why now is the right time for the discussion.

Unlike the successful half-cent public safety tax for Measure M, which originated in the community rather than by city employees who teamed up with advisors to read which way the wind was blowing, Measure Z – the unsuccessful tax measure for 2020 – raised by employees.

The council at the time put it on the ballot and then — with the exception of Cantu — channeled chickens and distanced themselves to offer protection from political repercussions should the measure fail.

Not only did it fail, but over time it became apparent that the city manager, who was returning to Canada, and her sidekick, who was packing up and moving to Texas, using the city’s accounting chaos to conclude that the city without the In a world of harm one cent would be a sales tax increase.

As a result, more credence was given to a half-truth regarding Manteca’s financial stability.

The focus is on the misrepresentation that the Manteca municipality is addicted to housing construction.

Exactly that is not the case.

Yes, the $600,000 new home brings in $6,000 annually in new property taxes, of which $1,020 goes to the city.

But the real bump is the home that sold for $425,000 a dozen years ago, which went from paying $5,000 a year in Proposition 13 property taxes that sold for $1.1 million to $11,000 new property taxes per year.

Councilor Charlie Halford is partly right when he says that new houses make old houses smaller. This is especially true if ownership of a house has not changed for 20 years or more.

In the San Joaquin Valley, homes typically sell every 13.8 years.

That means a big jump in real estate values.

In most cases, the new owners have a more solid income than the owners they replaced. That means they have more disposable income. As such, they have more money for voluntary spending, which typically includes items that are subject to sales tax.

Because of this, what some are calling Manteca’s new housing Ponzi scheme to fund city services hasn’t collapsed.

Removing the protections of Proposition 13 — capping property valuations at 1 percent of the market for which a home is sold, and then capping annual property tax rates at 2 percent — isn’t the answer.

By doing so, it would expose home ownership to the ravages of inflation and housing market trends.

Reality must be understood before tax increase proposals are discussed.

This reality also includes what Manteca can and cannot deliver with the city’s revenues.

It has to start with not just parroting decades-old lines about government, crime and the like.

Halford is right. The crime rate per 1,000 inhabitants, not only for crimes but also for misdemeanors, has steadily decreased in Manteca.

This is important to know, because any distraction that puts aside – or generates even more money – to go to the police would come at the expense of other problems that have gotten worse.

If you still want more money for the police then buy them in knowing what it’s going to cost.

Some want everything and don’t pay a cent more in taxes.

His delusional thinking. It ignores that 85 percent of local government spending on wages and benefits goes to the people providing needed and/or desired services. Not only all of that, but wages and benefits, as well as the materials, fuel, electricity and the like that a city needs to operate are subject to inflationary pressures.

If councilors are to offer voters options to determine what level of community service they want and what they are willing to pay for, they must move away from their current approach.

Three times in the past five years, the council has relied on consultants, rather than the community, to determine what the community wants and can afford.

They did it with the $68 million recovery plan, the prelude to Measure Z, and now the Community Priorities Survey, which was a Trojan horse for the November 2022 sales tax election that the council passed.

After the November election, the council was set to form a 10-member citizen body, just as then-town manager Steve Pinkerton did when Manteca faced massive budget cuts in 2008 due to the Great Recession.

Each council member would have two appointments.

As in the past, it would be an open and transparent process.

The city was able to go through its books and financial trends openly and transparently. They were also able to determine the cost of additional services and amenities.

It would also be an opportunity to demonstrate that if the city cuts municipal spending in one area for another, it would affect services.

Then the citizens’ committee could make a recommendation after an actual funding process.

They might be satisfied with the current level of service and advise the council not to pursue a new tax.

Or they could decide that there is a need to increase municipal revenue and recommend to the council how to go about it.

Such a process would mean that the citizens’ perspective, as opposed to the probing of advisors, would guide the design of a potential tax increase proposal.

It would also lay the groundwork for a community-based push for possible new taxes, rather than one passed on by the council after being trained by highly paid advisers who are here today and gone tomorrow.

This column represents the opinion of the editor, Dennis Wyatt, and does not necessarily reflect the opinion of The Bulletin or 209 Multimedia. He can be reached at [email protected]


Comments are closed.