23 Aug 2014
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Letter to the Editor: Albany’s Tax Provisions for Low-income Households Under-Utilized and Inconsistent.

Preston Jordan and Judy Kerr expand on policy recommendations to the Albany City Council by the Social and Economic Justice Commission. Kerr is a member of the commission.

Letter to the Editor: Albany’s Tax Provisions for Low-income Households Under-Utilized and Inconsistent.

Albany’s mission states, in part, that Albany “is dedicated to...responding to the needs of a diverse community.” Variation in household income is part of this diversity. This past November Albany voters decisively passed a city-wide sales tax.  Revenues from this tax will support important and essential city services.  At the same time, California voters also passed a sales tax to prevent cuts to State services.

Sales taxes have been referred to as “regressive” because they cost low-income residents a higher portion of income than they do higher income residents (who spend a higher portion of income on untaxed services).  According to the most recent US Census, one in four Albany households reported a low income according to Albany’s criteria.  This represents 1,600 Albany households who will now be disproportionately impacted by both the City and State sales tax increase.

Albany currently provides exemptions for homeowners and rebates to home renters receiving a low income for three of its property taxes: Streets & Storm Drains, Library Services and Library Supplement. These can save households from $175 to $200 per year.  Historically, a very small portion of potential households have utilized the provisions. In 2011, just 38 of the 1,600 households applied and qualified.

While the City’s tax savings programs are under-utilized, Pacific Gas and Electric runs a low-income program called CARE that reduces the cost of power by $160 per year on average.   Qualifying for CARE requires a smaller income than does Albany’s provisions, yet, historically, far more households utilize CARE. In 2010, 964 Albany households applied and qualified for CARE.

Besides the three property taxes with provisions for families having low incomes, Albany has seven other taxes listed on the property tax bill with no low-income provisions.  As a consequence, low-income households generally pay a higher portion of their income in property taxes than do other households, even if they apply and qualify for the available exemptions or rebates.

Albany also has not included provisions for low-income households in its franchise agreements, such as for solid waste hauling. This is the case even though Albany negotiates and receives revenue from these agreements, and other cities have successfully negotiated for low-income provisions. For example Emeryville negotiated an agreement with Waste Management that included a reduction for low-income households before Albany negotiated its most recent agreement with Waste Management.

In order to implement the City’s mission and correct the current imbalances, the Social and Economic Justice Commission recommended two policies to the City Council at its September meeting. First, the City should provide for education and outreach related to the tax provisions that already exist for families with low incomes.  Second, the City should include a provision for families with low incomes in each of its taxes and franchise agreements, or issue a statement explaining why this is not possible and work to change conditions to allow such inclusion in the future.

Public comment and discussion on this important economic justice issue is invited.

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