Business / Economy

COMMENTARY: Hollister Can’t Do Long-term Debt With Short-term Funding

The only immediate options are to extend the transaction tax to long-term or live budget to budget with little progress; pick your poison

It was disappointing hear that some of Hollister’s valued employees might be leaving for better positions because our public purse does not allow us to compete with the nearby economic giants. I’m a free-market guy and you certainly can’t criticize someone for trying to climb the economic ladder.

Still, we cannot take on long-term debts with Hollister’s current 1 percent Measure E transaction sales tax, which is short-term money, renewed every five years at the voter’s discretion. I’m not sure we are ever going to do a lot better economically on a relative basis than we are doing right now.

The last time we tried to compete by giving substantial raises and linked benefits on our basic income the city foolishly incurred more than $11.5 million in crippling debt. It would be foolhardy to get back into that losing position.

Our "temporary” transaction tax was adopted to avoid massive layoffs and to support critical community services. Hollister’s recession is nowhere near over; in FY 2013-14 Hollister received $2.6 million in non-Measure E sales taxes, that’s 22 percent less than the $3.4 million it received 13 years earlier in FY 2000-01. Regular, non-Redevelopment Agency, property taxes produce even less, about $1.1 million a year.

Tight budgets and constant attention got us to the point where we did not need all of the transaction tax funds just to survive, we can do some other important things with the excess, but that does not mean we should use it carelessly, and especially not for long-term commitments as long as the tax has a five-year sunset.

Our economic position is still precarious, in 2014 we spent $15.5 million on primary personnel costs – wages and benefits. That worked out to $416 per capita.  However, of the 16 California cities that spent between $12 million and $18 million in this area, we were fourth from the bottom per capita; half of them spent more than $450 per capita and our spending included Measure E sales taxes which made up more than 20 percent of the General Fund revenues.

As Yogi Berra, not Yogi Bear, said, “When you come to a fork in the road take it.” Well, we are there. Either extend the tax to 20 years or live in a short-term world.  If the tax is extended we have to use part of it to generate real revenue and also stop the bleeding in other “nice-to-have” areas because we feel rich.  It’s an illusion, we remain near the bottom of the area’s economic totem pole.


Marty Richman

Born and raised in Brooklyn, NY, Marty (Martin G.) spent his teen years in northern New Jersey. He served more than 22 years on active military duty, mostly in Europe, and is a retired U.S. Army Chief Warrant Officer 4, Nuclear Weapons Technical Officer. Marty then worked 25 years in various engineering and management positions in the electronics and energetic materials industries supporting the communications, computer, aerospace, defense and automotive sectors. He is a graduate, summa cum laude, from The College of Hard Knocks, among his numerous awards and accomplishments. He was a regular weekly Op/Ed columnist and feature writer for The Hollister Free Lance for seven years and a member of its editorial board for five years. Marty is a frequent commentator and contributor to BenitoLink on a wide variety of local, state, national and international subjects.   Marty was elected to represent the City of Hollister District 4 on the City Council in November, 2018. Marty and his wife, Joyce, have been residents of Hollister since 1996.