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Solvang displaying fiscal common sense

Balanced budgets aren’t easy to come by these days. Some are more unbalanced than others.

There is, for example, the budget currently rattling around in Sacramento. Lawmakers were supposed to reach an agreement on a state spending plan earlier this week, but as usual, did not. The budget they’re haggling over is more than $15 billion out of balance — on the debit side.

Such lopsided imbalances are common in government spending plans — but not in Solvang.

The City Council last week put its unanimous stamp of approval on a $7.1 million budget for fiscal year 2008-09, which not only is in balance from a revenues/spending perspective, but also has a little financial cushioning to deal with the small-scale emergencies that so often pop up.

The cushion comes from nearly $875,000 in this year’s fiscal period that was not spent. Solvang’s elected representatives and the city staff guiding them deserve a solid round of applause for operating with a surplus, as opposed to the deficits that dog so many local governments.

But just so everyone understands that not all the sailing is smooth at City Hall, there is the continuing debate over bed taxes, what amount of tax is appropriate, and how the money should be doled out.

Solvang voters turned thumbs down on a 1-percent boost in the transient occupancy tax — more commonly referred to as the bed tax — in November 2006. The measure needed a two-thirds supermajority to pass, but collected only a little more than 46 percent of the vote.

The council has decided to put a similar measure on next November’s ballot, but opted to place it in the “general tax” category, which by law requires only a simple majority of 50 percent plus one vote for passage.

It’s still going to be a tough sell with voters, unless city officials can do a better job of explaining why such a tax increase is needed — even if it does affect mostly visitors, not hometown folks — and how the extra revenue will be used.

The general idea is to use the funds generated by a higher bed tax to lure more visitors, making the tax something of a perpetual-motion machine. So, in a very real way, this would be a tax that would have little impact on local residents, while helping to build a stronger foundation under Solvang’s tourism-based economy.

We’ll have plenty of time between now and November to examine the proposal — and that is time that needs to be well spent by city officials in selling the tax plan.