Port of Hueneme – At its Board meeting Monday night, August 11, 2014, Commissioners unanimously adopted a resolution opposing Measure M, a ballot initiative that imposes a business license tax increase targeted at businesses operating at the Port of Hueneme and Naval Base Ventura County.
Public comments substantiated a wave of opposition building against the measure. Among the highly respected attendees who voiced strong opposition to Measure M were representatives from the Ventura-County based Coalition of Labor, Agriculture and Business, Indus Technology Inc., a Service-Disabled Navy contractor, the Oxnard Chamber of Commerce, and Tom Figg, a Port Hueneme resident who plans to run for a seat on the City Council in November.
Port businesses operate on the margin and even the smallest of cost differentials will drive customers to other more competitive ports. The proposed measure allows the City to increase taxes by percentages in the thousands. As captured in the Resolution, if fully levied, one customer could potentially see a tax jump from $8,100 to $1.4 million for a 17,447% increase.
In terms of economic impacts, the Resolution highlights the findings of a third party professional analysis that shows the economic stakes of this measure, including the potential risk of as many as 3,306 jobs, $251 million in personal income, $185 million in direct business revenue, $38 million in local purchases, and $28 million in state and local taxes.
“I am concerned about the negative impact Measure M will have on our Naval Base and Port,” said Commission President Mary Anne Rooney. “If the measure is passed, the overwhelming tax burden will drive away numerous enterprises who currently conduct business with The Base and Port. This would create a vacuum in the business community and cause irreparable damage to the local economy. It would be nothing short of a disaster.”
Commission Vice President Jess Herrera honed in on this point, “Ports are potent economic engines for their cities. The Port of Hueneme and Naval Base Ventura County have provided long-term employment stability to thousands of our citizens for decades. Raising taxes on multinational customers, competing in a global market only endangers jobs and economic benefits our port provides. Our duty is to ensure future generations inherit a prosperous port. This cannot be achieved by taxing businesses out of existence.”
Of much concern, the measure was adopted without any dialogue with the Port, Naval Base, Hueneme residents, and local businesses that would be impacted. The measure was posted Friday, July 18, and adopted Monday, July 21, without engaging the community on any specifics of this new tax formula. The City has until August 22, 2014 to remove the measure from the ballot. With the City Council dark in August, there is no opportunity to appear before them and urge reconsideration.
Commissioner Jason Hodge called on the City Council to swiftly revisit the issue before the deadline to withdraw, “I hope the City reconsiders this ballot measure and instead chooses to work cooperatively with the Naval Base and the Port to grow our community together.”
Measure M claims to eliminate home-based business taxes, but the impact is less than $10,000 to the City in revenue loss according to the City’s staff report. The elimination of this tax as a trade-off to create a new tax for Port and Navy businesses does not measure up. In fact, possessory interest taxes are already paid by such businesses. The Resolution cites County reports that show over $840,000 dollars in possessory interest taxes go to the City, local school districts, fire protection, water district and other critical services. Measure M puts those funds at risk.
Commissioner Secretary Dr. Manuel M. Lopez spoke to this issue, “Eliminating business taxes on all home businesses at the expense of the Navy and Port is not the answer. We all share a rich history of maritime and progress that defines the community we are today. We have realized great growth over the past several decades because of the Port and Navy. Finding ways to continue growth and prosperity should be the course for the future.”
Collectively, the Navy and the Port are the largest economic engines in the City. Through a joint use agreement they work together to bring in more cargo and create more jobs, while preserving the vital missions of the Naval Base. The Base through an out-lease program bids out property for commercial use. One such participant in this program is a major auto processor whose rent saves taxpayers millions of dollars over the term of their lease. Former Commanders James McHugh, Brad Conners, and James Rainwater submitted an Opposition Argument to Measure M making these points. Also a signatory was Congressman Gallegly who was most instrumental in the Navy-Port agreements. The Resolution supports this Opposition Argument.
Commissioner Arlene Fraser emphasized the value of Navy-Port partnership to the City, “As a life member of the Navy League I can attest to the importance of Naval Base Ventura County to our local economy. Navy and Port businesses create over 35,000 jobs, fund economic development projects and pay taxes to local cities and school districts. These businesses contribute directly to the health and welfare of the City.”
The Board passed this Resolution to bring all of these issues to light with the hope the City Council will pull Measure M from the ballot.
The Resolution, Opposition Argument and letters supporting the opposition of Measure M are available here.