LATEST ATTACK ON PROPOSITION 13, THE BUDGET ACCOUNTABILITY ACT INITIATIVE

Jim Sanders of The Bee reported that, “a million-dollar campaign was launched — to place before voters a measure to make it easier for the Legislature to pass a budget - and raise taxes. The proposed constitutional amendment would lower the threshold for passing a budget from a supermajority (66.6%) to a 55% majority of each legislative house. It would also force the governor and the legislators to forfeit their pay and living expenses for every day they exceed the state’s June 15th budget deadline.” The ballot proposal exempts property taxes, but would lower the number of votes needed to raise sales, tobacco, gasoline, income and other taxes. The principal backers of this initiative, at $250,000 each, are the California Teachers Association, the American Federation of State, County and Municipal Employees, and the California State Council of Service Employees. The coalition in opposition to the Budget Accountability Act, are the Californians Against Higher Taxes, who call the measure the “Blank Check Initiative.” Their backers are the Chevron-Texaco Corp., the BP Corp. North America, Philip Morris USA, Anheuser-Busch Cos., and State Farm Mutual Automobile Insurance Co. If the “Blank Check Initiative” succeeds, the tax and spenders of the majority party of the legislature will be able to pass every tax increase they desire without a single Republican vote. The Taxpayers League will consider joining the Coalition at its August 21st Board Meeting.

OTHER ATTACKS ON THE TWO-THIRDS VOTE REQUIREMENT

If the constant attack on Proposition 13’s two-thirds voter protection requirement fails, our tax-and-spend legislators have contrived a series of proposed constitutional amendments to destroy its requirements:

SCA 2 - Allows local governments to impose a sales tax or special tax with a simple majority vote for roads and to support “smart growth”.

SCA 11 - Allows cities, counties, and special districts to impose special taxes or incur bond debt with a simple majority vote for roads, affordable housing, maintaining open space and other similar needs!

ACA 4 - Allows school districts, community collage districts, or the county office of education to impose a parcel tax with a 55% majority vote for educational operating needs.

ACA 7 - Allows local or regional transportation agencies to impose sales taxes of up to one-half percent for transportation needs with a 55% vote.

ACA 9 - Allows passage of bonds for maintaining public facilities with a majority vote.

ACA11 - Allows passage of bonds for maintaining public facilities with a 55% vote.

ACA 14 - Allows local governments to impose a special tax for public facilities, land conservation, emergency shelters, low-income housing, and neighborhood improvements with a 55% vote.

ACA 15 - Allows local governments to impose a special tax for fire, police and other public-safety departments with a simple majority vote.

SWAPPING SALES TAXES FOR PROPERTY TAXES

A “deal” made by the Legislature to identify a source of repayment money acceptable to lenders being asked to buy over $10 billion worth of state five year bonds to cover part of the budget shortfall, worries city and county elected officials throughout California. The “deal” involves swapping counties and cities their one-half percent portion of state sales tax income in return for an equivalent amount of local property tax income that the state uses to pay for schools. Cities and counties are afraid the state will renege on the deal based on its move in 1992 that took property taxes from local governments to cover a state budgetary shortfall for school funding. They have a right to be worried.

In 1992 California local government officials lost much control over money necessary to manage their fiscal affairs as a result of state budget decisions and initiatives on local finance. The major impact came, when, in response to multi-billion dollar state budget shortfalls, Governor Wilson and the Legislature shifted $3.4 billion in property taxes from local government to schools by creating an Educational Revenue Augmentation Fund (ERAF) in each county. Counties, Cities, Special Districts and Redevelopment Agencies had to shift funds to ERAF to reduce the states funding obligation to schools and community colleges. This allowed the state to reduce educational spending from its general fund to meet Proposition 98 school funding guarantees. The state government thereby avoided cuts in other programs, and the need to raise taxes. Since, local governments have recovered only about two-thirds of the lost property revenue as a result of Proposition 172, the half-cent sales tax voters passed for public safety. And this is what the Legislature is playing with.

Former Sacramento Mayor Joe Serna, just before he died, planned to push for a constitutional amendment to return property taxes to local control, taking away the state’s ability to “raid” local government tax revenues. And to this end he sought support from the Howard Jarvis Taxpayers Association, and the Taxpayers League. We agreed that local government should have more control, as long as it was implemented without harm to Proposition 13. And we are still willing to help any elected official(s) who exhibit Joe’s willingness and courage to take on the Legislature and return property taxes to local control where it belongs.

ASSEMBLY DEMOCRATS UNKNOWINGLY BLAB INTO LIVE MICROPHONES

For over an hour on July 21st, a group of Democrat Assembly Members in a private meeting in the Capitol inadvertently discussed political strategy on budget issues, and possible political effect on incumbents, before live microphones, which broadcast their comments throughout the building. The Bee reported that the talk was heard inside the Capitol, and by those who subscribe to a service carrying such transmissions outside the Capitol, including lobbyists and the media.

The conversations were almost entirely political, rather than budget oriented, as guesses were made as to who would support various recommendations, and the resulting political impact. Among impacts that concerned the talkers was how the budget impasse would affect the Budget Accountability Act, the so called “Blank Check Initiative” covered earlier, that they hope would pass. Someone remarked a budget delay would help the initiative aimed at lowering the approval threshold. Assemblywoman Jackie Goldberg declared the budget crisis would illustrate the damaging effects of Proposition 13, which limits growth of property taxes. Reported was that she went on to say “Some of us are thinking that maybe people should see the pain up close and personal.” What a beautiful attitude for someone elected to represent the people! No wonder we have problems with those who handle our money in the Legislature.

LEGISLATOR’S APPROACH TO BUDGET NEGOTIATIONS

Chargoggagoggmanchauggagoggchaubunagunamaugg (we hope we spelled it right, and wonder what the natives call it for short?) is the name of a lake in Massachusetts, which means: “You fish on your side; I fish on my side; nobody fish in the middle”. This is precisely the exercise we have witnessed in the Legislature between the Democrats and Republicans as they finally came to a budget resolution.

BONDS IN GENERAL

The Kern County Taxpayers Association’s News Letter did an analysis of state bond issues and related that the state had a bond indebtedness of $28 billion as of July 2002, which is costing taxpayers $2.9 billion a year in payments. In addition the state has almost $11 billion of voter-approved bonds that have not as yet been sold. With the sale of these bonds annual payment will raise to $3.6 billion.

The state’s bond rating has fallen from AA to a rating of -A, making it close to the level of “junk” bonds which will cost more in interest when new bonds are sold.

Further, we will be faced with more bonds this and next year to pay for debts incurred by the present administration which may approach $20 billion to close out the fiscal year. This includes over $10 billion in short term 5-year bonds transferring part of the current debt into next fiscal year. Other bonds include a bond for a high-speed rail system, and another $12.3 billion to support repair and replacement of school facilities.

NEVADA SUPREME COURT SUPERSEDES CONSTITUTIONAL REQUIREMENT FOR TWO-THIRDS VOTE TO PASS TAXES

The Nevada Supreme Court ruled, July 10th, that the Nevada State Constitutional requirement that tax increases be passed by a two-thirds vote of the Legislature must give way to the Legislature’s constitutional mandate to fund public education. The court said the Legislature must work to approve a tax plan under a simple majority rule.

In a 6-1 opinion the court said the two-thirds vote required for tax increases is a general procedural requirement, compared to the substantive right to education. “If the procedural two-thirds vote requirement in effect denies the public its expectation of access to public education, then the two-thirds requirement must yield to the specific substantive educational right,” the court said.

The Nevada Governor filed a lawsuit after lawmakers failed to enact a funding plan for education, or a tax plan to pay for state programs, by the end of their regular 120-day session and two special sessions he called in June.

The Nevada Assembly approved a measure July 13th to fund education and established a tax plan, under a simple majority vote. The move was challenged by a group lawmakers and taxpayer advocates, who won a restraining order from a U.S. District Court judge blocking the Senate from taking action. A panel of federal judges has taken the matter under advisement, and stated they would rule quickly. Their final decision could have a major impact on some of the two-thirds vote requirements for tax and budget approval in the California State Constitution. If such legal moves are made in California, Jonathan Coupal, President of the Howard Jarvis Taxpayers Association, in league with the Pacific Legal Foundation, intends to ask the California Supreme Court to be allowed to intervene as a party in opposition to any filed case.

MEASURE A - THE TRANSPORTATION SALES TAX OF 1988 REVISITED

Currently, local officials are preparing for a campaign to ask voters to extend Measure A, which, in November of 1988, added a half-cent tariff as part of the County’s present 7.5% sales tax. The tariff was specifically aimed at supplementing county, cities, and the transportation agency’s funding for transportation projects. Measure A is due to expire at the beginning of 2009. The plan is to put a Measure on the ballot in November of 2004, if possible, well before the 2009 expiration date, trusting voters will recognize the importance of continuing improvement and expansion of transportation capabilities, and will extend the tax.

The Taxpayers League first addressed and supported the tax for the June ballot in 1988. The Measure failed to pass, and the proposed half-cent tax was carried over to the November ballot. Once again, recognizing the importance of improving the regional transportation infrastructure, the League supported the reborn Measure A, and it was passed by the voters.

The tax accounts for about 20 percent of the money spent in Sacramento for transportation related projects, and the flow of such money is essential to assure local matching funds are available to obtain federal funds for major projects. Executive Director Carl Burton is the League representative in the Transportation Authority, which project transportation needs of the future.

PROPERTY TAX ROLL TOTALS ANNOUNCED

County of Sacramento Assessor Ken Stieger announced that the 2003-2004 Assessment Roll was completed on July 1st, and that the final total assessed value of the combined Secure and Unsecured Tax Roll is $82,551,872,101(net exemptions). This total represents an overall increase of approximately $7.215 billion over the 2002-2003 Assessment Roll total, or a percentage increase of approximately 9.58%.

The growth in the property tax roll reflects the general and continuing upturn in the real estate market that began in 1998. Last year, for example, the roll grew by some 10.04%. Between 1984 and 1991, the annual roll increases exceeded 19% a year; however, during the 1991-1999 real estate recession, roll increases averaged only 3.06%, including the 1996 roll, where the increase was only 4-tenths of one percent.

COMMUNIST MANIFESTO

Among major elements of the Marxist Communist Manifesto is:

1. Abolition of property in land and application of all rents to public purposes.
2. A heavy graduated progressive or graduated income tax.
3. Abolition of all right of inheritance.
4. Confiscation of property of emigrants and rebels.
5. Centralization of credit in the hands of the state, by means of a national bank with State capital and an exclusive monopoly.
6. Centralization of the means of communication and transportation in the hands of the State.
7. Extension of factories and instruments of production owned by the State, the bringing into cultivation of wastelands, and the improvement of the soil generally in accordance with a general plan.
8. Equal liability of all to labor. Establishment of industrial armies, especially for agriculture.
9. Combination of agriculture with manufacturing industries, gradual abolition of the distinction between town and country, by a more equable distribution of population over the country.

Every American should have these attributes posted on the wall as a general warning of how easily it is to be lulled into the vise-like grip of a totalitarian government. It is often true that the seeds of a nation’s destruction lie, not in the hands of an external force, but grow as weeds internally, from inattention of its citizens.

MEMBERSHIP RECRUITMENT

Our Members constitute the League’s strength, and we need our Members to recruit others to enlarge our base. As you read in the paragraphs above, Taxpayers will be assailed as never before for additional money from every level of government in the form of fees, assessments, rates, and taxes. Locally, the Taxpayers League is the only recognized and organized defender of the County and its Cities taxpayers capable of putting up a viable defense.

Over our 42 years, we have successfully defeated many attempts to raise taxes, rates and fees in the County of Sacramento. Such battles are expensive. And those we are engaged in now, and new attacks to be faced are frightful. Members must remember that the League is composed of dedicated volunteers who battle not only on Member’s behalf, but also on behalf of people who virtually cannot help themselves forestall the onslaught. To be successful we need Members to strengthen the League by recruiting friends and associates as League Members; to donate money to the General or Defense Fund if possible; and to provide the League with names of those the League should contact as possible Members. A recommendation form is included as the Insert.

LETTERS TO THE LEAGUE

We seek “Letters to the League” from Members concerning projects and issues on which we are working, along with recommendations on those we should look at. Letters may be edited and republished in any format, primarily in the interest of available space. Send letters, faxes, or e-mail to the Sacramento County Taxpayers League. Our e-mail is sactaxleague@prodigy.net; our telephone and fax number is (916) 921-5991; and our address is:

Sacramento County Taxpayers League
1832 Tribute Road
Sacramento, CA 95815

For the recall of Governor Gray Davis, The People’s Advocate (the principal sponsor of the recall effort), as of July 23, submitted 1,651,191 signatures to the registrar of voters. The registrar of voters reported the People’s Advocate obtained 1,356,408 valid signatures, including 61,546 valid signatures from Sacramento County.

The People’s Advocate has about 400,000 more signatures that were not submitted (received after July 23), and is still receiving about 1,000 signatures a day. Because only 897,157 valid signatures were needed for the recall election to take place, Secretary of State Kevin Shelley announced that he is required by law to instruct Lieutenant Governor Cruz Bustamante to call a special recall election within 60 to 80 days. Lieutenant Governor Bustamante set Oct 7 as the date for the special election.

In addition to the recall of Governor Davis, two statewide propositions will appear on the ballot. Proposition 53 - a proposed constitutional amendment sponsored by the Legislature that will require a portion of the state’s budget be set aside for infrastructure spending, and Proposition 54 - the measure sponsored by Ward Connerly that seeks to ban government agencies from collecting racial data.

The last day to register to vote in the special election is September 22. Absentee voting begins on September 8. And the last day to apply for an absentee ballot by mail is September 30.

According to information from California’s Secretary of State, the estimated cost of conducting the October 7 election is between $42 million and $55 million. In addition, approximately $11 million is needed to provide California’s 15.3 million registered voters with the voter information guide. Thus, the total estimated cost of the October 7 election is $53 million to $66 million. The estimated cost is based on data supplied by California’s 58 counties. Counties revised earlier cost estimates to reflect increased costs as the October 7 election was not consolidated with the local elections scheduled for November 4, which results in increased postage cost, staff overtime, printing costs, and other factors resulting from a compressed election schedule. Sacramento County estimated its cost to be about $1.6 million.

Carl Burton

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