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Perspective : August 2005

ASSOCIATION CONSIDERS "THE SON OF MEASURE T", A REPEAT BALLOT MEASURE TO CUT SACRAMENTO CITY'S UTILITY TAX FROM 7.5% TO 2.5% OVER FIVE YEARS At its July 21st meeting the Taxpayers League Board of Directors agreed to reconsider its failed 2002 effort to reduce the City of Sacramento Utility Users Tax (UUT) on electricity, gas, telephone, and cable television, and to rebate UUT taxes to all those paying the tax whose income is less than $25,000. During the campaign, to offset the popularity of the League's rebate in the 2002 ballot Measure T, the City passed the rebate provision of Measure T by City Resolution, 13 days before the election. So we won half the battle before the election ever took place. The new League Measure WILL NOT REPEAL THE UTILITY USERS TAX. It will however REDUCE the tax over a five-year period to two and one-half percent, a level considered affordable to citizens and businesses throughout the County, and will codify the rebate. A City Resolution can be altered by the City Council at any time, whereas if the rebate is made part of an approved Measure it becomes law, and can only be changed by a vote of the people. The Board's purpose is to determine whether a ballot Measure the same as Measure T should be prepared for the 2006 elections. The Board reflected that the City UUT is still THREE TIMES HIGHER than anywhere else in the County of Sacramento, whereas surrounding cities such as Davis, Folsom, Rocklin, Galt, Isleton, and West Sacramento LEVY NO UTILITY TAX AT ALL! This assuredly makes the City UUT inequitable, and unfair to its citizens. Every time a utility rate is increased, a piggy-back tax increase occurs. As a basic premise, the League opposes utility taxes. They are regressive. They tax necessities, taking a disproportionately higher percentage of low-income wage earners money than from those more fortunate in the community. The California State Legislature HAS TWICE TURNED DOWN SUCH A TAX AS INAPPROPRIATE, notwithstanding budget shortfalls over the years. They, as we do, reason utilities are necessities, consistent with exemption of food and medicine from the state sales tax. Therefore, there should not be EXCESSIVE taxes on utilities, which are also essential. During the Measure T campaign in November 2002 The Sacramento Bee in an editorial stated it best when they wrote, "IT'S AN UNDESIREABLE WAY TO FINANCE CITY OPERATIONS." So check your walking shoes, because we may be on the street gathering City of Sacramento signatures again, and soon HEY CITY PEOPLE, THE CITY OF SACRAMENTO HAS MONEY FOR YOU! By Joe Sullivan The 2002 the Taxpayers League attempt to reduce the City of Sacramento's Utility Users Tax (UUT) resulted in expansion of the city's UUT rebate to seniors and disabled rate-payers with annual incomes of less than $25,000, to all low-income rate-payers with annual incomes less than $25,000. On February 13, 2003 the Sacramento city staff presented the rebate procedure to the City Council, pointing out that finding the 44,000 people eligible could cost as much as $250,000 of the $3.194 million put in the 2002-2003 budget for the program. The staff proposed those seeking rebates had to appear in person, with supporting eligibility information, at one of six city locations open one day each. The sum total number of hours proposed for all processing centers combined was 25 for 44,000 people! At the hearing I told the Council the procedure was deficient, and then sent a League letter stating the program seemed driven by a desire to identify new beneficiaries by the existing application filing deadline of the third week in March (with payment in June), established for seniors and the disabled. Recommended was that new beneficiaries be identified and paid later in the year. Also recommended was that the mass mailer describing the rebate opportunity to be sent to all city residents have a form soliciting information from those who believe they qualified for the rebate in lieu of asking a mass of people to appear at different locations throughout the city. Instead, the city added three more locations and added 4 days of open time for the three, and raised the grand total time to 41 hours. During the sign-up process, I was at all processing centers except one. The result at each was virtually the same. The first two, oddly, had 79 adults in line when the doors opened. All people were not individual rebate seekers. Many were husbands and wives, and sadly, the first day the line had 4 people in wheel chairs accompanied by helpers and one woman using a walker. At all rebate centers the majority of the people appeared to be age 50 or more; every line had some in wheel chairs; and there were relatively few young people. When the last center closed the final official city count for all centers was 2213 eligible for year 2002 rebates, only 5% of the estimated 44,000 eligible. The process was a debacle. Embarrassed, the City extended the sign-up period until September 2003, but only received 400 more applications. The program to reach the City's estimate of 44,000 eligible taxpayers had failed. The Taxpayers League recommended that for recovery of 2003 taxes during 2004, the City work with the Sacramento Municipal Utility District (SMUD) to use SMUD's low-income data base to identify those who may be eligible. The City began working with SMUD. In 2004, the rebates of 2003 taxes raised to 6,601 recipients. Working along the same lines, the 2005 tax rebate count this year disappointingly fell to 5,769. The city continued working with SMUD, and reached an agreement that beginning next September a joint program would be used in 2006 utilizing SMUD's present identification of about 16,000 already qualified customers as low income rate-payers. This should make a quantum jump in the number of UUT payers getting at least the minimum rebate of $56 a year, or more next year. And to further improve the program, the city is also working with Pacific Gas and Electric for their help in identifying people eligible for the UUT rebate. Notwithstanding a poor beginning, the city has intensified its efforts to make the rebate program more successful. But the missing link is communication with the general public, and a problem of identifying qualified people who pay their utility bills as part of their rent in individual and multi-family rental facilities. There are over 38,000 City residents who are potentially eligible for a rebate, but are unidentified. The rebate program remains a failure. 2005-2006 COUNTY PROPERTY ASSESSMENT ROLL COMPLETED County Assessor Ken Stieger announced that the 2005-2006 Assessment Roll was completed on July 1st and that the total assessed value of the combined Secured and Unsecured Tax Rolls in the County is $106,152,797,789 (net of exemptions). The new total represents an increase of about $13.718 billion over the 2004-2005 Assessment Roll, or an increase of about 14.84 percent in total value. Growth in property taxes reflect increases of property developed, along with an upturn on the real estate market over the last seven years. It was reported the 14.84 percent increase this year is the largest growth rate increase since Proposition 13 was enacted in 1978. Assessor Stieger wrote that the completion of the 2005-2006 roll was accomplished due to the dedication and hard work of his staff that in addition to completing this roll, serviced approximately 100,000 customers last year. REDISTRICTING PROPOSITION 77 STUMBLES Of the Propositions that were on Governor Schwarzenegger's agenda for change as a result of November's Special Election, one of the most important was Proposition 77, designed to change the way political district boundaries are drawn in the state. In 2001, after the year 2000 census, when the districts were drawn by the Legislature, they were gerrymandered such that all districts were made "safe" for the incumbents, be they Democrat or Republican. The proof of this action was clearly shown when in the ensuing General Elections not a single incumbent Legislator, who ran for re-election, lost his or her seat. Proposition 77, designed to take the job of drawing political boundaries away from the Legislature and assign the task to a panel of three retired judges, was qualified by Ted Costa of the People's Advocate, and endorsed by the Governor. On the surface it seemed to be a shoe-in for passage. But there was a bump in the road On July 8th Attorney General Bill Lockyer filed a lawsuit to remove Proposition 77 from the November 8th ballot. It was found that the Proposition supporters "Fair Districts Now", had erroneously submitted a different version to the Attorney General's office for a title and summary, than the one that it had circulated for signatures and qualified for the ballot. Examination of the two documents indicate that the differences are minor, but there is no argument that they are not the same. The error seems to have been that the wrong document had been sent to the printers. Notwithstanding the difference, Secretary of State Bruce McPherson stated he had a "constitutional duty to present to the voters of California the measures that have qualified to appear on the ballot by the signatures of the people." Superior Court Judge Gail Ohanesian ruled that Proposition 77 should be removed from the ballot. But under appeal, the decision was temporarily stayed on July 25th by the 3rd District Court of Appeal, pending a hearing before making a final decision. The future of Proposition 77 is in limbo. If the court decides to remove the Proposition from the ballot, there are already rumblings that supporters may repeat the entire process in 2006 to get it done. PG&E DISCRIMINATES AGAINST SMUD CUSTOMERS By Director Jay O'Brien I use gas only for heating. During the four months or more of summer, I close the gas valve and use no gas. In the past, PG&E would tell me that my gas bill for those months was zero. PG&E managed to get a new tariff enacted, effective July 1, 2005. PG&E is now charging me $3.25 per month as a "minimum transportation charge", even if I use no gas. The new tariff was enacted lawfully, but PG&E is selectively imposing it on seasonal gas customers, like me. I called PG&E to inquire about the new charge. I was told that if I were also a PG&E electric customer, they would "close" my gas account, stopping the $3.25/month. Then when I wanted to use gas again after the summer, they would enable the gas part of my account. Simple for them to do, and no charge to me. However, as I do not use PG&E electricity, if they close the gas account, after 30days the account would be deleted. I would then have to re-qualify as a customer, providing PG&E permission to do a credit check. I would then have to go through the hassle of re-establishing my automatic debit arrangement with my bank that allows PG&E to automatically obtain payment from my bank account. I feel that if PG&E will keep the gas account open beyond the 30 days for the electric customers, allowing them to avoid the transportation charge, they should do the same for me. It is worth $3.25 per month to me to me to avoid the credit check and bank issue. However, if the ability to suspend the $3.25 is available to the PG&E customers, it should be available to me. I have mailed a complaint to the CPUC. Check your PG&E bill! SACRAMENTO CITY UNIFIED SCHOOL DISTRICT CONSIDERS USING NON-COMPETITIVE CONSTRUCTION CONTRACTS The Sacramento Bee reported the City Unified School District is struggling with an issue as to whether a labor accord known as a "project stabilization agreement" should be established which "would limit the kinds of contractors who can work on large construction projects in the school district, requiring that union workers be hired or union-like conditions be provided." This would make such contracts non-competitive. Fortunately, The Bee advised "the bond oversight committee, charged with monitoring how the district spends voter-approved bond money, strongly opposes the agreement--" "At stake is $191 million in construction money that remains from bond measures voters passed in 1999 and 2002, when they agreed to raise their property taxes so that the district could build new schools and upgrade existing campuses." The school board voted 5-1 to begin preparing a labor agreement, and hiring a consultant to study its impact. The Association's Vice President Jonathan Coupal, speaking as President of the Howard Jarvis Taxpayers Association, opposed the proposed labor agreement, believing it to be a material breach of the agreement made with the voters by putting Measures I and E on the ballot. From the League's standpoint, Secretary Joe Sullivan, expressed agreement with Coupal, citing experience as Deputy Director of the Directorate of Competition Advocacy at McClellan AFB. Joe was selected as principal civilian at McClellan to form a Directorate to overcome non-competitive features in government contracting that was part of the rampant Department of Defense over-priced non-competitive contracting scandals in the 1970s and '80s. Joe says "keep you hand on your wallet, 'cause its d'eja' vu all over again." LETTERS TO THE ASSOCIATION 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 Taxpayers Association. Our e-mail is info@sactax.org; our telephone number is (916) 921-5991. Our fax number is (916) 567-1279. And our address is: Sacramento Taxpayers Association 1804 Tribute Road, Suite 207 Sacramento, CA 95815. EXECUTIVE DIRECTOR'S MESSAGE UNION BACKLASH (The following is extracted from Bill Leonard, who is a member of the State Board of Equalization. I couldn't have said it better myself, so I didn't. It's a great illustration that in government, it is too easy to jump to conclusions-and that in wise government, principal must rule over circumstantial self-interest.) The Los Angeles Times reports that union bosses are firing back at the Paycheck Protection Initiative (Proposition 75) by proposing an initiative to bar corporations from spending on election campaigns without shareholder approval. Proposition 75 would simply require public employee unions to obtain permission from their members before taking money out of their paychecks to spend on political campaigns. The unions argue "what's good for the goose is good for the gander," and they may have a point. Perhaps shareholders should be given the right to decide whether corporation funds should be spent on political candidates and campaigns. Just as it is fundamentally unfair to force union members to fund campaigns to which they are opposed, it also seems unfair to force corporate investors to fund campaigns against their will. In our American scheme of campaign financing, it makes sense to expect campaigns to eaise money from people who agree with them; coerced money is tyrannical and unnecessary. Of course, some will argue this reform will hurt Republicans. The unions seem to think so, but they are wrong. Despite the long-standing myth that corporate campaign spending favor Republican candidates, the opposite is true. Like most other campaign donors, corporations seek to influence those in power. In California, the people in power are mostly Democrats, so they receive the lion's share of the donations. This has been true for generations, but the perception has not caught up with reality. Regardless of who might benefit from this proposed reform, it merits a healthy discussion that we should all welcome. Our political campaigns should not rely on coerced contributions and unwilling donors. Bruce Lee Executive Director

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