The Taxpayers League Annual Dinner has been set for April 24th at 6:00 p.m. at the Radisson Hotel. Cost for dinner will be $40 per individual.

The Annual Dinner is the only full Membership Meeting held during the year, and provides League Members the opportunity to gather to review events of the past year, and to honor those in the community whom have worked to protect the County’s taxpayers. And with the stunts the Governor and the Legislature are involved in, trying to develop a budget for this and next year, all taxpayers are at risk. Consequently, taxpayers are going to require extra effort from all taxpayer organizations in the state to defend them.

All Members should set aside the evening of April 24th to join with other Members to celebrate the League’s 42nd year of service to the community. To make a reservation, call the League office at 921-5991.

CITY OF SACRAMENTO UTILITY USER TAX REBATE PROGRAM

In October 2002, twelve days before the November 5th election, the City Council approved a Resolution expanding the City’s Utility User Tax rebate program to City residents that pay the taxes, whose yearly incomes are less than $25,000. The Resolution evolved from the Taxpayers League’s November 5, 2002 ballot Measure T, intended to reduce the City’s unfair UUT from 7.5% to 2.5%, and which called for the rebate to the City’s low-income people. It was obvious the City feared Measure T would pass, and approved the rebate Resolution to dampen Measure T’s attraction to low-income voters. As a result, although Measure T lost by just under 8% of the vote, the League won half of Measure T’s battle before the election even took place. To illustrate how fearful the City was of Measure T, its opponents raised $394,000 to defeat the Measure, double the money that has ever been raised for a Measure in the City’s history. The funny part is that during the campaign the City contended the League was a group of “outsiders” attempting to impose their will on the City, notwithstanding that the League’s offices have been in the City limits for 41 of its 42 years. Yet, a great number of major donors providing the $394,000, opposing the League’s Measure T, are not only from outside the City, but many are from outside the state. And we’d venture to guess that for some of them to find where Sacramento is, you’d have to send them a map of California, with the City circled in red.

Now the time has arrived to implement the low-income rebate. This confronted the City with problems that involve the means by which the program is broadcast to city residents; how to identify those in the City with incomes less than $25,000; the manner in which those eligible for rebates can apply for a refund; and how to verify the accuracy of the income and utility payment information provided by those who ask for a rebate. And to do this the City developed what seems to be a diabolical plan designed to assure that as few as possible of those eligible are offered a practical opportunity to get a return of the utility taxes they paid in 2002.

On February 13th staff presented the rebate procedure to the City Council, pointing out that there could be as many as 44,000 people eligible, and that the cost of finding them could be as much as $250,000 of $3.194 million for the program in the 2002 - 2003 budget. As proposed on February 13th, those seeking rebates must appear in person with supporting eligibility information, at one of six city locations, open one day each. Consider that the aggregate total number of hours proposed, i.e., 7 on March 3rd, 2 on March 5th, 3 on March 8th, 2 on March 10th, 4 on March 12th, and 7 on March 15th is only twenty-five for all processing centers. Twenty-five hours for 44,000 people! At the hearing League President Joe Sullivan complained the procedure is functionally deficient, and in a letter to the Council, stated the League recognizes the need for broadcasting the program, and its related cost. But the program seems driven by a desire to identify new beneficiaries in time to meet the existing application deadline of the third week of March for the seniors and disabled presently in the City’s rebate program, for calendar year 2003. Sullivan opposed the procedure in a letter to the Council, suggesting new beneficiaries can be paid later in the year than the targeted payment date in June. He pointed out that marshaling some 44,000 people seeking rebates, and to require them to personally appear with supporting information identifying them, and demonstrating their eligibility, at one of six different city locations, open only for one day each, is incredulous. Instead, he suggested that the mass mailer describing the rebate opportunity to be sent to all City residents could have, at its bottom, a form soliciting information from those who believe they qualify for the rebate. The form should ask for a copy of a SMUD bill, and a copy of a Form W-2 or Form 1099 with the Social Security number darkened. The form should also ask which of the four utilities, i.e., electricity, gas, telephone or cable TV they pay taxes on. The returned forms could then be used to establish a database and used for verification. This would completely eliminate the logistic nightmare of trying to get such a mass of people to appear at different locations throughout the city.

Instead of trying to use the mail, the City modified its procedure by adding three more City locations, and adding 4 days of open time overall for the three. The total time increase was 16 hours, making the grand total for the program 41 hours. The mailer is now on its way to all City residents.

The League’s prognosis has not changed. We believe processing 44,000 people plus handling others, including children, who may be accompanying them, in just 41 hours is a pipe dream. Be aware that if those eligible do not appear, they are out. The City’s letter to its residents clearly states, “Applications will not be accepted after March 15, 2003.” Any unused portion of the budgeted $3.194 million will stay in the General Fund, at the expense of those low-income people who paid the money, but did not appear in person. If such is the case, the City can use the money any way they please. They know that, and so do we. And if the rebate program proves, as we suspect, to be a farce, the League will consider moving again, in March 2004, to correct the program, and to reduce the 7.5% Utility User Tax, three times higher than anywhere else in the County, to 2.5% where it belongs. This regressive tax takes a disproportionate share of low-income taxpayer’s income, and for the City to continue to impose it on its citizens is reprehensible.

TWO-THIRDS VOTE TAXPAYER PROTECTION UNDER ATTACK

The Howard Jarvis Taxpayers Association, headed by its President Jonathan Coupal, one of the League’s two Vice Presidents, is heavily engaged in defending the two-thirds vote taxpayer protection established by Proposition 13, and affirmed by Proposition 218 (The Right to Vote on Taxes Act), both passed by large majorities of California voters. Under current law, a two-thirds vote is required for increases in several kinds of taxation, for issuance of bonds that must be repaid only by property owners, and for passage of certain kinds of new taxes. Presently attacking the two-thirds requirements are Assembly Constitutional Amendment (ACA) 4, lowering the passing standard for education parcel taxes (school districts, community college districts, and county offices of education) to 55%, and State Constitutional Amendment 2, lowering the passing standard for local transportation sales taxes to a simple majority. Recognize that any reduction in the two-thirds vote provision, established to protect taxpayers, could open the gates to higher taxes, including the unfair imposition of long-term bond debt, really a second mortgage burden on homeowners.

Another deadly attack ACA 1 is aimed at lowering the two-thirds protection for passing the state budget.

And yet another, as ominous as ACA 1 and ACA 4, is a provision of the California Education Master Plan that would allow property tax overrides that break through Proposition 13’s 1% cap on property tax increases.

We ask all League Members to be alert to these serious actions being taken by the Legislature. These acts will once again put Californians at risk of having to sell their homes, even when fully paid for, in order to pay skyrocketing property taxes. Remember Proposition 13 was a tax revolution against precisely the tax conditions that the Legislators are presently trying to press on the taxpayers once again. Contact your representatives, call, write, and tell them to resist these abusive proposals.

DIAPER TAX WRONG SOLUTION

State Senator Don Perata, D-Oakland, has rarely seen a problem that he couldn’t fix with a tax. Perata says disposable diapers are one of the most pervasive problems in California’s landfills. So Perata is introducing a bill in the Legislature that would impose a quarter-cent recycling tax — or fee, in our current political language — on disposable diapers. The fee on both child and adult diapers, which would cost young parents and other consumers about $15 to $20 a year, would be used for local communities to set up diaper recycling programs throughout the state. Perata says he believes the tax makes sense because it is aimed at users, not all consumers. He says his goal is not to get people to stop using disposable diapers, but to allow recycling programs to be set up.

State Sen. Tom McClintock, R-Thousand Oaks, says people already pay garbage fees. “This is adding a tax for the sake of a tax. It proves what I’ve been saying all along, that the Democrats want to tax the poop out of us.”

According to the U.S. Environmental Protection Agency, diapers can take up to 500 years to decompose. More than 20 billion diapers, about 3.3 million tons, were sent to landfills in 2000. Perata says these bottom wrappers are one reason the state is failing to meet its goal of recycling 50 percent of garbage. He also says by 2015, adult diapers will exceed child diapers in the landfill. Perata says a pilot program setting up a local diaper-recycling plan in Santa Clarita in Los Angeles County has been successful.

While we need to solve the problem of the growing number of disposable diapers, we should do it without the tax ... excuse us ... fee. While $15 to $20 seems like a small amount, young working families don’t need another cost added to their budgets. And neither do the elderly on fixed incomes.

We are for the concept of recycling, but a tax of this nature to finance it seems, at best, premature.

ASSEMBLYMAN STEINBERG, AGAIN

Last month’s Tax Fax presented an interesting twist to the Car Tax debate, introduced by local Democrat Assemblyman Darrel Steinberg who, in an attempt to preclude a Republican challenge to the Car Tax increase by putting it before the state voters by Referendum, proposed a change that, allegedly, would protect it from such a challenge. The Sacramento Bee reported that Steinberg proposed to freeze the Car Tax at the lower rate for vehicles purchased for less than $5,000, which makes a proposed bill a tax levy, which the California Constitution exempts from being put before voters in Referendums. This was a raw political maneuver to deny California taxpayers a possible opportunity to vote on an increase to the Car Tax.

Recollect that Steinberg was the author of Assembly Bill AB 680, which wanted to tinker with sales tax distribution in cites and counties in the local area, allegedly to try to end urban sprawl by dampening competition for sales tax generating auto malls and big box stores among cities and counties. The effort crashed, and AB 680 has gone into hiding. Assemblyman Steinberg seems obsessed with playing with the incomes of local communities, rather than concentrating on cutting state spending, and devising a way to making the state live within its means.

Now he’s back again. Still muddling with control of local money. This time he’s pushing Assembly Bill AB 1221, the son of AB 680, except that it’s statewide, with a different twist. The intent is the same as AB 680 i.e., to remove the incentive (sales taxes) to go after retail projects rather than housing construction (property taxes). Now instead of sharing sales money among communities, he wants to cut the amount of sales tax money the state gives to cities and counties by half, replacing it, allegedly with property taxes, apparently in the belief that property taxes are a more stable (steady) income for local governments. He seems to have forgotten that local property taxes are indiscriminately gobbled up by the state every time it is in a pinch. The locals have yet to recover from the Governor Wilson’s pirating in the 1990s of over $3.4 billion of local property tax income to cover a potential reduction in school funding from the state General Fund. He established the Educational Revenue Augmentation Fund (ERAF), and the state, even when awash with money, never has stopped pulling about $3 billion a year from local property taxes for ERAF. Giving up sales tax money puts local governments on a slippery slope. If Steinberg wants to be a real hero, he can pick up the reigns that fell from Mayor Joe Serna’s hands when he died, and sponsor an Assembly Constitutional Amendment that would put all property taxes under local control.

SACRAMENTO TRANSPORTATION AND AIR QUALITY COLLABORATIVE REPORT

The Governor’s budget proposes a $1.7 billion shift from the Transportation Congestion Relief Fund (TCRP) and Transportation Investment Fund (TIF), to the General Fund. The TCRP was first proposed by Governor Davis in 2000, with new money for transportation projects, circumventing the California Transportation Commission system by substituting the Governor’s priorities for more deliberative decision-making under the State Transportation Improvement Program (STIP). The Legislative Analyst’s Office’s (LOA) analysis finds that this shift would leave no funding for TCRP projects in 2003-2004, and leave merely $300 million in TCRP for current year expenditures that have already occurred. Furthermore, the LAO suggests that this will contribute to the deficit because TCRP projects will continue to incur expenditures in the budget year unless outstanding contracts are terminated. The analysis indicates that the shift in these funds will ultimately create uncertainty about the eventual fate of badly needed traffic relief projects.

WILLIAMSON ACT

The Governor proposes to permanently eliminate Williamson Act subvention funds to local governments, effectively eliminating a valuable tool that assists rural communities. According to the Legislative Analyst, the

elimination of this subvention would result in immediate uncompensated tax losses. This reduction will result in pressure on counties to eliminate support for this program that aids family farms and reduces the conversion of prime agricultural land to commercial development.

RECALL OF GOVERNOR DAVIS

Ted Costa, Chief Executive Officer of the People’s Advocate, is leading the campaign to recall Governor Davis. A Proposition to do this would require 897,158 signatures statewide. The People’s Advocate filed a Notice of Intention to Recall on February 5th. The Governor responded. A Coalition formed in support of the recall, and on February 24th submitted the proposed format for the signature gathering petition to the Secretary of State for approval. The petition is now under review. If the petition is approved, and the signatures are gathered and certified, within 80 days the Lieutenant Governor must schedule an election. At least 59 days before the election, candidates interested in appearing on the ballot for Governor must file their applications. The one garnering the most votes of those whose names on the ballot would be the next Governor of the State of California. The recall was discussed by the Taxpayers League Board of Directors, which took no position on the recall effort.

MEMBERSHIP

Our Members constitute the League’s strength and Members provide coverage on many issues we try to resolve.

Over 120 taxing and rate based agencies in Sacramento County and its six Cities handle billions of taxpayers’ dollars yearly. The League’s constant surveillance of their activities has been our mission for 42 years. We have been successful in rooting out many illegal uses of taxpayers’ money, and have defeated the last three attempts to raise sales taxes in the city and county of Sacramento. The last alone has kept $150 million in the pockets of taxpayers over the last five years. It is estimated that our work during the past two years offset $30 million in rate costs alone for County and Cities services. We encourage all readers of the Tax Fax, who are not Members to join our League, and help us continue to serve the interests of the taxpayers of Sacramento County.

LETTERS TO THE LEAGUE

We seek “Letters to the League” from members on present projects and issues on which we are working, and 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 fax number is (916) 921-5991, and our address is:
Sacramento County Taxpayers League
1832 Tribute Road, #210
Sacramento, CA 95815.

THREAT OF DAVIS RECALL

I think having the threat of recall will cause Governor Davis to force the Legislature to make real cuts in spending without again raising our already high taxes.

I also think Mr. Davis will force the Legislature to repeal the wild and costly workers’ compensation rate of last year that, when fully implemented in 2006, will give workers’ compensation claimants earning $65,000 or less their entire salary tax-free, all at the employers’ expense.

Repeal of this workers’ compensation giveaway will provide some impetus for reversing those job killer lawyer-friendly laws Mr. Davis signed, such as the amendments to the Civil Code which extended the statute of limitations on personal injury lawsuits from one year to two.

The recall effort will help the Legislature and Mr. Davis concentrate their minds on cutting the fat out of the state budget and to abandon their proposed new taxes on Internet sales and their higher personal and sales taxes.

Carl Burton

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