THE BUDGET ACCOUNTABILITY ACT INITIATIVE
There is little doubt that the Budget Accountability
Act Initiative will be on the March 2004 ballot. The proponents for the
Measure have collected over one million signatures against a 600,000-signature
requirement for qualification. The Act is a constitutional amendment that
would lower the legislative threshold for passing a budget from a supermajority
(66.6%) to 55%, and in addition, cause the governor and legislators to
forfeit pay and living expenses for every day they exceed the states
June 15th budget deadline. The Act exempts property taxes, but would lower
the number of votes needed to raise sales, tobacco, gasoline, income and
other taxes. The measure would make it easier for the Legislature to pass
a budget and in the course of doing so raise taxes. Opponents to the measure
have termed the Act the Blank Check Initiative. 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 Board voted
to oppose the Budget Accountability Act at its August 21st Board Meeting,
and will join the coalition, Californians Against Higher Taxes/No on the
Blank Check Initiative who will fight the change to the States Constitution.
If this Act qualifies for the March ballot
it is anticipated it will encounter a legal challenge. It emulates Proposition
24, the Legislators Compensation, Reapportionment Act of 2000, which
proposed to take control of redistricting of political election boundaries
after each 10-year census from the Legislature, and give the responsibility
to the Supreme Court. Proposition 24 also reduced Legislators salaries
from $100,000 per year to $70,000 and their per diem from $122 per day
to $75. Based on having two sections of an Initiative dedicated to two
different issues, the California Supreme Court ruled Proposition 24 was
unconstitutional as it violated the single-subject provision
of the State Constitution, and would not permit the Act to go on the ballot.
MEASURE A - THE TRANSPORTATION SALES TAX
Measure A, which in 1988 added a half-cent
tariff as part of the Countys present 7.5% sales tax, was aimed
at supplementing county, cities, and the transportation agencys
funding for transportation projects. It is due to expire at the beginning
of 2009. Local officials intend to ask voters to extend Measure A, hopefully
in a ballot Measure in November of 2004, well before the 2009 expiration
date. The Associations Board, consistent with its original position to
support Measure A in 1988, voted to support the new Measure, trusting
voters will recognize the importance of continuing improvement and expansion
of transportation capabilities, and will extend the tax. However, the
Leagues support carries the caveat that the tariff be no more than
a half-cent, and that other terms involving distribution of the money
not be altered. 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.
SPLIT ROLL, SB 17 AND ACA 16, ATTACK PROPOSITION
The California Taxpayers Association has
pointed to these proposals in the Senate and Assembly as precursors to
attempts to require commercial property to be assessed at current value
more frequently than residences. With regard to Senates SB 17, Daniel
Weintraub of The Sacramento Bee wrote that the bill is likely to become
a vehicle to split the property tax roll by altering change-of-ownership
rules to trigger more frequent assessments of commercial property.
ACA 16 takes almost the same tack to split
the roll. It requires businesses to be reassessed to current market value
when more than half the company changes ownership.
The California Taxpayers Association also
states that backers of these actions contend that the change-of-ownership
definition for business property reassessment to current market value,
without altering the Proposition 13 tax rate of 2 percent, can be done
by majority votes of the Assembly and Senate, and increase property tax
revenue by $3 million or more a year. Opponents say that this is an end-run
around Proposition 13, and that owners of commercial property are paying
taxes based on assessments closer to market value than other property.
SACRAMENTO CITY COUNCIL CONSIDERS USING
PUBLIC MONEY FOR THEIR CAMPAIGNS
In 1998 - 1999 a City of Sacramento Campaign
Finance Committee developed recommendations on campaign financing limits
for City Council and Mayoral electoral races, use of public money to partially
fund the campaigns, and not to submit the plan to a public vote. The Associationimmediately sent the City a letter opposing the use of public money for
political campaigns, and opposing the recommendation not to submit the
use of public money to a vote. In December 1999 the City put off any decision
on the Committee recommendations, instructing its staff to write a campaign
fund limits law and a discussion on public financing. In May 2000, staff
took a first cut at limits and recommended against public financing. We
wrote and expressed pleasure at the recommendation against public financing,
and for the third time expressed opposition to any recommendation made
to use public money in political campaigns without a vote.
In November 2000, the City approved an Ordinance
limiting campaign contributions for City Council and Mayoral candidates.
Public financing was discussed, but was left unresolved. Again, the League
registered its objection to public financing.
In April 2002 the Committee presented another
plan for public financing, and recommended it be put to a vote on the
November ballot, and that the money, about $200,000, come from a source
other than the General Fund.
However, as the Taxpayers League had Measure
T on the November ballot to reduce the City Utility User Tax, the City
Council directed staff to bring back the public financing item after the
November election, in order to assess the Citys financial condition.
They also instructed the staff to propose a mechanism that would trigger
public financing of campaigns.
On June 5th of this year, staff presented
its recommendation for triggering public financing during budget hearings.
If the triggers are met, the Council would consider appropriating funding
to a Public Financing Fund as part of their budget deliberations. The
discussion is to take place on September 9th. Although the League has
not seen the detail, we assume the City has abandoned any consideration
of putting public financing to the vote as staff had already been instructed
to begin preparing for election of Council Members in March 2004, and
to plan on having about $300,000 in public money to partially fund campaigns.
You can bet the League will be at that September
9th City Council meeting.
The so-called Living Wage, in
the form of a City of Sacramento Ordinance, is rearing its ugly head again.
Its one of those terrible sounds right efforts that
invariably is put into place by elected officials, or by external efforts
in the form of Propositions or local Measures, and then blows up in the
face of those believing they had done the right thing. Californians
seem to want everything they can get from government, but only if it is
virtually without cost to themselves. The Sacramento Bee August 9th article,
Living wage favored in new poll demonstrated the dichotomy.
It asserted that a Field Poll showed Californians strongly back
the idea of boosting the earnings of lower-paid workers on government-financed
projects, and within two sentences wrote, Support dropped
substantially, however, when people were asked if they would be willing
to pay an extra $40 to $50 in taxes per household every year to finance
the living wage. The key words in those two sentences are government
financed projects which in real terms means subsidized by
the taxpayers. And when put in the terms of are you willing
to pay by agreeing to raise your taxes? the enthusiasm quickly wanes.
Lets take a good look at what The Living
Wage really involves. The concept is that contractors who receive public
funds for services will be required to pay wages above the minimum. Ordinances
that implement the Living Wage cover contracts to private firms that provide
services to the public and to a city government. In addition, they cover
licensees of city property that perform propriety interests of the city
government, and those businesses and individuals that receive subsidies
that enhance economic development. In simple terms anything touched by
city money or gratuities. It requires that both permanent and temporary
employees be paid a minimum of $10 per hour if health benefits are
provided, or $12.84 per hour if they are not. It also requires written
agreements between an Employer and Labor Organization regarding representation
of employees; dispute requiring binding arbitration, and a myriad of other
things like contracting out city services that result in displacement
of city employees, seniority rights when reducing employees, automatic
retention rights for displaced employees, etc.
City employees and union employees are exempt,
which will raise an equity issue in labor negotiations.
Opponents argue that more than three-fourths
of the nations labor economists believe the Living Wage is an ineffective
and inefficient way to help the working poor. They point out that the
total cost to the City and employers is $8.7 million per year, and another
$5 million to the City if they apply Living Wage to their own employees.
If one looks at Living Wage dispassionately,
it is not just about wages. It has a definite union stance as is demonstrated
above. Its backers are the Sacramento Central Labor Council, and a national
social equity group called ACORN, the Association of Community Organizions
for Reform. This was pointed out by the Sacramento Metropolitan Chamber
of Commerce, in an article by Dave Butler, its Senior Vice President,
titled Living Wage?, which appeared in the May 2003 issue
of Inside the City. The Chamber opposes Living Wage, and also pointed
out that the California Federation of Labor supports Living Wage Ordinances
because it reverses the tide of privatization. More than two
years ago, the first two groups approached Councilman Dave Jones, who,
evidently on their behalf, introduced the Living Wage Ordinance to the
Dave Butler wrote that The Metro Chamber,
working with the Sacramento County Office of Human Assistance and Area
Congregations, developed a program, Direct Contact, as a counter to Living
Wage. Direct Contact would connect lower-income workers, via employers,
with undersubscribed federal and state programs that support work and
increase workers net earnings. These programs include earned income
tax credit, health insurance, transportation assistance, food assistance
and job training. He also wrote that The Sacramento Bees columnist
Mark Paul supports the Metro Chambers position, and in a March 9
op-ed piece Paul wrote that the economic multiplier effect
used by experts to predict the net economic benefit of public policy decisions
does not support a mandated living wage for low-income workers since it
results in a net loss of dollars in the local economy.
The Associationhas opposed the Living Wage concept
from the outset, and believes that if the City wants to foster a Living
Wage Ordinance, it should follow the lead of its author, Councilman Dave
Jones, and submit the concept to the voters.
VEHICLE LICENSE FEE (VLF) - THE CAR TAX
The most discussed aspect of the 2003-2004
budget is the Car Tax, its effect on the car owning individual in the
state, and the use of the estimated $4 billion in taxes to be collected
in the next year. The budget calls for the tax to increase from its present
rate of 0.65% to 2% in October. The State Legislative Analysts Office
writes that as a component of VLF reductions enacted in 1998, law provides
that the state backfill (and thus make local governments whole)
the difference between the lower VLF rate and the 2% rate, unless the
state has insufficient moneys with which to make such payments.
In June, the Department of Finance made a determination that the state
had insufficient moneys to make such payments to local governments and
as a result the backfill ended, and the VLF will return to the 2 percent
level in October.
During the 90-day period between when the
General Fund backfill ended and the VLF rate will increase, local governments
will only receive revenues based on the 0.65 % VLF rate with no General
Fund backfill. The loss in government revenue due to the lag time between
the elimination of the backfill, and the increase in the VLF, is approximately
$825 million. The budget calls for these revenues to be repaid by the
state by August 2006.
Currently, approximately one-quarter of the
VLF revenue is restricted to funding realignment programs
and three-quarters is sent to local governments as general-purpose moneys.
Under the budget plan, the percentage of these revenues restricted to
realignment programs will increase during 2003-2004 such that the realignment
programs will be held harmless. As a result of this shift, city and county
budgets will bear the entire $825 million loss.
THE DOWNTOWN ARENA - AGAIN!
The Associationoffice received a call from the
Sacramento News and Review (SN&R), subject - the Downtown Arena. Reporter
Jeff Kearns was looking for the Leagues position, and he was told
that we will oppose the Arena if there is any attempt to use public money
in its financing. Jeff wrote an excellent, well researched, major article
about the background of the Arena, and the current status of the City
of Sacramentos mores in the August
28, 2003 issue. We recommend all Members of the League either get
a copy of the paper, or call it up on the SN&R website www.newsreview.com.
The article begins on page 24, and is titled: They play, you pay.
The cap asks: Why is it taking so long to produce a feasibility
study for the new Kings arena? Because the city is trying to figure out
how to stick the public with most of the bill. And the Maloofs remain
Our Members constitute the Leagues
strength, and we need our Members to recruit others to enlarge our base.
Taxpayers are about to 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 Members 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, and to donate
money to the General or Defense Fund if possible.
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 email@example.com;
our telephone and fax number is (916) 921-5991; and our address is:
Sacramento Taxpayers Association
1832 Tribute Road
Sacramento, CA 95815
PROP. 50 SHOULDNT SUPPORT THE STATE
Proposition 50, passed last November, cost
$3.44 billion, and is the largest water bond in California state history.
It also was the first time a water bond issue was placed on the ballot
by using the petition process. All previous water bonds had been placed
on the ballot by the Legislature.
The voters of California were told by the
California League of Women Voters, and the National Audubon Society, that
a YES ON Proposition 50 would PROTECT CALIFORNIAS FUTURE, saying
in their ballot argument that Californias future depends on
investment in water supply and security, water quality and safe drinking
water projects, and on protecting our rivers, lakes, bays and coastal
waters from contamination. Proposition 50 provides the funds that local
water districts need to serve Californias growing population.
Ted Costa of Peoples Advocate pointed
out in his November opposing ballot argument that the construction of
dams and reservoirs in California is at a virtual standstill and has been
for many years. Mr. Costa stated, We are fast approaching a big
water shortage crisis in California, the likes of which we have never
seen before, and Proposition 50 provides virtually no money to alleviate
that crisis. Mr. Costa argued that California needs new dams on
the American River at Auburn and on the upper San Joaquin River at Friant.
We also need to build the Sites Reservoir in Colusa County, and the Los
Banos Grande Reservoir in Merced County, said Mr. Costa. Both of these
reservoirs will store an additional 6 million-acre feet of new water,
providing drought protection, and also will accommodate the new construction
of the last 30 years.
Proposition 50 did nothing to start, or plan
for completion, any of the projects listed above. Those who opposed Proposition
50 should have added that it was too easy to circumvent. The undoing began
in January 2003, when Governor Gray Davis, looking for ways to close the
states $38 billion budget deficit, cast a covetous eye toward voter-approved
bonds. The circumvention worked. As the San Francisco Chronicle recently
reported, The budget finally adopted calls for spending $1.1 billion
in Proposition 50 money on such items as paying state employees
salaries previously borne by the general fund.
When the Sacramento Taxpayers Association
opposed Proposition 50 last fall, we said it would actually cost the taxpayers
$6.9 billion over 30 years, and we dont believe that kind of expense
is justified. We oppose using Proposition 50 money to pay current budget
expenses in order to sweep Californias massive budget problem under
the rug. Such use of water bond money is inexcusable.
DUPLICATION AND OVERLAP OF CALIFORNIA
NOTE: Extracted From Member Charles
Smithers Letter to Arnold Schwarzenegger, Candidate for State Governor
August 22, 2003
During 1969 - 70, the issue of duplication
and overlap of governmental function was presented to Governor Ronald
Reagan who was seeking an issue to put before the electorate during the
fall campaign. He enthusiastically presented a brief outline of the issue
to the California Chamber of Commerce. It received a warm response and
a task force was formed including the California Taxpayers Association,
representatives of business and industry, and the Governors Office.
I was a California Taxpayers Association representative. Among those participating
was Ronald A. Zumbrun appointed by Governor Reagan. It became apparent
that the issue was too complex to address in a short time frame, and the
welfare reform of the early 1970s then became the focus of the Administrations
attention. Mr. Zumbrun went on to serve Governor Reagan as Deputy Director-Legal
Affairs for the California Department of Social Welfare responsible for
the legal aspects of the highly successful welfare reform effort. In 1973
Mr. Zumbrun co-founded the Pacific Legal Foundation (PLF), serving as
President and Chief Executive Officer until 1995.
In essence, duplication and overlap in government
seems overlooked entirely when considering cost saving possibilities that
can result from functional consolidations. To begin, in addition to the
State Government with its myriad of agencies, departments, boards and
commissions, the State has 58 County Governments, over 400 Cities, 1200
School and Community College Districts, and over 4800 Special Districts.
The latter include Air Pollution Control Districts, Sanitation Districts,
Water Quality Control Districts, Joint Powers Agencies and a myriad of
other governmental agencies all with separate boards and commissions.
Independent districts have separate boards of directors, elected by district
voters. Independent districts also include districts where appointed boards
of directors serve for fixed terms. Cemetery districts are independent
districts within this governance structure. Special districts governing
boards vary with the size and nature of the district. Most districts have
5 member governing boards. Other boards range from 3 to 11 members. The
Metropolitan Water District of Southern California has 37 board members.
Dependent districts are governed by legislative
bodies, either a city council, or county board of supervisors. All County
Service Areas are dependent districts governed by county boards of supervisors.
Dependent districts include the Yucca Valley Recreation and Park District,
governed by the San Bernardino county Board of Supervisors, and the Oceanside
Small Craft Harbor District, run by the Oceanside City Council.
Enterprise districts render services run
like a business enterprise. They provide services used by individual customers.
For example, hospital districts charge room fees paid by patients, not
other residents of the district. Virtually all water, waste, and hospital
districts are enterprise districts.
Non-enterprise districts provide services
that dont lend themselves to fees. Activities such as fire protection
and mosquito abatement benefit the entire community, not just individual
citizens. No direct cost/benefit relationship exists in the services provided
by a non-enterprise district. Consequently, non-enterprise districts generally
cannot charge user fees for their services and rely overwhelmingly on
property taxes for their operational expenses. Services usually provided
by non-enterprise districts include fire protection, cemeteries, libraries,
and police protection. Though non-enterprise districts rely primarily
on non-fee revenue, certain services, such as a park districts pool,
can generate a small amount of revenue.
Some governmental functions are assigned
to the State, Cities or Counties, but virtually every function is performed
in what has become a costly and confusing duplication and overlap of service.
As an example, School Districts provide their own policing of schools
and school grounds, sometimes using off-duty police. They have no jurisdiction
elsewhere. Cities provide police services only in their jurisdiction.
They cannot function in the County or on the freeway while driving to
and from work. Similarly, Counties cannot function in the city or on the
Freeway despite the use of city streets and state highways. And the State
Highway Patrol protects the State Capitol and some State Buildings, and
patrols the State Highway system, but has limited jurisdiction in city
or county areas. Most special districts have police powers. Nearly all
State agencies, such as the Departments of Forestry and Corrections have
An example of the policing powers of various
state employees is the following partial list of job classifications entitled
to safety membership in the California Public Employees Retirement
system and enhanced pay:
Class Code Classification Department
- 8330 Aircraft Pilot Justice, Department
- 8997 Arson and Bomb Investigator Fire
- 9027 Assistant Chief, Food and Drug Section
- 8609 Chief, Bureau of Insurance, Insurance
Fraudulent Claims, Department of Insurance
- 8610 Chief, Division of Consumer Affairs,
Investigations, Department of Consumer Affairs
- 8988 Chief Firefighter/Security Guard,
- 9030 Chief, Food and Drug Health Services
- 8613 Chief, Investigation Services Health
Services Bureau, Department of Health
- 1986 Chief Museum Security Officer, Museum
of Science and Industry
- 8673 Deputy Division Chief, Alcoholic
- 8677 District Administrator, Alcoholic
- 8990 Firefighter/Security Guard Veterans
- 8966 Division Chief, Fire Marshal California
State Fire Marshal
- 9090 Fire Service Training Fire Marshal
- 9091 Fire Service Training Fire Marshal
- 9028 Food and Drug Coordinator Health
- 9029 Food and Drug Administrator Health
- 9042 Food and Drug Health Services Specialist
- 9039 Food and Drug Health Services Specialist
- 9036 Food and Drug Health Services Specialist
- 9043 Food and Drug Health Services Trainee
- 9007 Food Technology Health Services Specialist
- 1937 Hospital Peace Officer I Developmental
Services, Mental Health, Consumer Affairs
- 1936 Hospital Peace Officer II Developmental
Services, Mental Health, Consumer Affairs
- 1935 Hospital Peace Officer III Developmental
Services, Mental Health
- 1992 Museum Security Officer Museum of
Science and Industry
- 0891 Park Safety and Enforcement Supervisor,
Parks and Recreation
- 0890 Park Safety and Enforcement Specialist,
Parks and Recreation
- 8358 State Security Officer General Services
- 8999 Chief Arson and Bomb Investigator
- 8989 Supervising Firefighter/Security
Guard Veterans Affairs
- 1988 Supervising Museum Security Officer
Museum of Science and Industry
- 8678 Supervising Special Investigator
Alcoholic Beverage Control
This is but a partial list found in CALIFORNIA
CODES GOVERNMENT CODE SECTIONS 20390-20416 at http://www.leginfo.ca.gov/calaw.html
- check Government Code search for Safety Member.
Similarly, most State functions have their
counterparts in local governments, in either Counties (58), Cities (479)
Chartered cities 107 (84 in 1989), general law cities 371 (379 in 1989),
and Special Districts, or all three.
The State Controllers Special
Districts Annual Report for the fiscal year ended June 30, 1996,
the latest year available, provides comprehensive data on the financial
transactions of the then 4,816 special districts in California Their overall
expenditures totaled $15.9 billion that fiscal year. Electric and hospital
districts are excluded.
California also had 327 Unified School Districts,
566 Elementary School Districts, 93 High School Districts and 70 other
Districts for a total of 1,056 in 2003 according the State Department
of Education. Additionally, there were 72 community college districts
with 108 colleges.
Not only is the cost of duplication astronomical,
but the bifurcation and duplication of function is undoubtedly confusing
and inefficient. I do not profess to have the solution to this problem,
but feel that it should be addressed. Other than the brief attention given
of 1969-70, it has never to my knowledge been addressed, but is obvious
to anyone observing bureaucracies at work.
The above will be discussed at our September
11, 2003 meeting.