Our Annual Dinner, the only full Membership Meeting and Fund Raiser of the League during the year, will be the evening of April 24th at the Radisson Hotel. The Dinner gives us 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

The Howard Jarvis Taxpayers Association President Jonathan Coupal will be our Keynote Speaker. Jon, one of our two Vice Presidents and a former League President, is recognized as the foremost independent taxpayer advocate in California, and is sought as a speaker all over the state by taxpayer groups and tax-fighting elected officials. Jon is engaged in major statewide battles, trying to protect all taxpayers from the antics of the Governor and Legislature as they try to develop a budget for this and next year. During such a time all taxpayers are at extreme risk, and Jon stands to defend all.

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. The insert is the invitation to the Dinner. Make your reservation now, as seating is limited.

COMPLETE FAILURE OF THE CITY UTILITY USER TAX REBATE PROGRAM

In October 2002, thirteen days before the November 5th election, the Sacramento City Council approved a Resolution expanding the City’s Utility User Tax (UUT) rebate program to City residents that pay the taxes, whose yearly incomes are $25,000 or less. The Resolution evolved from the Taxpayers League’s November ballot Measure T, intended to reduce the City’s unfair 7.5% UUT, and which called for the rebate to the City’s low-income people. Fearing Measure T would pass, the City approved the rebate Resolution to dampen Measure T’s attraction to low-income voters. As a result Measure T lost, but just by fewer than 8% of the vote. Last month the time came to implement the low-income rebate. The City sent a letter to all City residents advising the manner in which those eligible for rebates could apply for a refund. The process developed, in so far as we can determine, acted to deny those eligible a practical opportunity to get back the utility taxes they paid in 2002.

The procedure the City Council approved required that those seeking rebates must appear in person with supporting eligibility information, at one of nine UUT Tax Rebate Processing Centers, open one day each between March 3rd and March 15th for an aggregate total of 41 hours. During the presentation to the Council the staff pointed 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. Forty-one hours to process 44,000 people, in person!

At the hearing, and in a letter to the Council, League President Joe Sullivan complained the procedure is functionally deficient. On behalf of the League he pointed out that marshaling some 44,000 people seeking rebates, and requiring them to personally appear was incredulous. He suggested that the mass mailer describing the rebate opportunity be sent to all City residents with a form at the bottom soliciting information from those who believe they qualify for the rebate. This would eliminate the logistic nightmare of trying to get such a mass of people to appear at different locations throughout the city. The Council ignored the recommendation, sent out the letter of instructions, which also advised “Applications will not be accepted after March 15, 2003.” On March 3rd the process began.

Sullivan was at all but one (only open for 2 hours) of the nine Rebate Centers during the process. His approach was simple. He counted the number of adults in line when the doors opened, timed how long it took to conduct the processing (between one and one half hours to one and three-quarter hours for all) until there was no longer any semblance of a line. He left when the process was reduced to scattered walk-ins. The result at all centers was virtually the same. The first two attended, oddly, had 79 adults in line when the doors opened! And the people were not all individual rebate seekers. Many were husband and wives, and sadly, the first day the line had 4 people in wheel chairs accompanied by helpers, and one woman using a walker. Of interest is that at all the Rebate Centers the majority of 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 was closed, the final official City count for all Centers was 2213 eligible for rebates, out of a City estimate of 44,000 eligible, just over 5% of the total. The process was a debacle as was predicted.

The City budgeted $3.194 million to cover all those estimated to qualify for rebates. Of that, $2.5 million was specifically added to cover the new rebate need. The instruction letter contained a table showing the total Maximum Rebate for year 2002 would be $56. If all 2213 qualified for the maximum rebate, the total cost of the rebate would be $123,928 for those people processed, leaving $2,376,072 (less processing expenses) in the General Fund, tax money that low-income people paid, but did not receive. On April first (an appropriate day) the results of this debacle will be discussed by the City Council, and it is assumed they will discuss the disposition of the remaining money. The League will be there. If there is no attempt to find the other 41,787 low-income people to return their money, the League may have to move to correct the program. And at the same time we’ll certainly look at reducing the 7.5% Utility User Tax, three times higher than anywhere else in the County, to 2.5%, where it belongs.

TWO-THIRDS VOTE TAXPAYER PROTECTION UNDER ATTACK

The Howard Jarvis Taxpayers Association 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. 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 property owners should 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. Jon Coupal, our Annual Dinner Keynote Speaker, will certainly address these attacks at the Dinner.

THE MAYOR AND THE DOWNTOWN ARENA, AGAIN

There is no doubt that Mayor Fargo, like Admiral Farragut entering Mobile Bay, is saying to all of us, “Damn the torpedoes (they were actually mines), full steam ahead!” when it comes to a downtown arena. Knowing full well she will not prevail if she asks the community to tax themselves to buy the Maloof’s and the other King’s owners a new house for the Kings, she’s trying to conjure up other sources of money. Lets see what they’re up to.

The general idea is for the City to buy the land from Union Pacific, then build and own the arena. The total cost could be more than $500 million. The City would put up 80%, i.e., $400 million, and have the King’s owners anti-up 20% of the cost, not as an up-front $100 million payment, but as a pay-as-you go deal. That’s an interesting concept, particularly in face of the history of the $73 million loan made to the Kings in 1998. They are not paying anything on the principal of that loan, and are not even paying all the yearly interest. Right now that loan is over $80 million, and getting bigger every year. Also if the new arena is built, the City will turn over most of the income from events over to the King’s owners. And on the side of the City, their $400 million has to come from taxes, redevelopment money, or from something like the latest ploy, a 10% surcharge (that’s a tax with another name) on food and drinks bought downtown. They want to create “an entertainment district” around the area near the arena to define the boundary of the 10% tax, and maybe a 3% tax on food and drinks outside the boundary in the rest of the City.

The arena feasibility report is being delayed pending negotiations among the three participants, the City, the Kings and the Union Pacific. When this report is completed it ought to be a hummer, which will propose to put the City taxpayers in hock for most of their lives.

WITHDRAWAL OF LEAGUE FROM CITY UNIFIED SCHOOL DISTRICT BOND OVERSIGHT COMMITTEE

Since January 2000 Taxpayers League Director Pat Kelly has been our representative on the Sacramento City Unified District School Bond Oversight Committee, established to monitor the use of the $195 million bond Measure passed to provide extensive overhaul, modification, and in some cases replacement of the District’s school facilities. After two years of working with the Oversight Committee, Director Kelly recommended to the League Board of Directors that the League withdraw its participation as part of the Committee. Cited was dissatisfaction with the cooperation to, management of, and the lack of effectiveness of the Oversight Committee. Details covering the concerns were first presented to the League Board last November, and since, an analysis of the history of the League’s activities with regard to the Bond Measure, of the Oversight Committees actions, and the basis of the dissatisfaction has been prepared and confirmed. After presentation to the Leagues Board of Directors, a motion for withdrawal was passed unanimously. The report “Sacramento City Unified School District Bond Oversight Committee History and Performance” is the insert in this Tax Fax for Members information.

PROBLEMS INVOLVING THE SACRAMENTO CABLE TELEVISION COMMISSION APPROACH TO LOCAL PUBLIC TELEVISION

This involves a group of problems, with low public awareness, that can have a major impact on public television broadcasting in the County, and the future cost and maintenance of high speed communication links among all County schools for educational programming.

To set the stage, the Sacramento Cable Television Commission is a joint powers agency that covers the County and all its Cities, except for Rancho Cordova. Its eleven member Board of Directors is made up of all five Supervisors, three Sacramento City Council Members, one Council Member from either Folsom or Galt, one Council Member from Citrus Heights, and one Council Member from Elk Grove. Their activities are governed by the Cable Television Franchise Ordinance, Cable Television License Ordinance, and the Cable Franchise Resolution, as well as applicable state and federal law.

The Commission provides funding support and cable channels for local community channels i.e., the Access Sacramento channels 73 and 74, local government cable channel Metro 14, KVIE, Sacramento Educational Cable Consortium (SECC) channels 71 and 72, and Capital Public Radio. The Commission’s money comes from a 5% percent franchise fee on the gross revenue of cable TV providers in Sacramento, and totals from $7 to $8 million a year. This year the Commission received about $1.5 million of this money, divided between Metro 14 ($345,685), and $1.195,806 million to the community channels and public radio. The rest, about $6 million, went to the General Funds of the County and its cities, based on population.

A problem is that the Commission faces a possible $860,000 shortfall next year due to an 8% drop in cable fee revenue resulting basically from a lagging economy, and competition from satellite TV. In addition, a Court, in the early days, decreed, as part of a negotiated settlement involving a 15 year obligation between the Commission and the Cable Franchise, that a 30 megahertz broadband network must be made available for public education. AT&T Comcast, who inherited the obligation when they bought the Cable Franchise, plan to link 4 school districts with the Sacramento County Office of Education as a pilot program for Phase 1. If it is successful, then ultimately every school in the county will be linked to the high-speed communication network as Phase 2, as yet not defined by any study.

A consulting firm, McDonough, Holland & Allen, was hired to study the financial problem, and to provide a recommendation to the Commission on the allotment of revenues for the 2003-2004 budget. Their recommendations have ignited a firestorm. To handle the shortfall, they proposed cutting Access Sacramento funding from $640,000 to $162,000, which could conceivably eliminate Channel 73; Metro Channel 14 from $300,000 TO $175,000; and setting aside $500,000 for SECC as part of the cost of the high-speed net. This net is fraught with unknowns. It is obvious it cannot be supported by the franchise fee. Its installation operational, maintenance, and overhead costs are completely undefined. Further, there is thought of making it a publicly owned, government operated net, which the League immediately opposed. Existing telephone links already exist in every school, and these can be used to provide the service being sought. Stay tuned on this one, because it has the potential of wasting a great deal of taxpayer money duplicating capabilities that already exist.

RECALL OF GOVERNOR DAVIS

Ted Costa, of the People’s Advocate, received the go-ahead from the Secretary of State’s office to begin the signature gathering effort for the campaign to recall Governor Davis. Costa is joined by former Assemblyman Howard Kaloogian and Sal Russo, advisor to Bill Simon during his campaign for Governor. They established Web site www.recallgraydavis.com from which Costa’s petitions can be down loaded, printed, and used to gather signatures. The proponents have until September 2nd to gather the signatures necessary to qualify the Initiative. Required are 897,158 valid signatures statewide. To be sure enough valid signatures are obtained, about 1.2 million signatures must be gathered.

COUNCIL OF SACRAMENTO SENIORS & SENIOR ORGANIZATIONS (COSSO) ESTABLISH A WEB SITE

To provide seniors in the greater Sacramento quick access to links and information regarding senior’s issues, COSSO has instituted an easily accessed web site http://cosso.org that is now on line.

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.

BUDGET ACCOUNTABILITY ACT

Robin Johansen and Senator Jack O’Connell were the coauthors of an Initiative that sought to increase the sales tax by 1/2 cent for education, but it failed to secure enough signatures to get on the 2000 ballot.

Senator O’Connell is now the California Superintendent of Public Instruction and Johansen is back with another Initiative called the “Budget Accountability Act” and he has been joined by James Harrison, former Superintendent of Schools for the Monterey Peninsular Unified School District.

Their new Initiative will make it possible to increase taxes, or to enact new taxes with support of only 22 of the 40 members of the Senate and 44 of the 80 members of the Assembly. In addition, voters will be denied the opportunity to overturn these new or increased through a referendum.

This “Budget Accountability Act” creates the only case in which the legislation enacted with less than a two-thirds vote is not subject to the referendum process.

Leading the drive for this Initiative is the Service Employees International Union, along with the California Teachers Association and the League of Women Voters of California.

Supporters must gather 598,105 valid signatures to qualify the Initiative for next year’s ballot. That would be a formality, given the union’s financial wherewithal and ground troops.

Carl Burton

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