MARCH 2nd ELECTION RESULTS

Prior to the March 2nd election, the League’s Board of Directors voted to oppose Proposition 55, the $12.3 Billion Public Education Facilities Bond Act for new schools and repair of existing facilities, and Proposition 56, the so-called Budget Accountability Act, which implied it would end Capital infighting on the state budget, but whose true purpose was to lower the threshold for passing the state budget, and all taxes, except property taxes, from 66.6% to 55%.

They also agreed to support both Proposition 57, Governor Schwarzenegger’s $15 Billion Bond to refinance the state’s short term, high cost accumulated debt, and the linked Proposition 58, which would establish a mandatory budget reserve and restrict future borrowing. Refinancing the short-term loans will save money in the long run. Propositions 55, 57, and 58 passed, and to the relief of all taxpayers in the state, Proposition 56 was soundly defeated. It was obvious that the citizenry saw through the misleading advertising that public sector union proponents used to try to mislead voters into approving diminishment of the Constitutional two-thirds vote protection requirement to pass taxes, protecting all taxpayers in the state.

SACRAMENTO CITY COST OVERRUNS – AGAIN

Last month the Tax Fax exposed part of the extent of City and County culpability in acting like bankers over the years, using Sacramento taxpayers as guarantors of loans made to private investors, and as providers of selective direct and tax subsidies to commercial enterprises.

The Fax article ended by advising that in 2003, the City unveiled plans for five new downtown housing projects that involve 680 units that could add as many as 1,000 new residents to the area. All will require financial partnerships between government and developers. Funds from the City’s Sacramento Housing and Redevelopment Agency (SHRA) needed for the five would be $24.05 million in tax money as gifts, loans, one forgivable $5 million loan, and the gift by the City of land worth about $7 million.

Also pushed was the Mayor’s desire for a downtown arena involving at least $300 million in taxpayers money; the City’s $16 million subsidy for the developer to build a 7-story apartment complex on J Street, 35% of the total $46 million cost of the entire project; the City and County’s approval of the Ballet’s request for forgiveness of one dollar for every dollar they pay to retire their now $362,000 loan, without interest, and approval of the same deal for the Opera to retire their $76,781 loan.

And the City has opened up 2004 with a doozie! The Bee’s Tony Bizjak broke a story on March 21st that the City is considering picking up (literally) the 7,000-ton downtown train depot and “moving it 400 feet north to be part of a new multiuse transit center”. The moving cost estimate is $10 million, and the new center’s overall cost is estimated at $160 million. Wanna bet the deal will cost more?

Jock O’Connell, a Sacramento-based international business consultant took a whack at this proposal the same day in The Bee’s Forum section. He pointed out major problems the City leaders, in their excitement, evidently either haven’t considered, or chose to ignore. He states, “what is truly remarkable about this project - beside the maddeningly unresolved question of its financing - is that no one at City Hall seems to think it at all odd that the hub of the region’s transit system should be located on the region’s demographic rim.” He goes on to explain that the six-county region that will use the hub is spreading relentlessly eastward along routes 80 an 50; that the region will have 928,000 more residents in 2025 than in 2000, most in the outlying areas; and of this downtown Sacramento, Land Park, and east Sacramento will only see 34,000 new residents by 2025. Basically O’Conner is pointing out that the “expensive rail center isn’t being built nearer to where most of the region’s people will be living and working.” The article should be read by anyone following the City’s odd schemes for the old Union Pacific yards, and should be required reading for all members of the City Council and the Mayor.

HERE COMES THE LIVING WAGE

The Bee’s Andy Furillo reports that, “More than 40 Downtown Plaza parking lot attendants are in line to become the first group of Sacramento workers to get a raise under the living wage ordinance approved last year by the (Sacramento) City Council.” They’ll receive hourly raises of $1.75. If the City Council approves the contract, including the living wage requirement, it will add $160,000 a year to run the Downtown Plaza parking operation. Parking fees are not to be increased to compensate. Instead, the city’s parking chief Howard Chan said, “the cost will be absorbed into the city budget.” He contends the parking division generates enough revenue to offset the pay raise as it is an enterprise fund, thereby having zero effect on the general fund. However, he went on to say the living wage increase will be extracted from a deferred-maintenance fund. The money otherwise would have been used to pay for capital improvement projects.

What actually occurs is a defeat of the cost-of-service concept for public enterprises i.e., the money collected no longer covers the total cost. It is, in fact, a subsidization of salaries, covered by diverting maintenance funds and deferring repair and replacement needs for the involved facilities. Consequently, to correct the imbalance the difference will have to be paid for by the taxes in the General Fund, or by bond issues. So once again, the City of Sacramento is electing to spend taxpayer’s money for another type of subsidization, this-time $160,000 a year to parking attendants. And if the same approach is used as each new city contract is awarded, the subsidies will increase, with further draw-downs from the General Fund, or borrowing. This is the classic failure scenario prevalent for degradation of public works, and decay of school facilities throughout the state.

SACRAMENTO COUNTY’S BUDGET

The County faces a deficit of $49 million in its 2004-2005 budget year, and as a result the Board of Supervisors is desperately trying to determine what and where monetary cuts are to be made. Effectively, they must eliminate two-thirds of the $65 million in discretionary money they had planned to spend over the budget year. Any budget prepared for the Counties and Cities in the state emphasizes public safety as a primary function, and virtually all consider law enforcement to be the top priority.

Over the past two years the Supervisors have tried to hold the line by making relatively small cuts in the Sheriff’s budget as income declined, but this year they seem unable to continue the favored treatment. According to The Bee, Lou Blanas’ Sheriff’s Department stands to lose $30 million of its $258 million budget (11.6%), while Jan Scully’s District Attorney’s Office stands to lose $3 million of its $55 million budget (5.5%). Looks like Lou will not be able to catch the bad guys as fast, which helps Jan, as there will be fewer miscreants to run through the courts. The only problem is that the guys Lou doesn’t catch for Jan to put away will still be on the streets up to mischief, or worse. But help could be on the way, according to the next article, if the County handles its tax proposal properly.

THE COUNTY’S NEW TAX SCHEME

The County Board of Supervisors is proposing to ask voters in the urbanized, unincorporated part of the County to create a new County Service Area (CSA11), as a taxing area to provide revenue sources for certain budgetary items. CSA 11 is basically intended to cover the needs of “extended police services”, but has some nebulous language in the proposal that touches on other weakly funded areas in the County, such as local parks, recreation and animal control.

Dirk Werkman, of The Bee, wrote that officials representing park districts in North Highlands and Rio Linda-Elverta, recognizing that CSA11 is aimed basically at levying taxes for police service, fear CSA11’s references to parks and recreation will imply to the public that the taxes are also funding those facilities. That may not be the case. As a result, the officials fear voters may be reluctant to approve taxes submitted to them by local park districts.

The new tax proposal was discussed by the League Board of Directors who unanimously agreed that CSA 11, if put before the voters, should be a stand-alone Measure for “extended police services” in exclusion of any other “latent” service. The League sent a letter to the Local Area Formation Commission (LAFCO), who has the task of approving such requests, asking that, “should LAFCO approve CSA11, LAFCO approve only extended police protection as a CSA11 power, and that all other powers requested by the County be denied.” The League believes that a clearly defined single purpose CSA11 will help taxpayers better identify the issue upon which they cast their ballots. The League also advised that we will review any ballot Measure in support of CSA11, and may take a position when such a Measure is available for review.

PROPOSITIONS FOR NEXT NOVEMBER’S ELECTION

Allegedly, there are about 50 Propositions, either in process, or under consideration for the November ballot. One already has enough signatures to qualify for the November ballot, a Mental Health Measure, which would put a one-percent income tax surcharge on those earning one-million or more a year to provide for its funding. Another is Ted Costa’s Reapportionment Initiative, presently gathering signatures to place the planning of future political districts in the state under a panel of three retired judges rather that leaving reformation of districts to the Legislature and Governor. The Cities and Counties throughout the state are supporting those gathering signatures to end the highjacking of property taxes by the state. Governor Schwarzenegger is pushing a Proposition to change laws governing workman’s compensation in the event the Legislature fails to take corrective action by the end of March. Another measure would increase taxes on commercial properties, earmarking the proceeds for preschools and teachers salaries. The list goes on-and-on. Obviously many will not gather enough signatures by mid-April, but signature gathers are out there trying.

SENATE BILL SB 2, HEALTH CARE

This bill, approved last year, requires employers to provide health care coverage to employees and dependents by purchasing coverage from any health care service plan, or by paying a fee to the State Health Purchasing Program (SHPP), which would use a purchasing pool to provide coverage. It is a mandate. It is included in the Tax Fax to make Members aware that this bill exists, as there is little doubt that it will prove to be as destructive to businesses as is the workman’s compensation bill that is presently destroying businesses throughout the state. The Legislature and Governor are now trying to correct the workman’s compensation bill to try to control run-away health costs and to reduce the rupturing premiums. SB 2 is waiting in the wings to help drive businesses out of the State of California.

MEMBERSHIP RECRUITMENT

Our Members constitute the League’s strength, and traditionally new Members are recruited by our present Members to enlarge our base. Taxpayers are being assaulted 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 43 years, we have successfully defeated many attempts to raise taxes, rates, fees, and assessments 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 more Members working to strengthen the League by recruiting friends and associates as League Members.

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 Suite 210
Sacramento, CA 95815

Actually, Ted’s latest effort is a statewide Proposition titled REAPPORTIONMENT. INITIATIVE CONSTITUTIONAL AMENDMENT. It amends provisions for reapportionment of Congressional, Senate, Assembly, and Board of Equalization districts. It establishes criteria for drawing new election district boundaries, beginning with the 2006 election, and provides for appointment of three retired judges to prepare the proposed reapportionment plan. The intent is to take reapportionment away from the Legislature to end gerrymandering districts to make them safe for incumbent politicians. As the People’s Advocate is gathering signatures, I went to Ted’s office for petitions to give to the League Board of Directors at their March 19th meeting. As I was leaving, I told Ted I wanted to leave a subliminal message, and whispered in his ear, “Part-time Legislature”. He just smiled.

On March 20th I read Alexa H. Bluth’s Sacramento Bee article “Spending goes up in Legislature.” Bluth pointed out that as legislators “sliced spending throughout state government over the past two years, the Legislature’s own budget grew and is slated to rise again in Gov. Arnold Schwarzenegger’s budget proposal.” They got a $7.5 million increase from Davis last year, to be topped by about $10 million more from Schwarzenegger in his budget, which cuts billions in other areas of government. The amount in the governor’s budget for the Legislature is nearly double the amount spent 10 years ago. In The Bee article our Vice President Jon Coupal said of the Legislative increases, “It’s important from a public perception standpoint. Failing to reduce their own spending sets them up for charges of hypocrisy from both liberals and conservatives.”

Based on the Legislator’s piggish action, next time I’m in Ted’s office, instead of a subliminal message I’m going to paint “PART-TIME LEGISLATURE on the wall!

Joe Sullivan