HOWARD JARVIS TAXPAYERS ASSOCIATION ISSUES WARNING

A bulletin, issued by the Howard Jarvis Taxpayers Association (HJTA), just received, states "The State Legislature is now offering local governments even more money in the form of fees and assessments (property taxes by other names) - and now 'levies' that you'll never vote on, but have to pay or lose your home."

The bulletin also relates the following warnings:

• Right now, the State Legislature is preparing to give local governments more and more ways to easily increase dishonest "below the line" taxes … increases that would quickly drive your local property taxes above Propositions 13's 1% cap.
• Assembly Bill 1665 (AB 1665) will authorize a huge regional agency to impose "special benefit assessments" on homeowners for flood control projects …without any taxpayer vote.
• Assembly Bill 1335 (AB 1335) will add even more assessments - dishonest property taxes - for "community benefit" programs … defined by local politicians and bureaucrats.

If even one of these bills passes becomes law, Californians will see huge property tax increases. The most dangerous pro-tax legislation is Assembly Constitution Amendment 13 (ACA 13) which creates a whole new kind of property tax called a "levy." This "levy" is legally defined as different from an "assessment", and it is technically not a "property-related fee" even though it is paid only by property owners. This "levy" is a new legal distortion that lets local governments raise property taxes without a vote. Since ACA 13 is a Constitutional Amendment, it would have the same legal impact as Proposition 13 … countering all the constitutional taxpayer protections under Proposition 13. ACA 13 creates "levies" for one purpose - flood control. However its backers admit they are using it as a wedge to open the way to more "levies" for more purposes. Levies could then be used for social purposes, parks, stadiums, every politician's and bureaucrat's pet project, all imposed on property owners without any vote. The tax and spenders we have leading our Legislature are pushing this legislation as their best opportunity to raise property taxes without Proposition 13 getting in their way.

For more information on these pending attacks on all property owners visit the HJTA website www.hjta.org.

KING'S ARENA SAGA CONTINUES

Terri Hardy's May 29th Sacramento Bee article "Arco's flaws have Kings calling foul" continues the saga of Arena. She added news that Bobby Hernreich, a minority owner of the Kings, is leading the latest public relations push for a new Arena, and implies that the Kings owners themselves are now joining in the push. Terri's article relates that, "In discussions about replacing Arco, the Kings owners have said they want an 'NBA standard' venue with wider seats and more shopping and dining options. They propose more seats - 18,000 from 17,317 - as well as 5,000 club or VIP seats and at least 55 luxury suites. They've indicated that they think a new facility would cost about $400 million."

Also, News Channel 10 reports that Steve Capps, a spokesman for developer Angelo Tsakopoulos, confirmed that Tsakopoulos is behind new talks to replace the old Arena. At this point there are no specifics.

And the beat goes on!

SMUD'S YOLO COUNTY ANNEXATION

The Sacramento Municipal Utility District (SMUD) is considering annexation of West Sacramento, Davis, Woodland and the unincorporated areas between the three cities, which would require the "hostile" purchase of the existing Pacific Gas and Electric (PG&E) facilities presently supplying those customers being annexed.

The League sent a letter to SMUD advising that we will oppose any attempt at such an annexation if the process does not include an authorizing vote by existing SMUD customers in Sacramento and Placer Counties, the true owners of SMUD. The letter included a number of League Director Paul Carr's (a former SMUD Director) questions for SMUD that should be answered for the residents of Sacramento County before SMUD turns the issue over to LAFCO for consideration. We have had no response. Further, the SMUD Board voted to proceed with developing the case for the annexation, and specifically stated that in their opinion there is no need to put the question to present customers in Sacramento and Placer Counties.

We seem to be on a crash course with our public utility leaders.

POLITICIAN'S SALARY INCREASES

The State of Californian Legislative elected officials have just accepted a 12% pay raise from a "Panel", originally appointed by former Governor Davis, making them the highest paid politicians of any of our states. It raises their salaries from $99,000 to $110,880 beginning in December. They also receive a travel allowance, a tax free $138 daily allowance for each day the Legislature is in session, a state provided vehicle, and other benefits. The decision is final. The Sacramento Bee reported that our Vice President, Jonathan Coupal, President of the Howard Jarvis Taxpayers Association said taxpayers already are unhappy with the Legislature's performance, and that, "The reality is that it sends the wrong message symbolically. They have not had a raise in the last (seven) years, but in those years the California Legislature, in conjunction with Governor Gray Davis, almost ran the state into bankruptcy."

Ted Costa - when you get finished with your reapportionment Initiative, please start on a part-time Legislature Initiative so we can get rid of the professional politicians, and get back to the type of representatives envisioned by the nation's founding fathers.

REVISITING THE PERIPHERAL CANAL AND AUBURN DAM

Director Joe Sullivan
At the last League Board of Directors meeting we were briefed by Mr. Michael Finch, a State of California Geological Engineer for over 20 years, who is a recognized expert on the Delta and its levees, with emphasis on its seismic vulnerabilities. His work has been published in journals including California Geology, and The Association of Engineering Geologists Bulletin. The information provided was extremely interesting to me as an Engineering Geologist (since 1951), engaged in water supply in the Sacramento region, also for over 20 years.

The subjects Mike dealt with have come to the forefront again as a result of last years levee failure, and recognition that we live in a fragile area extremely vulnerable to flooding of many kinds. The devastating 1986 flood came within minutes and inches of topping Sacramento's levees and flooding our valley and its capital city. The '86 flood was followed by the '95 flood that overwhelmed our local drainage systems, and the '97 flood flanked the American River watershed, and destroyed levees north and south of the county, inundating the flood plains. As Sacramento's flood control facilities have only about a 140-year flood capability, we can be inundated by rains and snow-melt exceeding the 150-year flood level. And the 140-year flood protection level was achieved by putting together a patchwork of small flood control and levee repair projects. This is well below the 200-year level, agreed by all to be a minimum for protection for Sacramento, and way below the 500-year protection enjoyed by all the major cities in the United States adjacent to major rivers. The Corps of Engineers, the Bureau of Reclamation, the Sacramento Area Flood Control Agency, the local elected officials, and virtually all of the people living in the flood plain agree that the best solution to protect Sacramento is a flood control dam at Auburn, with its potential for affording 500-year flood control. The only dissenting voices are those of environmental activists, and their allies outside the Sacramento region and the state of California. Although a militant minority, they have been successful in thwarting all attempts to build the Auburn Dam, thereby endangering all in the Sacramento valley.

The Sacramento Bee reported that Assemblyman John Laird, D-Santa Cruz, has a bill, AB-1200, to launch a Delta study that is backed by the Sierra Club, and a Silicon Valley business group. The Association of California Water Agencies (ACWA) is also calling for a "blue ribbon panel" to look at all the problems associated with the Delta, and its critical position as the water supply source for two-thirds of the state. Importantly in this review, as pointed out in The Bee, will be revisiting the need for a Peripheral Canal to move the southern state water supply around the Delta, rather than through it.

Which brings us back to the Auburn Dam. Most people appear to have forgotten that the Auburn Dam, as originally approved by Congress was to have export water as its first priority, local water supply as its second priority, and protection of the Delta as a tertiary use. It then should become, along with the Canal, an important part of any proposed study. And as a sidebar, my article: "The Hydrogen Highway", in last month's Perspective, ended by stating: " The harnessing of hydrogen to power the number of automobiles in the United States is going to require a massive related increase in hydro and atomic electric power production, more massive then anything we presently visualize or are planning for." I want to remind all that the Auburn Dam, in addition to providing flood protection and a water supply, would also have a hydroelectric component, among the most environmentally preferred sources of electric power.

CITY OF SACRAMENTO NEW PLOY FOR MONEY

The City, as of old, has become enamored again with the word "fee" in lieu of "tax" to try to raise money. The reason? They don't have to get voter approval for a fee. All they have to do is approve a City Ordinance, and bingo, new money appears like magic. The last time they pulled that stunt was the 10% "in lieu franchise fee" they charged their own Utilities Department for providing City residents water, storm water drainage, garbage disposal, and sewage relayed to the regional plant, as though the Utilities Department was a private contractor. Then League President Jonathan Coupal and Executive Director Joe Sullivan met with Mayor Joe Serna and City Manager Bill Edgar, and explained that the City was violating the law. The League representatives recommended that the City put the fee, as a tax, to the voters. Mayor Serna and Bill knew they were caught with their finger in the pie. Rather than fight it in court, they changed the "fee" to a tax, put it on the next ballot, and it was approved. However, the City has hidden the approved tax, now 11%. Imagine, the rate charged on every glass of water poured in the City has a hidden 11% tax in the rate. And the same dodge is in the rate for every can of garbage picked up, every toilet flushed, and all the stormwater handled. The League is working to shed light on that issue now.

Now the City has a different Mayor and City Manager, who either forgot past history, or believe the League has gone to sleep. They are back, along with the County, with a new fee scam. They want a fee on 911 emergency telephone calls. The League advised it was actually a tax, and that we would oppose the move. Turns out that Stockton tried it, and has been challenged in court by SBC Pacific Bell. The League agrees with SBC, and will file an Amicus Curiae Brief in support of SBC, as a defender of the taxpayer, as soon as we have a case number and Judge's name. The City and County, temporally stalled on 911, are now sniffing around putting a fee on 311 telephone service. Same type scam as the 911 ploy, but with a slightly different twist.

But those two ploys are only the beginning. The City is also harboring a mandatory fee-based $20-$25 annual charge to be paid by rental owners based on the number of rental units in the City. The City estimates there are approximately 90,000 rental units involved. The same type inspection program planned by the City has been tried elsewhere in California, and has been eliminated because it does not work. Concord, Glendale, and Berkley have each dumped their programs. And the City of Davis recently voted against a rental inspection program similar to the one the City of Sacramento is proposing. If the City goes ahead with this program, the League will almost assuredly object.

The League recommends that the City of Sacramento look toward calling for a vote on such "fees" and to call them taxes, as that is what they truly are. And for the County we advise, be careful about being drawn into the maw, when the City dreams up one of these type beauties. The old adage "history repeats itself" sure applies to these City schemes.

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 number is (916) 921-5991. Our fax number is (916) 567-1279. And our address is:
Sacramento County Taxpayers League
1804 Tribute Road, Suite 207
Sacramento, CA 95815.

EXECUTIVE DIRECTOR'S MESSAGE

May has been a busy month from many points of view. The legislature is heating up as they get near to finishing their review of the Governor’s 2005-06 proposed budget and proponents of statewide initiatives start to come out of the woodwork.

One such initiative to watch with caution is the “Split Roll” Property Tax initiative. Voters are currently being asked to sign petitions for a statewide ballot initiative that, if passed, would impose billions of dollars in higher taxes on our state’s small businesses and all business property owners in the state—and billions in higher costs for every California consumer as businesses pass along those tax increases. The initiative could appear on the ballot as early as this November if there is a special election, or in June of 2006. We urge Sacramento taxpayers and voters to NOT sign the petitions for this multibillion dollar tax increase.

The initiative would blow a hole into Proposition 13 and force the County to reassess business and non-residential properties every year for the purpose of increasing property taxes. Voters passed Proposition 13 in order to protect residents, small businesses and all property owners from runaway property tax increases. This initiative would erode those protections and hurt the very small businesses and other property owners who can least afford higher taxes.
If passed, the initiative would result in skyrocketing tax increases for property owners all over the state—at least $3.5 billion in higher taxes each and every year according to the nonpartisan legislative analysts office.

The initiative would be particularly harmful to small business owners—the economic engine of the California economy—who can least afford a massive tax increase. Ultimately, every California consumer will pay for this massive tax increase—as businesses pass along billions in higher taxes to consumers.

Don’t be fooled by any of the sponsor’s claims. This is a multi-billion dollar tax increase, with no accountability, that every Californian will ultimately pay for.

Bruce Lee, Executive Director

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