K STREET MALL LIGHT RAIL STATIONS

The SCTL has taken a 'we disagree' position on the City's proposal to spend about $800,000 to move two light rail stations on the K Street Mall, one right at the entrance to the Downtown Plaza shopping center. A letter was sent to the project lead at the Economic Development Dept (EDD), expressing our feelings. A copy of the letter will be distributed at the SCTL June 21st General Board meeting at Zigato's.

THIS 'N THAT
Bob Blymyer

County Board of Supervisors - Cheers: for making a necessary tough decision on County employee benefits.
Jeers: for appropriation of $1,000,000 in tax revenues to Daughtery Chevrolet for a ten year period.

State Term Limits - Here is a quote from the "No Uncertain Terms" newsletter, March/April 2007 edition: "After reading poll after poll showing overwhelming support for California's current term limits, legislators faced what should be an obvious choice. They should honestly make their case to the voters that term limits should be extended or abolished. Unfortunately, and predictably, California's Legislature chose the path of deceit and trickery. Does anyone wonder why Californians continue to hold the Legislature in such low regard?" (Pete Schabarum and Lew Uhler, co-authors of the 1990 term limits measure Prop 140)

Natomas Unified School District - Can you believe this actually happened? The school district paid $325 million for land worth far less than what was paid; then found that the law firm hired to advise them on the real estate deal also does work for the developer that sold them the land. At least the superintendent in charge of all this doesn't teach the kids too!

SACRAMENTO CITY BUDGET SHORTFALL
Joe Sullivan

Sacramento Bee reporter Terri Hardy's May 15th article, "City predicts $4.5 million deficit, cites housing slide" unfurled all the red flags at the Taxpayers League. The article discussed Sacramento City's 2007-08 budget's predicted $4.5 million shortfall, and related that property transfer taxes and supplemental taxes are down, and that so are sales and utility user taxes. Those statements are no shock to anyone watching the current trend of the state's economy, but what caught our eye was her statement "proposed is a 7.4 percent utility rate increase for a typical single-family customer with a house of six or seven rooms. That increase will take effect July 1. A second utility fee increase, to take effect July 1, 2008, is also on the table." The use of an overall utility rate increase, for all affected utilities, is not the way it is done, and raised our flags. We found that Terri had selected just one example from hundreds of individual increases involved.

In Sacramento County there is no way for any of its Cities, by themselves, to increase the normal Utilities User Rates, and any related tax increase must by approved by the voters. Such rate increases are controlled by the individual private and public utility providers, and normally involve electric power, natural gas, telephone service, and cable television. In the City of Sacramento the Utility Users Tax (UUT) is 7.5% - three times more than in the County or any of its other cities. The City's UUT provides the General Fund over $55 million per year. It is the loss of some of these taxes that is being bemoaned. What Terri did neglect to relate is that she was referring to rates charged for utilities the City of Sacramento provides to its residents, i.e., water, garbage, sewer, and storm water drainage, and the 11% Enterprise Fund Tax (EFT) derived from those rates that is unique in the County, and provides over $15 million a year to the City's General Fund. Ergo, it is possible to increase the amount of money collected by the EFT simply by raising the City's utility rates, which the city can do. And City residents seem not to notice, or may have forgotten the related tax, as the EFT doesn't appear on their utility bill. What the city does is applies the 11% EFT against the money collected for these utilities in the Enterprise Fund, instead of against the individual utility service. As the tax is not shown on the utility bill, the tax is hidden.

We contacted the City's Utilities Department, and were advised they were posting their approved utilities increases for 2007 and 2008 on the City's website. During the discussion we were advised that the increases are needed to cover the same types of increased costs being encountered by all utilities, factors we already recognize. It is not the demonstrated needed cost increases that we object to, it is the piggy-backed tax increase that automatically occur each time a rate is increased, which in this case is 11%. We have always opposed utility taxes because they are regressive. They tax necessities, taking a disproportionately higher percentage of low-income wage earners' money than from those more fortunate in the community. State Legislatures, notwithstanding budget shortfalls over the years, rejected taxing any utilities. They, as we do, reason utilities are necessities, consistent with exemption of food and medicine from the state sales tax. Consequently, we are highly sensitive to any action that raises such taxes. The City's unique EFT is particularly repugnant, as among its taxes, is a tax on water, an essential ingredient to sustain life. And insofar as we can determine, only the City of Sacramento has such a tax in the state. We consider this to be reprehensible, and our League Board is considering actions to reduce or eliminate the EFT.

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

Operation Permanent Offense - At the May SCTL meeting, members were treated to a powerpoint presentation on 'Operation Permanent Offense' (OPO), by Lew Uhler, President of the National Tax Limitation Committee. OPO is a coalition of people that want to see a positive change in the way California governs itself. The group will be led by elected and volunteer leaders, with a local grassroots style of presence.

OPO will provide an ongoing mechanism for early detection of costly initiatives, advocating anti-tax limited government initatives at state and local levels. Mr Uhler, who is well known among anti-tax supporters as a co-author of Prop 140 (1990 term limits measure), provided an interesting and entertaining overview. The talk included reference to an economic analysis by Gerald W. Scully of the National Center for Policy Analysis. This analysis showed that government (at all levels) should not tax and spend more than 23% of Gross Domestic Product (GDP). Not surprisingly, current levels of all government together are at about 35%, primarily as a result of decades of liberal legislation.

The OPO website can be found at www.LimitTaxes.org. It is well worth reading.

Loss of long-time Member - Long-time SCTL member Antone Fagunes passed away recently. He had been a member since 1963, a 44-year commitment. Mr. Fagunes will be missed by all.

City of Sacramento Budget Issues - The 2007-08 City Budget is projected to be $965,000, an increase of $95 million over last year. The majority of the increase is for safety related items, which would include more emergency dispatchers, and a new '311' non-emergency call system, among other items.

As a result of declining tax revenues, City staff projected a $4.5 million deficit for the fiscal year beginning July 1. That was on May 15. Then, on May 22 City staff came back to the Council and said that the shortfall was going to be $29 million! Stay tuned.............we will be watching.

June 2007 Board Meeting - At the next Board meeting, Executive Director Bob Blymyer will be presenting the first draft of the SCTL Long Range Plan, focusing on League Activities and Membership growth. Thursday, June 21 at Zigatos Restaurant (across Highway 160 from the Radisson).

Bob Blymyer

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