LEAGUE LAUNCHES NEW TELEVISION SHOW

An introductory 30 minute tape for a new monthly TV show, hosted by the League, will be made on November 12th. The show will appear on Public TV Channel 17, at a day and time being negotiated. Its title will be created by the Board of Directors at their next meeting.

ELECTION OF THE YEAR 2004 BOARD OF DIRECTORS

The insert is the Ballot slate of the Board of Directors recommended by the present Board as the future Leaders of the League in 2004, the League's 43rd year. Please return the Ballot during November, adding any recommendations you may have, including yourself or your business, if you have a desire to serve, or want a representative on the Board. Our Bylaws require we have at least 20 Board Members, but no more than 50. The Board's Officers will be selected at the first meeting of the new Board in January 2004.

THE DOWNTOWN ARENA - ASSEMBLY BILL 944 - APPROVED

Assemblyman Darrell Steinberg's Assembly Bill AB 944, modifying the Parking and Business Improvement District Law of 1994, authorizes cities to form property and business improvement districts, which may levy assessments in a business improvement area for the purpose of improvements and promoting activities of benefit to the properties within the district. The change appears simple, but is deceptive as in the past such districts were limited to district business property owners only. Now it can be formed by any businesses in a district regardless of whether they are property owners or not. This makes it potentially dangerous to City taxpayers. The change is such that the City, as organizer of an assessment district, can float up to 30-year bonds on the strength of businesses agreeing to be assessed to repay the bonds and interest over the years. As the City is responsible for the bonds, it is actually pledging its General Fund, fed by the business assessments, to make the payments. If the assessments fall short, the City taxpayers make up the difference.

AB 944, passed during the closing days of the budget hearings, was approved by Governor Davis. According to political consultant Richie Ross, the Sacramento Kings owners had the bill crafted and presented it to Assemblyman Steinberg. He, in-turn, carried it to the Assembly on the request of Mayor Fargo. In addition, the Kings owners donated $100,000 to Governor Davis' anti-recall campaign, the last full week in September. Of interest is that Ritchie Ross is a consultant for the Kings, and advisor to Mayor Fargo and Assemblyman Steinberg, all the principals involved in creation of AB 944.

THE DOWNTOWN ARENA - MAYOR FARGO CANCELS VOTE

Mayor Fargo had announced she "will ask the public to weigh in on whether the city should push for a downtown sports arena, with an advisory vote to come as early as March." Since, a study titled, "PHASE 2 ANALYSIS OF A SPORTS & ENTERTAINMENT DISTRICT on ways to finance the arena, and the rest of the district, was completed on October 16, 2003. It was the core of a workshop held in the City of Sacramento Council Chambers on October 21st to look at costs.

The report is "the second phase of an analysis to assess the feasibility of creating a new sports and entertainment district (the SED), anchored by a new arena and other destination-type attractions, on or near the Union Pacific Rail yards in downtown Sacramento." Phase 1 had been completed in March 2002, and the total cost of the two studies was $800,000, divided equally among the City of Sacramento, the Union Pacific Railroad, and the Maloof Sports & Entertainment enterprise. Phase 1's Finding #1 stated it is feasible to develop the SED, but also cautioned, "The City's participation in public investment may need to go beyond only public infrastructure based on analysis of comparable NBA markets." Phase 1 was reviewed by various community and business organizations to provide inputs. In November 2002 the City Council approved proceeding with Phase 2.

In the instructions to the study team, the Council provided six guiding principles:

1. A new SED center would be the centerpiece of a broader overall redevelopment effort including related commercial, retail, housing pieces;
2. The center must be a venue for sports and also for performing arts and other related art, cultural and entertainment activities;
3. Financing for the SED must not result in any negative impact to the City's General Fund;
4. Financing for the SED must not result in any negative impact on the $73 million City loan for the ARCO Arena;
5. Any proposed new or increase in taxes for the SED would require voter approval;
6. Financial participation by the City should focus on public infrastructure.

With these instruction, in mind the study team prepared the Phase 2 report and among its findings asserted that: "The anchor of the SED, the Arena Complex, can be financed through a combination of private sources and incremental revenues directly attributed to development of the SED. The financing can be achieved without a tax increase and without a negative impact on the City's credit rating or its General Fund." In developing the fiscal impact, the full cost of the arena complex is estimated at $538 million, which coves the arena structure and related plaza, surface parking, parking garage, land, utilities, streets and takeout of the now over $84 million ARCO debt. The funding sources for the cost included interesting manipulations, and assumptions, that created the fiasco during the first public workshop on October 21st covering the report. Among proceeds listed is sale of land in North Natomas for $15 million, a downtown surcharge (tax) on food and beverages from local restaurants and bars of $287 million, and a $23 million surcharge (tax) on downtown parking. Also in the mix is $125 million in future earnings from food and beverage surcharges (taxes) from the businesses to be built in the SED, and $60 million in new taxes in the SED. The City Council attacked these assumptions, recognizing that they were tax increases on the commercial businesses now in the city, along with its garages. The rest of the story is covered in this month's President's Column.

The end result was that Mayor Fargo killed the advisory vote that had been planned for the March 2004 primary election.

SAD LOSS OF A GOOD FRIEND

All in the County of Sacramento sustained a great loss with the passing on October 28th of Debbie Schmierer, the County's elections clerk in Sacramento County's Voter Registration and Elections Office. Anyone who interfaced with Debbie was always handled with kindness and patience. Working with her was always a pleasure, and her memory for names and needs of those dealing with election details was phenomenal. She was a delight to work with, and will be sorely missed by all.

GRANT JOINT UNION HIGH SCHOOL DISTRICT NEWSPAPER BENG MISSUSED

The League was advised that Grant Joint Union High School District's newspaper Grant Today, paid for with public funds as part of the school's budget, was being used as though it were a privately owned newspaper. For those who have never seen Grant Today, it is equal in size to The Bee, normally about 10 pages, and we are told is mailed to over 40,000 households in the District monthly. The allegation was that the paper is publishing articles and statements advocating defeat of a Citizens' Petition by Families for Better Education to abolish the District, and form two new kindergarten through 12th grade Districts. The petition is currently under review before the Sacramento County Committee on School District Organization, who will decide whether or not to recommend to the state Board of Education that the issue be submitted to the voters.

A review of the Grant Today papers revealed that the allegations appear to be accurate, and that the paper is being used as a political instrument to present a single side of a political issue. Such use is a violation of Education Code section 7054, and being illegal, could put the Grant School District and its employees in violation with the law, punishable by both fine and imprisonment.

Although the League has no position with regard to the reorganization endeavor, leaving it to the voters to make a final decision, the League Board voted to ask the Grant Union Board of Trustees to cease and desist using Grant Today as a political instrument. View the letter to the Trustees in html format.

TWO ORGANIZATIONS STOP STATE'S ILLEGAL BONDS

The recently approved budget for the state contained two bond issues, one for $10 billion, for the state's General Fund, and a second for $2 billion to make this year's annual payment to the California Public Employees' Retirement System (CalPERS) Fund. Both are in the plan to cover part of the state's $38 billion shortfall by long-term borrowing. Both have been challenged on the basis that they are illegal. The Pacific Legal Foundation has challenged the $10 billion bond issue, and the Howard Jarvis Taxpayers Association (HJTA) stopped the $2 billion bond.

The Pacific Legal Foundation is contending that long term borrowing of this magnitude is not a legal option to politicians. It is a violation of the state constitution. The Foundation's October, 2003 "At Issue" wrote, "The delegates to the 1879 Constitutional Convention in California were no-nonsense folks who did not like the idea of government paying its bills by saddling future generations with debt. That is why the state constitution is quite restrictive in the purposes for which multi-year borrowing is allowed. Under Article XVI, section 1, debts of more than $300,000 are permitted only by vote of the electorate and for 'single object or work.' Voter-approved borrowing to buy parks or build schools passes this test, for instance, but long-term debt to pay for general operations of government does not. Certainly, court decisions allow the state to take out short-term loans, paid back over several months (not years) with tax dollars that will soon be in the pipeline. Such 'revenue-anticipation' instruments are not uncommon. But general obligation bonds that would be retired over half a decade or longer are another thing; long-term borrowing to avoid the constitutional obligation have never before been attempted by the state, because such action is so contrary to what the constitution requires."

The HJTA case was unusual in that the state filed a lawsuit against all taxpayers in the state, seeking validation from the court for the $2 million bond issuance that had not been submitted to the voters for approval. Only the HJTA appeared in the court on behalf of the taxpayers. The state wanted to borrow the money, and pay the ensuing interest, to free up money in existing CalPERS funds. This would allow the state to transfer the money to its General Fund. They argued an exception to the law should be allowed as its obligation to PERS is imposed by law, and that it is just substituting one debt for another. HJTA proved the state planned to use the bond money not only for PERS, but to also pay $80 million in bank and lawyer costs, along with taking on debt of hundreds of millions in future interest payments. Judge Thomas Cecil of the Sacramento County Superior Court agreed with the HJTA that the state was not just substituting one debt for another, and stopped the action.

EXTENSION OF CITY UTILITY USER TAX REBATE PROGRAM FAILS

In October 2002, the City expanded its limited Utility User Tax (UUT) rebate program to include all City residents that pay the taxes, whose yearly income is $25,000 or less. The move came as an attempt to blunt the Taxpayers League November ballot Measure T, aimed at reducing the City's unfair 7.5% UUT, and which called for the rebate expansion. The City has estimated that there are 47,000 City residents who qualify for the rebate.

In 2002, before the new program began on January 1st 2003, there had been 5,738 claims for year 2001 tax rebates from seniors 62 years or older with yearly incomes of $25,000 or less, and all disabled people with household incomes of $25,000 or less. In February 2003 the new program began. In March those seeking rebates had to appear in person with supporting eligibility information at 9 City locations open for a few hours each for one day only, with the exception of the location at the Convention Center, which was open twice. The total number of open hours for all was 41. The result was that only 2012 people appeared requesting rebates.

Recognizing this was a very low response, in April, the City Council extended the outreach program through September 2003. During the extended period the City only received 400 additional applications, and as of September 30th the City has processed only a total of 6,601 rebate checks of year 2002 taxes, a total rebate of $411,454 against the $3.1 million budgeted for program. If our math is correct, this means that 6,601 claims for tax year 2002, less 5,738 claims for tax year 2001, equals an increase of only 863 individuals from the new 2412 applicants! It doesn't take a rocket scientist to figure there's something terribly wrong with this program that has a pool of 47,000 low income City people by the City's own estimate. An entirely new approach is needed to get to the missing 45,000 potential recipients of tax rebates!

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 42 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 wholly 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

In the Recall effort, People's Advocate and the other recall committees focused on bad governance and mismanagement of the economy. The recall mechanism started with the circulation of a recall petition, written in proper legal language and signed by a certain percentage (12%) of voters from the last general election.

Perhaps the global media attention given to the California recall was due to the fact that California represents the sixth largest economy in the world, and the Governor-elect is a Hollywood star and a household name.

Some California voters argued that the recall should not take place because Gray Davis was just re-elected to office last November 2002.

Holding of elections does not democracy make. The right of the electorate to constantly hold rulers accountable for their actions, and to seek redress without having to wait for the term of office to end is essential if democracy is to flourish. The aggrieved electorate should not be held hostage to a fixed term of office before they can legally change an incompetent government. This is where the real significance of the California recall lies. What Californian voters can do, others can do as well. But the most remarkable aspect of the California recall is the notice served on politicians everywhere, at least in truly democratic countries where politicians reflect the will of the people, that their election to office does not necessarily mean that once elected they will hold office till the end of their term. They now know a recall process can serve as a watchdog of their performance.

Henry David Thoreau was right in saying that there would never be a free and enlightened State until the State recognized the individual as a higher and independent power, from which all its own power and authority were derived.

Carl Burton

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