AB2170 could boost local taxes
May 9, 2014 - By Dave Roberts
A majority of Californians would rather have lower taxes and fewer government services than higher taxes and more government services, according to a recent Field poll. But the drive for higher taxes and more government services continues unabated in Sacramento.
The Assembly Committee on Local Government recently passed Assembly Bill 2170, which would help local governments, acting as joint powers authorities, increase taxes and fees. Assemblyman Kevin Mullin, D-San Mateo, introduced the bill to the committee.
The committee vote was 7-2, with Chairman Katcho Achadjian, R-San Luis Obispo, joined the committee Democrats in support. Two other Republicans voted against it.
On April 28, the full Assembly approved the bill, 44-26, and sent it to the Senate. Curiously, on this vote Achadjian switched and voted nay. On May 8, the bill was assigned to the Senate Rules committee.
“AB2170 would clarify that all JPAs are able to raise revenue for projects consistent with the purposes for which the agency was formed,” Mullin said. “Most believe that existing law provides such authority to these JPAs. However, some attorneys and local officials worry that the law may not be precise enough.
“This bill does nothing to diminish vote requirements in Propositions 13 or 218. AB2170 simply provides that the parties to a JPA may exercise any power common to the contracting parties – including, but not limited to, the authority to levy a fee or a tax.”
Prop. 13 requires two-thirds voter approval when local governments seek to raise taxes for a designated or special purpose. Prop. 218 guarantees the right to vote on all local taxes, assessments and property-related fees.
Taxpayer and business groups consider AB2170 redundant.
“Cities, counties and many special districts already possess the revenue tools to fund local programs, making this bill’s authorization unnecessary,” argued the California Taxpayers Association and the California Chamber of Commerce in a joint letter to the Assembly on April 16.
They cited the example of San Mateo’s JPA, the City/County Association of Governments of San Mateo County, seeking to impose a stormwater tax. But residents are already paying for that service through a vehicle registration fee, special assessments and general fund revenue, according to the letter.
“Under current law, if a local government determines that funding is not sufficient to finance its needs, there are other options,” the letter said. “For example, in December 2010, the former Senate Local Government Committee published a report titled ‘Revenues and Responsibilities: An Inventory of Local Tax Powers,’ which stated that counties and other local governments currently have the statutory authority to impose special taxes and property-related assessments.”
Possible tax gerrymandering
The California Taxpayers Association’s May 2 newsletter voiced concern “that under the provisions of the bill, there would be gerrymandering of tax votes. A local agency that is unable to secure enough votes for a tax would join with another agency in an area where voters historically have provided large margins of approval for tax measures.
“The combined vote in favor would result in the imposition of the tax in the jurisdiction where the voters do not favor a tax increase. This also could work in reverse – after a countywide vote in which there aren’t enough votes to approve a tax proposal, a joint powers authority could be formed with just those jurisdictions that voted in favor.
“Another question raised by the legislation is whether two agencies combined in a joint powers authority would be authorized to impose a tax that one of the agencies is not permitted to impose by itself?”
Also opposed is the Howard Jarvis Taxpayers Association.
“AB2170 would give JPAs the authority to levy a fee or tax,” the HJTA stated in a letter to the Assembly, according to the legislative analysis. “Currently, it is an open legal question whether JPA’s have the authority to do this, even if they follow the appropriate constitutional guidelines specified under Propositions 13 and 218.
“While AB2170 would clarify this question, we believe it is unnecessary. Local government entities do not need new revenue generating authority. They can either approve a special tax with a two-thirds vote, or a Proposition 218 fee or assessment with a majority vote of the affected property owners.”
“The law governing joint powers authorities has always allowed the contracting parties to exercise any common powers, as long as they are specified in the joint powers agreement; therefore, the statement that the bill is declaratory of existing law is important.
“This bill would clarify current law so that there could be no doubt that this authority extends to the imposition of fees and taxes.
“Joint powers authorities are an important part of California governance, and it is helpful to clarify the law to ensure a common understanding of existing joint powers authority powers to levy fees or taxes.”
Another JPA empowerment bill is making its way through the Legislature. AB2046 authorizes California JPAs to issue bonds and enter into loan agreements to finance or refinance private projects located outside the state. It’s being amended in the Assembly Local Government Committee.