Reform group wants higher taxes

March 24, 2010

By KATY GRIMES

At a hearing Tuesday in the Improving the State Committee, the new “bipartisan” group, California Forward, made another heartfelt appeal to legislators for support of what is supposed to be something everyone can believe in: Higher taxes and abolishment of the two-thirds vote required for raising taxes.

Claiming its mission “is to improve the quality of life for all Californians by creating more responsive, representative and cost-effective government,” Bob Hertzberg, former Democratic Assembly leader and California Forward co-chairman, gave an impassioned speech to legislators about the need to “reinvent our state.” Hertzberg insisted that “California is not failing; our successes are giving us the challenges.”

Quoting a speaker he heard at a conference over the weekend, Hertzberg said,  “We are the leaders we have been waiting for.”

Visiting the California Forward Web site, it’s easy to discern that this is not a “bipartisan” group. The staff and leadership are comprised of Democratic politicians, Democratic campaigners and many Democratic Party regulars.

In my CalWatchdog story, “California Forward or Backward?,” I gave the background of California Forward and the questionable “bipartisan” mission, even with the word “reforms” used generously and regularly.

Bipartisan involvement seems limited. Assemblyman Roger Niello, R-Fair Oaks, is extensively quoted on the California Forward Web site, but makes it clear that he supports more local government support. Republican Bruce McPherson, former Secretary of State, spoke at the Tuesday hearing complaining about California’s broken budget system. However, McPherson is described in his California Forward bio as “a moderate and nonpartisan office holder” – hardly representative of a party-line Republican.

Democrat and former Sacramento Mayor Heather Fargo is on the list of consultants, as is fellow Democrat and former Gary Hart campaign manager Steven Weiss, and Ryan Rauzon is the former deputy press secretary to Democratic Assembly Speakers Hertzberg and Herb Wesson. On the staff is Zabrea Valentine, former aid to Democratic U.S. Senate Majority Leader Tom Daschle, and National Democratic Institute employee. Sunne Wright McPeak, a Democrat, is the former state secretary of business and is listed as part of the California Forward leadership team. Robert Balgenorth is president of the California AFL-CIO State Building and Construction Trades Council and is the number three man on the leadership team, as is Bill Hauck, former chief of staff for Gov. Pete Wilson. The list of staff, consultants and leadership is available here: Leadership.

California Forward has been pushing issues such as the Community Funding Protection and Accountability Act of 2010. Counties that adopt a “Countywide Strategic Action Plan” may increase the local sales and use tax rate by up to 1 cent upon approval by a simple majority of the voters, even though the increase qualifies as a special tax requiring two-thirds voter approval. Half of the tax proceeds would be allocated to school districts and the remainder allocated to the Countywide Strategic Action Plan.

Besides using the simple majority vote on a tax increase, this measure undermines taxpayer protection — the very spirit of Proposition 13, as well as Propositions 62 and 218 and the decision in the Guardino case (Santa Clara County Local Transportation Authority v. Guardino), which unequivocally demands that a two-thirds majority vote is required to increase special taxes.

The measure makes local governments less accountable, and limits voter oversight and input into how tax proceeds are spent. Voters will not get an opportunity to approve the Countywide Strategic Action Plan or provide input on how tax proceeds will be allocated among the county agencies, and are only allowed to vote on whether or not to increase taxes leaving county boards of supervisors and local agencies to decide how to spend the money. The measure raises one of the already highest sales and use tax rates in the nation to an even higher level.

The LAO wrote:

“Under this measure, (1) cities, counties, and schools would have higher and more stable revenues and (2) state revenues would be lower in some years than otherwise would be the case.

“Higher and More Stable Resources for Local Governments

“This measure would make it easier for voters to approve some countywide sales taxes to support city, county, and school programs, compared to the existing two-thirds vote requirement for special taxes. As a result, counties probably would propose more of these measures and voters probably would approve more of them.

“However, the LAO also recognized the downside of the majority vote to increase taxes: ‘California’s 2004 election illustrates the potential effect of setting a majority vote threshold for new sales taxes. During that year, local governments proposed 48 sales tax increases for special purposes. Voters approved one-third of them. If the voter approval threshold for these taxes had been 50 percent, over half of these taxes would have been approved.”

Overall, the LAO predicts that the measure would have “major increases” of more than $1 billion, in annual city, county and school revenues and spending, depending on local voter approval of future tax proposals.

California Forward claims that the purpose of the Community Funding Protection and Accountability Act of 2010 is “To promote efficiency, effectiveness, and accountability in local government,” by reducing the two-thirds vote to pass taxes to a simple majority vote.

David Wolfe, Legislative Analyst with the Howard Jarvis Taxpayers Association said while they like the transparency issues California Forward has, the group opposes any attempt to abolish the two-thirds vote requirement for passage of California’s budget or local taxes and fees. Jon Coupal, President of HJTA added, “This proposal repeals an important provision of Prop 13 by attempting to characterize a tax intended for specific purposes as a “general tax.” The sole motivation behind this is to permit this special tax to be approved with less than a two-thirds vote as currently required by Section 4 of Article XIIIA. (Article XIIIA is Prop 13).