Joel Fox: Connecting the dots on fights over tax policy in California

Connecting dots to create a picture is a children’s game that needs to be played by adults to see the big picture when contemplating votes on different public policy measures. That is because political maneuvering involving separate policy measures is employed to have taxpayers open their wallets when they don’t always see how one measure connects to another.

Consider the multiple efforts to attack the homelessness issue.

Proposition 1 on the March ballot was hailed by proponents, especially by Gov. Gavin Newsom, as a way to address homelessness. The $6.4 billion bond barely passed with 50.2% of the vote. One of the objections to Prop. 1 was that the state would take control of some local revenues already designated to deal with homelessness.

Whether the state can do a better job on homelessness than local governments is a valid question. After the March election, a state audit was issued that castigated state spending on homeless programs as failing to track the spending of billions of dollars or to appropriately measure results of the spending.

That the audit was released after the election deserves an investigation. Unfortunately, such tactics are standard gamesmanship to entice voters to support more taxes.

But back to connecting the dots. Now that Proposition 1 clears the way for the state to control some homeless funds, along comes an effort to raise local sales taxes in Los Angeles on a permanent basis for homeless relief. While the effort to gather signatures to put the tax increase on the ballot as an initiative began prior to the recent election, the fact that the state absconded with homeless funds will become part of the pitch to pass the tax.

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The effort to raise taxes for homeless services in Los Angeles comes after bond HHH passed in 2016 and tax Measure H was passed by voters in 2017 to deal with homelessness. Yet, despite millions of dollars, the homeless count in both the city and county increased about 10-percent in last year’s tally.

To add another twist to get more homeless funding, the sales tax increase initiative is fronted by civic groups rather than being forwarded by government bodies as Measures H and HHH had been. The reason is that a California Supreme Court decision claimed that the Proposition 13 requirement to pass a tax for a special purpose with a two-thirds vote only applies to government bodies, not to a citizen’s initiative. The proposed special purpose sales tax would need only a majority vote.

Expect another example soon. With Los Angeles voters supporting Measure ULA to reform roads in the last election at a steep cost, we are now hearing from the city’s Chief Administrative Officer that because of budget shortfalls, partly caused by ULA, tax increases may be needed.

Without connecting the dots, citizens are asked to deal with these measures as stand-alone solutions. However, there is a way for voters to take some power over the big picture and have a say in seemingly unconnected activity.

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Qualified for the November ballot is the Taxpayer Protection and Government Accountability Act (TPA). If passed, the measure will restate that special local taxes require a two-thirds vote and that voters have a final say on taxes passed by the legislature. In addition, it would require that some majority-vote special tax measures that pass before voters make their decision on TPA can be reconsidered by voters such as the proposed LA sales tax increase.

Of course, supporters of tax increases are dead set against TPA and don’t want voters to have a chance to approve it. They have petitioned the California Supreme Court to throw the proposition off the November ballot. The Court has yet to decide.

No one should be surprised at this latest twist in the strategy to gather more tax revenue.

Just connect the dots.

Joel Fox is an adjunct professor at Pepperdine University’s Graduate School of Public Policy. Previously, he served as president of the Howard Jarvis Taxpayers Association and as editor and co-publisher of the California political and business blog Fox and Hounds Daily. 

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