The California Taxpayers Association (CalTax) published a list of 231 local tax and bond measures that will appear on the March 3 presidential primary ballot.
“The number of measures marks a 165 percent increase over the last presidential primary,” CalTax says. “In June 2016, voters were presented with 87 local tax and bond measures, and approved 67.”
According to CalTax data, local measures statewide include 119 school bonds (which would be repaid with interest through property tax increases), 52 parcel taxes, 44 sales tax measures and two advisory measures asking voters to decide if revenue should be spent in a specific way if an accompanying tax increase is approved.
Some of the measures require a voter threshold of two-thirds to pass, the overwhelming majority requires a voter approval of 55 percent.
“Advisory measures carry no legal weight, but are used by tax proponents as a campaign tactic – allowing them to campaign for a tax as a way to fund a special purpose (often public safety) without triggering the two-thirds vote requirement for special taxes. If the underlying majority-vote tax is approved, revenue will go into the general fund, where it can be used for any purpose,” CalTax says.
Craig Alexander of the Californian Policy Institute argues the taxes mask an underlying problem statewide: unfunded pension and healthcare liabilities.
“The costs of public employee compensation, especially pension and retiree-medical benefits, continue to climb exponentially and are consuming ever-larger portions of local general-fund budgets,” Alexander says. “Instead of addressing this well-documented problem, state and local leaders have relied on a tried-and-true method: asking local taxpayers to increase taxes on themselves.”
According to the Chicago-based non-profit education organization, Truth in Accounting (TIA), “Unfunded retirement liabilities are the main contributing factor to the $323 billion in city-level debt.”
In its latest fiscal analysis of the 75 largest cities in the U.S., TIA grades cities and states according to how they balanced their respective budgets, whether or not officials include the true costs of the government in their budgets, among other measures.
TIA ranks each city based on its taxpayer burden or taxpayer surplus. A taxpayer burden is the amount of money each taxpayer would have to contribute to pay all of its city’s accumulated debt to date. Conversely, a taxpayer surplus is the amount of money left over after all of a city’s bills are paid, divided by the estimated number of taxpayers in the city.
California cities in the worst fiscal trouble are San Jose, which ranked 55th out of 75; followed by San Francisco ranking 67th; and Oakland, ranking 70th. Faring better were Chula Vista ranking 27th, Riverside (30th), Los Angeles (35th), San Diego (37th), Sacramento (38th), and Santa Ana (43rd).
Oakland, the California city in the worst financial shape according to the report, earned a D grade for having a debt burden of $2.6 billion, equating to $18,600 for every city taxpayer. Of the $6.4 billion in retirement benefits promised, the report notes, $1.9 billion in pension and $949.3 million in retiree health care benefits remain unfunded.
“Local governments and school districts always tout these measures as necessary expenditures to rebuild crumbling schools, maintain overused parks and provide better police services, but don’t be fooled,” Alexander warns. “Every new local tax these days is, essentially, a pension tax. These governments write the ballot summaries and provide ‘voter information,’ so they are able to sway the discussion away from the true causes of their fiscal peril.”