As Gov. Arnold Schwarzenegger and legislators confront a projected $15.2 billion budget deficit and weigh whether to impose new taxes to close it, local governments throughout California are contemplating a wide array of new taxes to close their shortfalls or expand local services and facilities.
The most ambitious of the local tax schemes may be the Santa Clara Unified School District's plans to impose a $30,000 tax on each new house in a north San Jose development, subject to approval by voters, plus much-smaller parcel taxes on existing homeowners, to finance school programs.
But the controversial Santa Clara Unified levy is just one of dozens of local levies in the works, according to a compilation by the California Taxpayers Association, including a $36 annual parcel tax in Los Angeles for anti-gang programs and a $106 per year parcel tax in Oakland (later growing to $266) for crime prevention.
A proposed sales tax to go for gang suppression was narrowly defeated by the Sacramento City Council.
Los Angeles Mayor Antonio Villaraigosa wants a new sales tax to finance transportation in his city, and 400 miles to the north, a quarter-cent sales tax boost will be placed before voters in Marin and Sonoma counties to finance commuter rail service.
All of the local taxes must survive Proposition 218, a measure approved by voters as a follow-up to Proposition 13 that raises the voting threshold for local taxes that are used for general purposes, such as the proposed Santa Clara tax for schools.
That hurdle was driven home in a Supreme Court decision last month that invalidated another Santa Clara County tax, a property assessment imposed by the Santa Clara County Open Space Authority in 2001 to finance expansion.
The assessment violated Proposition 218 because it failed to connect the revenue being collected to specific public improvements, the court said in a ruling that contained this somewhat acidic observation: "An assessment calculation that works backward by starting with an amount taxpayers are likely to pay, and then determined an annual spending budget based thereon, does not comply with the law governing assessments, either before or after Proposition 218."
The Santa Clara County Open Space Authority must now decide what to do with the $56 million it collected illegally. And the court's decision put the brakes on a plan in Oakland to impose a property assessment for landscaping and street light improvements. Oakland's lawyers concluded that it would have a difficult time passing legal muster under the Supreme Court's decision.
Wrangling in the Capitol over a Democratic plan to boost state taxes by more than $8 billion to close the state's budget deficit and increasing political and legal battles over local taxes indicate that we may be nearing a climactic point in our seemingly endless political debate over what we want from government and how much we're willing to pay for it.
Call The Bee's Dan Walters, (916) 321-1195. Back columns, www.sacbee.com/walters.
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