Did L.A. County wrongly promote a tax hike? It’ll pay hefty $1.35 million to settle claims

Los Angeles County has agreed to pay a $1.35 million settlement to resolve a complaint charging that it misused government funds to promote a 2017 sales tax increase, marking one of the largest-ever financial penalties considered by California’s Fair Political Practices Commission.

The Fair Political Practices Commission, California’s campaign finance watchdog, is expected to discuss the settlement at its Thursday meeting. The agreement would close the agency’s investigation into the sales tax campaign and resolve a civil lawsuit filed by the Howard Jarvis Taxpayers Association.

The county’s potential penalties are even greater if the commission rejects the settlement. It faces up to $2.4 million in penalties stemming from money the county spent promoting the sales tax increase without reporting it as a political contribution, according to the commission.

The settlement is among the most expensive campaign finance enforcement actions the commission has ever considered.

In 2013, the FPPC levied a $1 million penalty against a pair of political organizations connected to conservative billionaires Charles and David Koch.

The Los Angeles County settlement centers on Measure H, a quarter-percent county sales tax increase aimed at funding homeless services and prevention, on the March 7, 2017 Special Election ballot.

The Los Angeles County Board of Supervisors put the measure on the ballot and hired the strategic communications firm TBWB with a nearly $1 million contract to promote it through a public education campaign and advertising.

Commercials for the campaign included the slogan “Real help. Lasting Change.” Information about Measure H also ran on Spanish-language radio stations in the Los Angeles area and encouraged listeners to visit an official website to get more information.

The measure is expected to produce $3.55 billion in tax revenue over ten years. It received 69.3% of the vote, clearing the two-thirds majority it needed to pass.

On March 1, 2017, the Howard Jarvis Taxpayer Association filed a formal complaint with the FPPC and the County of Los Angeles, according to the settlement agreement. A week later, the FPPC opened its own investigation.

A subsequent lawsuit filed by the Howard Jarvis Taxpayer Association in Los Angeles County Superior Court in 2018 alleged the county violated state campaign finance law by “failing to public report the hundreds-of-thousands of dollars in taxpayer funds it spent on its political campaign supporting Measure H.”

The lawsuit also alleged the spending violated a provision in the state constitution that prohibits government spending on efforts to support or oppose ballot measures.

Jon Coupal, president of the Howard Jarvis Taxpayers Association, said the settlement agreement should turn heads. The taxpayer group often challenges sales tax measures.

“We want local governments to understand what the law is on this kind of activity and that’s ultimately our goal,” Coupal said.

The settlement agreement states the county “believes that it complied with the law and denies that it violated the law in any respect.” The settlement agreement states the settlement shall not be considered an admission of liability.

“The county is pleased to resolve this matter so we can continue to focus on the health and safety of the people of Los Angeles county,” according to statement from the County of Los Angeles’ Office of Countywide Communications. “The settlement documents fully contain the county’s position on the issues involved in this case.”

This story was originally published August 19, 2020 at 11:02 AM.