Press Room: SVTA in the News

Media inquiries:  Phone 408-279-5000 or e-mail info@SVTaxpayers.org.  


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Mar. 26, 2013

KNTV - NBC Bay Area

San Jose turns to incentives to keep Samsung in Silicon Valley


Kris Sanchez reporting.



(This video is available at the Web site of KNTV, here.)

You've got to give to get -- that seems to be the philosophy the city of San Jose is following in giving up some tax revenue to keep Samsung from growing its facility in Texas instead of here in the Bay Area. Kris Sanchez reports.





Mar. 6, 2013

San Jose Mercury News

San Jose council votes to explore new road taxes

By John Woolfolk



(This article is also available at the Web site of San Jose Mercury News, here.)

SAN JOSE -- Facing grim reports of deteriorating roads, the San Jose City Council voted unanimously to explore a raft of new tax and bond measures next year.

The council also voted 9-2 to encourage state lawmakers to lower the required approval threshold for tax measures dedicated to transportation needs from two-thirds to 55 percent. Councilmen Pete Constant and Johnny Khamis were opposed.

"The current condition of our roads is just unacceptable," said Vice Mayor Madison Nguyen.

But some of the few public speakers who attended the afternoon council meeting -- which was interrupted by a power outage -- urged restraint on new taxes, especially after council members noted they also are considering renewal of a library bond measure and possibly a public safety bond.

Ken Kelly, who is chairman of the United Neighborhoods of Santa Clara County, a coalition of neighborhood and home-owner associations, said city residents already are facing rising taxes after November votes to increase the state and county sales tax and extend a water district parcel tax.

"Tax fatigue," Kelly said, "is something you need to keep in mind."

San Jose fell behind on road maintenance over a decade of budget shortfalls brought on by employee pay and benefit costs outpacing revenue growth. To city leaders, keeping cops, firefighters and librarians on the job was a higher priority than maintaining streets...


...Read the rest of the article, here.





Mar. 5, 2013

Palo Alto Patch

Santa Clara County Officials Stand By Decision to Fund Gun Buyback

Despite drawing criticism for using taxpayer dollars, Santa Clara County officials are convinced that gun buybacks are worth the cost.

By Dominic Fracassa



(This article is also available at the Web site of Palo Alto Patch, here.)

Santa Clara County officials are standing by their decision to use $160,000 in county funds to finance a gun buyback that took place Saturday, March 2nd.

Like many of the gun buybacks springing up across the Bay Area, the event was publicized as a way for anyone, not just county residents, to get of unwanted firearms in exchange for cash, no questions asked.

Several community groups, including the Golden State 2nd Amendment Council and the Silicon Valley Taxpayers Association, picketed the event to protest the county’s sponsorship of it. Santa Clara County supervisors allocated $150,000 to buy back the roughly 1100 weapons collected; the District Attorney’s office contributed $10,000.


...Read the rest of the article, here.




Mar. 4, 2013

Inside Bay Area

Santa Clara County judge allows Valley Water District's $543 million tax to stand, despite technical glitches

By Paul Rogers



(This article is also available at the Web site of Inside Bay Area, here.)

Close is good enough.

That's the ruling from a judge who has rejected a lawsuit by a taxpayers' group that sought to overturn a $543 million parcel tax approved by voters in November on the grounds that the Santa Clara Valley Water District didn't provide 24 hours' notice for a meeting to place the item on the ballot.

Instead, the district, a government agency based in San Jose, provided 23 hours of public notice in posting the agenda of its Aug. 8 board meeting. California's open meetings law, known as the Brown Act, requires a minimum of 24 hours.

Nevertheless, the mistake was "a mere technical deficiency," said Santa Clara County Judge Kevin McKenney, and does not overturn the results of the election.

"Even with this slight deviation from the statute, the objectives of the Brown Act are served in giving sufficient notice of the special meeting to allow public participation," wrote McKenney, in his decision filed Feb. 11. "To find otherwise would be placing form over substance."

The ruling came as a major victory for the water district, which provides flood control and drinking water for 1.8 million Santa Clara County residents.

"We're pleased. This finally puts it to bed," said water district spokesman Marty Grimes. "We can continue to go forward with the Clean, Safe Creeks program that the voters supported. It's good news."

Santa Clara County voters approved the program, Measure B, by a 74-26 percent margin. The measure continues an existing parcel tax for another 15 years, for flood control, dam upgrades and other projects. The tax currently costs $54 a home and will increase by up to 3 percent a year.

Opponents, led by the Silicon Valley Taxpayers Association, argued that the water district has wasted public money in recent years on high salaries, rich benefits and questionable projects, from hiking trails to a $1.4 million gazebo in Alviso. The group said it is disappointed by the judge's ruling, and has not decided yet whether to appeal.

"Clearly, the deck is stacked against us," said Mark Hinkle, president of the Silicon Valley Taxpayers Association. "Twenty-four hours means 24 hours. In what world does 24 hours not mean 24 hours? In the government world, I guess."...

...Read the rest of the article, here.





Mar. 3, 2013

Los Gatos Patch

Hundreds of Weapons Collected in County Gun Buyback Program

Event at San Jose's fairgrounds is said to be the largest cash-funded gun buyback in county history, dispersing more than $150,000 in cash for firearms.

By Sheila Sanchez



(This article is also available at the Web site of Los Gatos Patch, here.)

More than 1,110 shotguns, rifles, pistols, revolvers, handguns, assault automatic and semiautomatic weapons were turned over to sheriff's authorities for between $100 and $200 during Saturday's Santa Clara County gun buyback event at the fairgrounds in San Jose.

A long line of cars began forming as early as 5 a.m. on Umbarger Road to enter the fairgrounds and turn in the firearms to volunteers who manned six stations and assisted each driver with the anonymous transaction.

They were greeted at the gate, however, by protesters from the Golden State Second Amendment Council and the Silicon Valley Taxpayers Association who complained the $160,000 used by the Santa Clara County Board of Supervisors to hold the program was a waste of taxpayers' dollars.

"This is a monumental waste of taxpayers' money," said Mark W.A. Hinkle, one of the protesters holding a picket sign that said, "Legal gun sales through gun shops pay much more."....

...Read the rest of the article, here.




Dec. 12, 2012

San Jose Mercury News

Santa Clara County School Board sues ex-superintendent over condo loan

By Sharon Noguchi

 


(This article is also available at the Web site of San Jose Mercury News, here. )

Seeking to recoup almost $1 million in taxpayer funds, the Santa Clara County Board of Education has sued ex-Superintendent Charles Weis, who walked away from the luxury San Jose condo he bought with a loan from the board.

When Weis retired in June, he said the condo was worth less than the $890,000 he paid in 2008 when he was hired, and he sought to hand the title to the school board. Under the terms of a loan from the board, he wasn't required to make any payments until he left office or stopped using the downtown condo as his primary residence. But the seven-member board said no thanks and instead tried to negotiate with Weis.

"The board was not eager to file suit," preferring instead to settle, board President Joseph Di Salvo said. But because talks failed, he said, on Tuesday the board filed a "judicial foreclosure" suit in Santa Clara County Superior Court. The suit seeks to reclaim $952,409.69 that the county board alleges Weis owes as of Nov. 20, plus interest after that date of $34.11 daily. The board also alleges Weis failed to pay taxes, insurance and fees on the condo and that he removed light fixtures and ceiling fans when he moved out at the end of June.

According to the lawsuit, Weis has made only one interest payment of $15,562.50 on the loan to the Santa Clara County Office of Education.

Messages left for Weis...were not returned.

But it's not clear that the suit will be successful. ....

...Read the rest of the article, here.






Nov. 7, 2012

San Jose Mercury News

Santa Clara County voters embrace Measure A sales tax

by John Woolfolk

 


(This article is also available at the Web site of San Jose Mercury News, here.)

Santa Clara County voters approved a sales tax measure for county programs Tuesday. The margin for approval had changed little throughout the evening.

Santa Clara County's Measure A calls for a one-eighth-cent sales tax increase for 10 years, which would raise about $50 million annually for county programs including Santa Clara Valley Medical Center and public health and welfare.

Backers had argued it was a modest request to bolster health and safety programs after years of budget cutbacks. Supporters, led by the VMC Foundation and the Santa Clara Family Health Foundation, raised more than $660,688 toward the measure's passage.

There was no organized opposition campaign.

But critics including the Silicon Valley Taxpayers Association had argued the additional tax money would merely be wasted on overly generous government retirement packages and would not necessarily improve health and other county programs.....

...Read the rest of the article, here.




Nov. 5, 2012

San Jose Mercury News

Minimum wage hike would destroy San Jose jobs

By Jim Cox and John Roeder

 


(This article is also available at the Web site of San Jose Mercury Newshere.)

If San Jose voters approve Measure D, the proposed 25 percent increase to the minimum wage, they will be destroying entry-level jobs.

 

Maybe he wants an internship, or she's juggling partundefinedtime work while taking classes, or he hopes to grow his skills on the job. Either way, the hike from $8 per hour to $10 per hour would mean that a job seeker whose labor is currently worth $8.34 or $9.07 or $9.62 would not get that vital first job offer.

 

A minimum-wage law mandates only the wage. It does not -- indeed, cannot -- mandate that anyone will actually be awarded a job at that wage.

 

Rather than finding employment and opportunities to get their foot in the door, these individuals will face rejection and frustration. Unemployment these past four years has been tough enough, at 7.8 percent and higher, nationally; 10.2 percent in California; and 8.5 percent in the San Jose area. Furthermore, the Bureau of Labor Statistics reports that an alarming 23.7 percent of 16- to 19-year-olds are unemployed.

 

Measure D would only make matters worse.

The economics are simple: More of anything -- including labor -- is demanded when it is available at a lower price, while less of anything is demanded at a higher price. So at higher prices, demand for workers would drop; they'd be left out of the job market, forced to find their way through other means....

...Read the rest of the article, here.


Nov. 2, 2012

ABC 7 KGO TV SAN FRANCISCO, CA

Cal reaches out to low-income high school students

By Lyanne Melendez 


(This report is also available at the Web site of ABC 7 KGO TV, here.)


SAN JOSE, Calif. (KGO) -- UC Berkeley Chancellor Robert Brigeneau was at a high school in San Jose Friday to promote his university. The goal was to connect with students from low-income communities to make sure they know, if they get in, the financial resources will be there. 

...

While Birgeneau promises financial opportunities for many students, he worries about the UC system and the many cuts Sacramento has made.

"When I started as chancellor at Berkeley the state provided 30 percent of our budget and now they provide 11 percent and this is in a very short length of time and so it's been extraordinarily challenging," he said.

The Prop 30 tax measure would guarantee no further cuts to the UC system and other state colleges, but opponents say it's misguided.

"So while some may say ok we'll just raise taxes a few more times and we'll take it from these billionaires, we'll take what they have and that will fix it and it will cover a couple of years, we will be back to where we are today but the gap will be even larger," Silicon Valley Taxpayers Association spokesperson Greg Coladonato said.

Prop 30 has been slipping in the polls. As of Thursday, 48 percent of those asked said they would support the tax measure, but 14 percent remain undecided. 


...Read the rest of the report, here.




Oct. 27, 2012

THE WALL STREET JOURNAL

Voters Decide How Much to Pay and Who Will Be Next to Lead

Initiatives Across the Region Seek More Money From Taxpayers to Fund Even Basic Services

By Bobby White

 


(This article is also available at the Web site of The Wall Street Journal, here.)

On Nov. 6, Bay Area voters will encounter a common theme on the ballot: requests for more money.

More than five years into a cycle of lower property-tax revenue, due to the housing bust, many cities in the region are again turning to residents to raise money. But in contrast to previous years, many of the initiatives are designed to pay for essential services such as firefighting and police rather than community enhancements.

"Local government is facing intense pressure to find new revenue," says Michael Coleman, a fiscal policy consultant with the California League of Cities, a lobbying organization based in Sacramento. "They're getting squeezed."

In the Bay Area, there are nearly three dozen tax measures on the ballot, out of a statewide tally of about 300 revenue-raising proposals and 100 bond measures from schools and community colleges. Requests are coming from nearly every kind of municipal bodyundefinedschools, service districts, cities and countiesundefinedamid escalating pension costs and declines in other tax revenue.

Critics say the tax initiatives force residents to pit local and state measures against one another. "Residents have a limited amount of money to address state and local issues, and when they face multiple ballot measures they can sometimes be overwhelmed," says Jon Coupal, president of the Howard Jarvis Taxpayers Association....

 

...Read more of the article, here.





Oct. 27, 2012

Peninsula Press

Facing deficit, Menlo Park counts on hotel tax increase undefined in advance of vote

By Xiaohuo Cui

 


(This article is also available at the Web site of Peninsula Press, here.)

The fate of a ballot measure that would increase a tax on hotel rooms will determine whether the city of Menlo Park can close its budget deficit without deep cuts to government services, city officials say.

 

But opponents of Measure K, such as the Silicon Valley Taxpayers Association, say that raising the Transient Occupancy Tax from 10 percent to 12 percent would further weaken Menlo Park economically.

 

Menlo Park is facing a $1.7 million deficit this fiscal year, according to city finance officials. They cite the loss of redevelopment funds as the primary culprit, in the aftermath of a state Supreme Court decision upholding a 2011 law that dissolved California’s redevelopment agencies. The proposed hotel tax increase would not recover all of the lost money, but it would “certainly take much of the pressure off,” said City Council member Richard Cline, a former mayor.

 

In adopting the current budget plan, the council factored in the $580,000 that a hotel tax hike is projected to generate annually. If the measure is defeated on Nov. 6, according to city officials, the council would have to look at funding cuts to the police department and to programs that help schoolchildren and senior citizens.

 

...Read the rest of the article, here.


Oct. 7, 2012

Santa Cruz Good Times

Good on Paper?

Proposition 32 promises campaign finance reform, but is there a catch?

By Patrick Dwire


 

(This article is also available at the Web site of Good Times, here.) 

If you liked the Citizens United Supreme Court decision--which recognized corporate “personhood” and equated money with free speech--in California labor unions are saying you’re also bound to like Proposition 32. But unions aren’t the only forces coming out against Prop. 32, or the “Political Contributions by Payroll Deduction, Contributions to Candidates Initiative.” Two of the state’s leading, nonpartisan government reform groups, the League of Women Voters and Common Cause, say Prop. 32 is a “deceptive measure” that will greatly expand the political influence of one particular interest group: large businesses and corporations.

If passed, the measure would forbid labor unions, corporations, and government contractors from using payroll deductions to raise money for political purposes. It would also prohibit them from making direct contributions to candidates and candidates' committees. According to Paul Johnston, former executive director of the Monterey Bay Central Labor Council and a long time member of the American Federation of Teachers, the initiative looks like across-the-board campaign finance reform, but there’s a catch....

...Read the rest of the article here.



Oct. 16, 2012

KCBS Radio 740 AM

Santa Clara County's Measure A

Matt Bigler reporting.

 

(This broadcast may also become available at the Web site of KCBS, here.) 


Matt Bigler interviewed Dave Cortese on the "pro" side, and SVTA's board member, Greg Coladonato on the "con" side. 



Oct. 7, 2012

San Jose Mercury News

Water district's tax proposal gets support from Saratoga council

By John Woolfolk


 

(This article is also available at the Web site of San Jose Mercury News, here.) 

Santa Clara County officials last asked for a general sales tax increase in June 2006, going large with a half-cent, 30-year tax measure and getting spanked with 57-percent voter rejection.

On Nov. 6, county officials will try again, this time with a more modest request in a sputtering economy. Measure A would impose a one-eighth-cent general sales tax that would raise up to $50 million annually over 10 years for various county programs including the public hospital, law enforcement and road improvements.

"An eighth of a penny isn't too much to ask," said Chris Wilder, executive director of the VMC Foundation, a nonprofit that raises about $10 million annually to support Santa Clara Valley Medical Center and other health programs. "The county has done a pretty good job of cutting and combining services and using technology to be more efficient. At a certain point if we want to maintain health and safety in the county, we have to pay for it."

Measure A critics include the Silicon Valley Taxpayers Association and San Jose Silicon Valley Chamber of Commerce who argue the extra taxes will just be gobbled up by rising costs for generous government pensions and the increase will make the county a high-cost place to shop and do business.

 "The county has not worked to reduce their own expenses as diligently as they should have," said John Roeder, president of the Silicon Valley Taxpayers' Association....

...Read the rest of the article here.




 Sept. 25, 2012

San Jose Mercury News


Water district's tax proposal gets support from Saratoga council

By Brian Babcock


September 25, 2012


 


(This article is also available at the Web site of San Jose Mercury News, here.) 


The Saratoga City Council's support for the Santa Clara Valley Water District's proposed parcel tax hasn't dried up just yet.

Council members, in a 4-1 vote, reiterated their support for the district's Safe, Clean Water and Natural Flood Protection Plan measure at a meeting on Sept. 20. Councilwoman Emily Lo cast the lone dissenting vote.

The council had adopted a resolution in support of the proposed Measure B in June. But council members asked that the topic be brought back up to possibly rescind its support.

The water district has been drowning in criticism over the past couple of months. The increased scrutiny began last month due to a two-word error, along with an incorrect date, that almost cost the proposed parcel tax extension its place on the November ballot.

The Silicon Valley Taxpayers Association filed a lawsuit against the water district, claiming the district board violated the state's open meetings law when it held a special meeting last month to fix the two-word error in the ballot....

...Read the rest of the article here





 Sept. 24, 2012

Saratoga News

Voters asked to approve sales tax increase

By Khalida Sarwari

 


(This article is also available at the Web site of Saratoga News, here.) 


Some say it will save the county's most essential services, while others say it wouldn't be fair to impose upon taxpayers who are already financially burdened.

On Nov. 6, voters will go to the polls to consider Measure A, an ordinance that, if passed by majority approval, would increase the sales tax by one-eighth cent, upping the local tax rate from 8.375 percent to 8.5 percent.

Measure A is a general sales tax that would apply to most retail sales in the county. The money from the tax would fund law enforcement and public safety, trauma and emergency room services and health coverage for low-income children. The revenue would also fund economic development and job creation, housing for the homeless and programs to help students stay in school.

To pass, the measure requires approval by a majority of the votes cast in the county.

Opponents of the ordinance, such as the Silicon Valley Taxpayers Association, have said that taxpayers should not have to bear responsibility for the county's "spending problem."

Brian Holtz, president of the Purissima Hills Water District, said he supports the SVTA's position that Measure A violates Prop 218....”

...Read the rest of the article here.




 Sept. 19, 2012

CBS 5

Ex-South Bay Superintendent Looks At Unloading Condo To Taxpayers

Len Ramirez reporting

 


(This article and video are also available at the Web site of CBS TV, here.) 


SAN JOSE (CBS 5) undefined A luxury condominium in Downtown San Jose belonging to retired Santa Clara County superintendent Dr. Charles Weis is at the center of a debate that could cost taxpayers.

In 2008, Weis purchased the 18th floor luxury penthouse at the Axis building for $980,000. The Santa Clara County Office of Education lent Weis $915,000 as an incentive to relocate to San Jose from Ventura County.

But soon after Weis bought the condo, the real estate market tanked. Weis recently retired and moved back to Southern California.

 

Facing a deadline to pay off the loan, Weis is now asking county education officials to take back the property, which is valued $300,000 – $400,000 less than he paid for it.

“This is another bailout,” said Mark Hinkle of the Santa Clara County [i.e., Silicon Valley] Taxpayers’ Association. “The point is that if he had made a profit, we wouldn’t be hearing from him. He’s about to lose some money. He doesn’t want to take responsibility for the economic decision he made and he wants the taxpayers to pick up the tab....”


...See more here.




 Sept. 7, 2012

San Jose Mercury News

Taxpayer group sues Santa Clara Valley Water district over proposed parcel tax

by Paul Rogers

 


(This article is also available at the Web site of the San Jose Mercury News, here.) 


Seeking to nullify a proposed $543 million parcel tax on the November ballot over a two-word clerical error, the Silicon Valley Taxpayers' Association on Friday filed a lawsuit against the Santa Clara Valley Water District.

The taxpayers' association noted in the suit that the water district violated California's open meetings law when it called a special board meeting on Aug. 8 to shorten the text of the tax, known as Measure B, by two words, removing "as" and "No." (as in "number") from the measure.

The 3-minute board meeting was needed because when the water district -- a public agency based in San Jose -- first turned in the text of the measure to Santa Clara County elections office on Aug. 6, it had 77 words. State law only allows 75.

After elections officials notified the district, the agency held a rushed meeting on Aug. 8 to cut the two words. But the district did not post a public agenda on its website, as required by state law, more than 24 hours ahead of time....

...Read the full article by clicking here.




 Sept. 1, 2012

Mountain View Voice

Taxpayer group threatens to sue water district

by Nick Veronin

 


(This article is also available at the Web site of the Mountain View Voice, here.) 


The Silicon Valley Taxpayers Association is threatening to sue the Santa Clara Valley Water District for violating the Brown Act -- a charge that a representative from the public utility said was politically motivated and twists the facts.

In a letter to the public utility, the taxpayers association told the water district that it would consider litigation if the "Safe, Clean Water and Natural Flood Protection" measure -- an extension and increase of the Measure B parcel tax from 2000 -- is not withdrawn from the November ballot.

The SVTA claims that the water district violated the Brown Act when officials there failed to notify the public and local press, as they are required by law to do, a full 24 hours before convening a meeting pertaining to a parcel tax extension proposal.

A representative from the district said that "good faith" efforts were made, and claimed his organization missed the deadline by only about an hour, at most.
...

...Read the full article by clicking here.





 Sept. 1, 2012

San Jose Mercury News

Santa Clara County judge allows county to keep sales tax measure on ballot

by Tracy Seipel

 

(This article is also available at the Web site of the San Jose Mercury News, here.)


SAN JOSE -- A Santa Clara County Superior Court judge Friday handed the county a victory by allowing it to keep an eighth-cent sales tax measure on the Nov. 6 ballot despite protests from a local taxpayers' group.

The Silicon Valley Taxpayers' Association had sought to remove the ballot measure, saying it was illegal under state law because it doesn't coincide with the election of local candidates -- in this case county supervisors -- on the same ballot.

Three supervisors already were elected or re-elected in the June 5 primary.

The county argued that it fully complied with the law and that a disputed section of Proposition 218, a 16-year-old initiative, would limit a local government's ability to ask voters for a tax.

In his three-page ruling, Judge Kevin McKenney wrote that the argument by the association doesn't hold water because the language in question in the proposition "on its face refers only to the type of election for which a tax measure may appear on a ballot. No reference is made ... to a requirement that a candidate for the governing body of the local government actually be on the ballot in order to effectuate compliance.''...

...Read the full article by clicking here.





 August 30, 2012 The Almanac

Hotel tax: Menlo Park challenges ballot language
City fights "misleading" rebuttal argument

by Sandy Brundage
Almanac Staff


 

(This article is also available at the Web site of The Almanac, here.)

Ballot review came to a screeching halt in Menlo Park recently when a perusal of the rebuttal to Measure K, the city's proposal to raise the hotel tax from 10 to 12 percent, lighted upon the following sentence:

"Charging hotel taxes at rates higher than those (in) neighboring cities discourages travel and penalizes businesses that cater to travelers, i.e. restaurants, bars, tourist attractions, etc."

Problem: The hotel tax, otherwise known as the transient occupancy tax (TOT), would match that of neighbors Redwood City, East Palo Alto and Palo Alto if increased.

The Libertarian Party of San Mateo County in coordination with the Silicon Valley Taxpayers Association (SVTA) wrote the rebuttal....

...Read the full article by clicking here.




 August 29, 2012 San Jose Mercury News

Not again: Another error found in Silicon Valley agency's proposed $548 million parcel tax measure

by Paul Rogers


 

(This article is also available at the Web site of the San Jose Mercury News, here.)

Barely a week after a two-word clerical error threatened to derail its $548 million parcel tax set for the November ballot, Silicon Valley's largest water provider has discovered another error in the measure, and scrambled Tuesday to fix it.

The Santa Clara Valley Water District held a hastily called meeting Tuesday afternoon after discovering that the text of its parcel tax, known as Measure B, contains the wrong date.

The legal language that the district turned in to Santa Clara County elections officials on Aug. 8 says the tax for flood control projects, dam maintenance and environmental projects -- if approved by voters -- will be collected "for a total of 15 years," starting July 1, 2013, and ending June 30, 2029.

The trouble is, that's a 16-year period....


...Read the full article by clicking here.






 August 28, 2012 CBS-5 TV

South Bay Water Officials Backtrack From Proposing New Perks

With most politicians supporting pension reforms, members of the Santa Clara Valley Water District considered giving themselves a generous perk.

Ann Notarangelo reports.

(Click here to watch the news report, featuring SVTA President John Roeder, at the Web site of CBS5 San Francisco.)



 



 August 28, 2012 San Jose Mercury News

Santa Clara Valley Water District cuts idea for lifetime medical benefits for board members

by Paul Rogers


 
[This article is also available at the Web site of the San Jose Mercury News, here.]


Two months before it plans to ask voters to approve a $548 million parcel tax, Silicon Valley's largest water provider is exploring a proposal to give its part-time board members a new perk: pension benefits and medical coverage for life.

The Santa Clara Valley Water District planned to discuss the idea at its meeting Tuesday, until it hastily pulled the item from the agenda on Monday after a reporter from this newspaper asked about it.

The plan would have allowed the water district's seven board members to receive the same medical benefits as full-time management employees of the agency, adding a new expense at a time governments across the country are under pressure to cut their pension obligations.

Depending on their years of service, board members could also receive paid vision and dental benefits for life -- not only for themselves, but for their spouses and one dependent, too.

"It's a golden parachute for the Golden Spigot," said John Roeder, president of the Silicon Valley Taxpayers' Association, calling the agency by a nickname....

...Read the full article by clicking here.




 August 26, 2012 San Jose Mercury News

Internal Affairs: Was something overlooked amid Santa Clara County counsel's leadership shuffle?

By the Mercury News


 
[This article is also available at the Web site of the San Jose Mercury News, here.]


Santa Clara County's current headache over whether or not its eighth-cent sales tax measure on the fall ballot is legal probably wasn't helped by all the commotion going on inside the county counsel's office when the idea first surfaced at the June 5 board of supervisors meeting.

After all, on May 18 Gov. Jerry Brown's office had announced that County Counsel Miguel Marquez was headed for a seat on the Sixth District Court of Appeal. Marquez's last day as the county's top legal adviser was June 22, and Lori Pegg has since been running the legal department. On June 26 vote, the supervisors voted to place the tax on the Nov. 6 ballot, which they finalized on Aug. 7.

We wondered whether legal requirements for scheduling tax elections got overlooked amid the leadership shuffle. Prop. 218, a 1996 initiative, requires proposed tax increases to appear on a ballot on which at least one elected governing seat will be decided....

...Read the full article by clicking here.





 August 24, 2012 San Jose Mercury News

Appellate Court turns down Santa Clara County taxpayer group's lawsuit to stop sales tax measure

By Tracy Seipel


 
[This article is also posted at the Web site of the San Jose Mercury News, here.]


SAN JOSE -- The Sixth District Court of Appeal on Thursday declined to hear a lawsuit by a taxpayers group that seeks to stop Santa Clara County from placing a sales tax measure on the Nov. 6 ballot.

The case now will proceed in Santa Clara County Superior Court.

On Monday, the Silicon Valley Taxpayers' Association sued the county, its Board of Supervisors and the Registrar of Voters over the county's one-eighth-cent sales tax measure on the grounds it violates a provision of state law....


...Read the full article by clicking here.




 August 21, 2012 San Jose Mercury News

Taxpayer group takes on Santa Clara County, water district

By Tracy Seipel and Paul Rogers
Staff Writers


 
[This article is also posted at the Web site of the San Jose Mercury News, here.]

Setting the stage for a showdown over two half-billion dollar tax measures, a taxpayer group filed a lawsuit Monday against Santa Clara County and renewed a threat to sue the Santa Clara Valley Water District to keep a pair of local measures off the November ballot.

The Silicon Valley Taxpayers' Association sued Santa Clara County and its board of supervisors over their eighth-cent sales tax measure.

In a 42-page filing with the 6th District Court of Appeal, the association accused the county of violating a provision in the California constitution that requires proposed tax increases to appear on a ballot where at least one seat for the board of supervisors also will appear.

The county supervisor races, however, were decided in the June 5 primary.....


...Read the full article by clicking here.





 August 21, 2012 YAHOO! NEWS
THE LOOKOUT - A Y! NEWS BLOG

Two-word error may cost Santa Clara, Calif. water district $548 million


By Ron Recinto, The Lookout


 
[This article is also posted at THE LOOKOUT, here.]

Talk about going over your character limit.

County officials in Santa Clara, Calif., are scrambling to fix a two-word mistake in the upcoming November ballot that could cost a Silicon Valley water district more than half a billion dollars.

The issue stems around wording for a measure that would allow the local water district to renew a $548 million tax to maintain the Northern California city's water supply, provide flood protection and reduce toxins in waterways, the San Jose Mercury News reports....


...Read the full article by clicking here.





 August 20, 2012 Sacramento Bee
AP State Wire News

2-word ballot mistake could endanger $548m tax bid

The Associated Press


 
This article is also posted at the Web site of the Sacramento Bee, here.

SAN JOSE, Calif. -- A two-word mistake could threaten a half-billion dollar tax measure in the San Francisco Bay area.

The Santa Clara Valley Water District is seeking voter approval in November for a $548 million tax increase.

The San Jose Mercury News (bit.ly/OLfkNJ) says the district submitted a 77-word summary for the ballot to election officials this month. But the word limit is 75 words.

When it learned about the error, the district held a board meeting to approve a new, shorter version.

But the meeting wasn't publicized far enough in advance to meet requirements of California's open meeting law.

The Silicon Valley Taxpayers' Association is now threatening to sue unless the district pulls the measure off the ballot.

Water district board Chairwoman Linda LeZotte says that would be devastating to the district.




 August 19, 2012 San Jose Mercury News

Two-word error could cost Santa Clara Valley Water District half a billion dollars


By Paul Rogers


 
[This article is also posted at the Web site of the San Jose Mercury News, here.]

In what could turn out to be one of the costliest clerical errors in California history, a two-word mistake is threatening to bring down a half-billion-dollar tax measure scheduled for the November ballot in Silicon Valley.

The problem?

When the Santa Clara Valley Water District turned in ballot language this month to elections officials to place a $548 million parcel tax before voters, the summary of the measure was 77 words.

Under election law, however, summaries can be no more than 75 words.

When elections officials alerted the water district about the error, the district rushed to hold a board meeting and approved a new measure, this time with two fewer words.

The trouble is, the district didn't post a public agenda of the Aug. 8 meeting on its website, or send it out to the media, 24 hours ahead of time as required under California's open meetings law, the Brown Act. It missed those deadlines by less than an hour.

And late Friday, lawyers for a taxpayer group sent a letter to the district threatening a lawsuit unless they pulled the measure off the ballot.

"We believe it's a violation," said John Roeder, president of the Silicon Valley Taxpayers' Association....


...Read the full article by clicking here.





 August 15, 2012 San Jose Mercury News

Taxpayer group: Santa Clara County sales tax measure is illegal


By Tracy Seipel


 
[This article is also posted at the Web site of the San Jose Mercury News, here.]


A local taxpayer group says Santa Clara County's sales tax measure is illegal and is pledging to go to court to stop it from appearing on the Nov. 6 ballot in what some legal experts believe could become a precedent-setting case in California.

The Silicon Valley Taxpayers' Association said state law requires a general tax measure to coincide with the election of local candidates -- in this case county supervisors -- on the same ballot.

But the county supervisor races were decided in the June primary....

...Read the full article by clicking here




 June 26, 2012 San Jose Mercury News

San Jose proposes half-cent sales tax

By John Woolfolk


 
[This article is also posted at the Web site of the San Jose Mercury News, here.]


SAN JOSE -- City officials Wednesday recommended a 15-year half-cent sales tax measure for the November ballot that would raise up to $64 million annually while saddling residents, businesses and shoppers with the highest sales tax rate in the county and among the highest in the state's largest cities.

       The City Council will consider the recommendation from Ed Shikada, San Jose's assistant city manager, at its Aug. 7 meeting. Santa Clara County officials that day will consider their own eighth-cent countywide sales tax for the same ballot, which also will include the governor's proposed four-year quarter-cent statewide sales tax increase.
If voters were to approve the proposed city, county and state measures,
San Jose's sales tax would jump from 8.375 to 9.25 percent, among the highest in California and throughout the country.

       The recommendation quickly drew fire from taxpayer advocates and business leaders.

       "There are many places for the city to cut expenses before they need to ask the public for more tax dollars," said John Roeder, president of the Silicon Valley Taxpayers Association. Matthew Mahood, president of the San Jose Silicon Valley Chamber of Commerce, said the business group hasn't taken a formal position yet but would likely be opposed....

...Read the full article by clicking here.


Contact John Woolfolk at 408-975-9346. Follow him on Twitter at Twitter.com/johnwoolfolk1.



June 26, 2012

San Jose Mercury News

Santa Clara County supervisors push sales tax measure for November ballot

by Tracy Seipel

[This article is also posted at the Web site of
 the San Jose Mercury News, here, along with a chart illustrating "How sales taxes could stack up."]


The race to get voters to raise their sales taxes on Nov. 6 got more crowded Tuesday after the Santa Clara County Board of Supervisors agreed to consider a 1/8-cent increase that would pay to beef up everything from county law enforcement to hospital emergency room services.

County residents already are bracing for a sales tax hike this Sunday, when a BART tax that voters passed in 2008 finally goes into effect, pushing the county's current 8.25 percent sales tax to 8.375 -- the fourth highest county sales tax rate in the state.

Another 1/8 cent sales tax would send that to 8.5 percent, tying it for third -- and that doesn't even include Gov. Jerry Brown's proposed ¼ cent sales tax measure or one by the city of San Jose, which is mulling a 1/4 to 1/2 cent sales tax to place on the same fall ballot.

John Roeder, president of the Silicon Valley Taxpayer's Association, said enough is enough.

"Sales taxes are too high already, and the county has a number of ways to cut down on its costs before it needs to start collecting more taxes from people,'' said Roeder, pointing to massive employee pension and health care costs that are eating up the county's budget.

"In nearly any department you can name, there is room for efficiency," said Roeder....


...Read the full article, here.



May 25, 2012

San Jose Mercury News

More than $1 million spent on fight over San Jose pension reform

by John Woolfolk
[This article is also posted at the Web site of The Mercury News, here.]


San Jose's fight over a June pension reform measure has topped $1 million in spending according to expenditure reports filed Thursday.

San Jose Mayor Chuck Reed has raised nearly $700,000 from business and taxpayer groups toward passage of his Measure B.

"It's going good," said Reed, who has called Measure B critical to slowing employee pension costs that have more than tripled in a decade and outpaced revenue growth. "There are people who are concerned about the state of the pension problem around the state so that's been helpful for fundraising."

The yes-on-B campaign committee led by Reed and the San Jose Silicon Valley Chamber of Commerce political committee reported raising $637,919 this year. The Silicon Valley Taxpayers Association also reported raising $45,000 in support of Measure B.

Financial adviser Johnny Khamis raised the second-highest totals in the race, reporting $71,154 for the year including $20,000 in personal loans and contributions from backers including former GOP Congressman Ernest Konnyu.

County appraiser Brian O'Neill brought in $48,276 for the year including $19,000 in personal loans and contributions from unions including AFSCME.

Sports broadcaster Robert Braunstein raised $42,380 toward his bid this year, including $20,000 in personal loans with contributors including the California Apartment Association.

San Jose Unified School District trustee Leslie Reynolds raised $39,639 this year, including $20,000 in personal loans with support from contributors including Garden City Construction co-owner Susanne Salata.

Denelle Fedor, an aide to Councilman Pierluigi Oliverio, has amassed a total of $32,790 toward her campaign with backing from Almaden Valley Community Association leaders Jerry Mungai and Susan Bailey.

Of the incumbents seeking re-election, none has faced a tougher battle than Reed ally and District 8 Councilwoman Rose Herrera. She's raised $88,675 this year including a $1,000 personal loan and together with funds raised last year spent $94,343 this year toward her re-election.

But unions are spending furiously to force her into a November runoff against opponent Patricia Martinez-Roach, an East Side Union High School District trustee.

Martinez-Roach raised $11,654 this year including $2,710 in personal loans with backers including city police and firefighter unions. Attorney Jimmy Nguyen, another opponent, has raised $16,029 this year including $2,200 in personal loans with contributors including the County Employee Management Association.

But city records showed heavy independent spending by outside groups on the race. The San Jose Firefighters union, Santa Clara County Government Attorneys Association and Association of Retired San Jose Police Officers and Firefighters reported spending $62,199 opposing Herrera and supporting Martinez-Roach. The chamber and the California Apartment Association spent $32,582 promoting Herrera and opposing Martinez-Roach.

The chamber committee also spent $20,107 opposing O'Neill and $17,811 against Bitbadal in District 10.

In central San Jose's District 6, incumbent Reed ally Councilman Pierluigi Oliverio raised no money since mid-March having already reached his limit of $121,157 for the year.

That's three times the $35,280 raised this year by union-backed opponent Steve Kline, a lawyer who loaned his campaign $12,500. Also in the race is Bill Chew, who showed no fundraising activity.

In north San Jose's District 4, union-backed incumbent Kansen Chu raised $90,401 this year. Together with funds raised last year, he has spent $106,642 toward his re-election with backers including AFSCME. The retired officers and firefighters independently spent $6,075 on his behalf.

City police detective Tam Truong raised $53,520 this year including $2,500 in personal loans, and enjoys $30,212 spent independently on his behalf by the chamber.

Neighborhood commissioner Rafael Sabic raised $6,041 this year including $3,896 in loans from his wife.

In southeast San Jose's District 2, incumbent union-backed Councilman Ash Kalra amassed $43,522 this year including a $1,000 personal loan.

Opponent Tim Murphy, an engineer and former city councilman in Ohio raised $1,525 since mid-March from backers including Charles Munger Jr. toward a campaign largely financed with $14,000 in personal loans.

In the county board of supervisors race, incumbents George Shirakawa Jr. and Dave Cortese, a mayoral hopeful, are running unopposed.

Competing in the District 5 Santa Clara County supervisor's race to succeed Liz Kniss, who is being termed out, are state Sen. Joe Simitian, the perceived favorite, as well as Cupertino Councilman Barry Chang and ex-Mayor Kris Wang.

Chang now leads the field in fundraising, but only because of $80,000 in loans from his wife during this period. He also raised $600 in cash, for a total of $96,984 year to date. Simitian followed, raising $22,333 this period, for a total of $69,503 year to date. Wang raised $10,367 this period, for a total of $69,654 year to date.


Mercury News Staff Writer Tracy Seipel contributed to this report. Contact John Woolfolk at 408-975-9346.



May 8, 2012

The Almanac

County tax measures tap visitors' wallets

Taxes would apply to receipts of rental car, parking and hotel companies.

by Dave Boyce, Almanac Staff
 

[This article is also posted at the Web site of The Almanac, here.]


With the possibility of a $28 million budget deficit in San Mateo County for the 2012-13 fiscal year, the Board of Supervisors is asking voters to raise taxes by approving three measures on the June 5 ballot.

Asking for tax increases is usually a tough proposition, but these measures might be more palatable because the money would come mostly from someone else's wallets: visitors to the county, when the rental car, parking and hotel businesses pass the taxes on to their customers.

The three proposals avoid the requirement that tax measures be approved by two-thirds of voters to pass. By having the tax revenues go into the county's general fund, these "general purpose" tax measures need the approval of only a simple majority of voters, county manager John Maltbie told the Almanac.

Measures T and X would create new taxes.

T would impose a 2.5 percent tax on the gross receipts of vehicle rental companies in unincorporated areas, including the San Francisco International Airport.

Measure X would impose an 8 percent tax on receipts of commercial parking facilities in the same areas.

Measure T would raise around $7.75 million a year and Measure X around $5 million a year, according to an impartial analyses on the website of the county Registrar of Voters.

The proposals are back for a second look by voters. In 2008, voters rejected two similar measures with 53 percent voting no in each case.

Measure U would raise the hotel and motel occupancy tax rate to 12 percent from 10 percent in unincorporated areas of the county, raising $200,000 a year, the analysis estimates.

Pro and con
Backers do not avoid stating the obvious: These measures would raise revenues "without significantly impacting the pocketbooks of county residents and provide ... local revenue that cannot be diverted by the state," says the argument in favor of Measure T.

Signing one or more of the arguments in favor are county supervisors Adrienne Tissier, Carole Groom and Don Horsley; county Superintendent of Schools Anne Campbell; environmental activist Lennie Roberts; and former district attorney James Fox.

Backers point out that county government has, over a period of six years, cut costs by more than $70 million by eliminating 500 positions, reducing and consolidating department budgets, closing facilities and negotiating reductions in labor costs.

Nine jurisdictions in the county have 12 percent hotel and motel occupancy tax rates, and business at the airport is booming, with sustained growth for eight years, the backers say. The city and county of San Francisco receives $46 million from airport vehicle rentals while San Mateo County gets "pennies in comparison."

Nevertheless, Bay Area tourism, hospitality and entertainment interests would be hurt if the measures pass, opponents say. Among the opponents are Taxpayers for a Strong Economy and the Silicon Valley Taxpayers Association.

"If we're going to raise taxes, we need controls to ensure the money is spent on what matters most: education, public safety and job creation," the argument against Measure U says.

"Voters know very well who will suffer if these taxes are imposed," says the argument against Measure X. "We'll pay more for airport parking, hotel rooms and rental cars if these taxes pass. Even restaurant valet and paid hotel parking will be taxed."






February 6, 2012

The San Jose Mercury News

Santa Clara County supervisors to consider $1.2 million in vouchers to house 100 chronically homeless

by Tracy Seipel
 
[This article is also posted at the Web site of the Mercury News, here.]

Except for a few stints at a shelter, Mark Quinlan has spent the past few years living in Plaza de Cesar Chavez Park, right across the street from the San Jose Fairmont Hotel. He calls the park "the affordable Fairmont."

Chronically homeless for six years, the 57-year-old Quinlan has cycled through repeated contacts with the police and visits to the county hospital's emergency room -- most recently for a cracked skull after a fall -- all on the public dime.

But on Tuesday, the Santa Clara County Board of Supervisors is poised to fund a $1.2 million subsidized housing program for 100 chronically homeless people -- anyone living more than a year on the street with a disabling mental or physical condition. Supporters say the program will improve treatment for people such as Quinlan, and save taxpayer dollars.

"It's the right thing to do, and it's fiscally responsible," said Supervisor Mike Wasserman, the lone Republican on the five-member board. "And there's not a whole lot of things like that."

If passed, the county's one-year pilot program would begin as soon as April, and cover $12,000 to pay for a rental unit, with at least $500,000 more in additional funding from public and private sources to pay for case managers to supervise each resident.

The program is part of Housing 1000, the local arm of a nationwide 100,000 Homes Campaign aimed at providing stable housing and supportive services -- an apartment and an assigned caseworker -- to chronically homeless people. Housing 1000 hopes to do that for 1,000 homeless by 2013.

County leaders say they're relying on studies that show the strategy is less expensive than homeless shelters, and the frequent visits by homeless people to hospital emergency rooms, inpatient psychiatric services and jails.

Based on other programs in the region, state and nation, they estimate that every chronically homeless person in the county costs taxpayers $60,000 annually, which could be halved if the person had a permanent place to live. The county will assess the program after one year.

"It's a cheaper and more efficient and holistic way to end homelessness," said Jennifer Loving, executive director of Destination: Home, a program of The Health Trust, that seeks to end homelessness in the county. "People don't think that the guy living under the bridge is costing anything. But that's absolutely not true."

A 2011 Santa Clara County homeless census and survey tallied 7,045 homeless in the county on any given night. Of these, 2,520 are considered chronically homeless, or the most vulnerable. That designation is based on factors including how long the person has been living on the streets and their increased risk for death based on their health conditions. Sixty-one homeless people died in the county last year.

"It's not just about giving them a place, and then walking away from them," Loving explained of the program, which also seeks to reintegrate many homeless back into society. "We want to see if they can become more stable and engaged in our community, and there are lots of ways to do that."

Experts say permanent housing makes fiscal sense. It would allow a homeless person to be contacted regularly by case managers, who can check up on that person's mental and physical health, instead of waiting until the condition becomes more severe, complicated and costly. When clients have a stable address, case managers also can determine if the person is eligible for Social Security or MediCal, among other benefits that a person may not be receiving while living on the streets.

"When we looked around at the options available for providing the stable housing, this looked like the best method that we could implement, and have a solution,'' said Gary Graves, the county's chief operating officer. "Creating these 100 vouchers gives us a way to test the system and prove if the concept makes sense.''

Graves and others point to other Bay Area cities that have implemented similar measures with success.

San Francisco's Housing First program, for example, has reduced the cost of homeless safety net services from $61,000 a year per homeless person to $16,000 for those who receive housing.

In San Mateo, a collaboration with the city, county and the nonprofit Shelter Network resulted in the city spending $4 million to buy and convert a former downtown hotel to house 16 chronically homeless people. Since 2009, its leaders say the project has seen the hotel residents' medical expenses plunge 85 percent, while police contacts have dropped 99 percent.

"We strongly believe in the Housing First model," said Sandy Council, San Mateo's neighborhood improvement and housing manager. "Put the money into the housing and in the end, you will save on services later."

Council said Redwood City and South San Francisco are working on their own projects as a result of San Mateo's success.

Not everyone is necessarily convinced of the benefits.

John Roeder, president of the Silicon Valley Taxpayers' Association, said he hadn't heard about the county's proposal and wondered whether a decrease in costs will actually result.

"There may be an increase or a decrease in costs," he said. "We'll have to see."

As for Quinlan, the former wallpaper hanger said he would like to be considered for a permanent housing voucher, especially for a unit with handicap access so he could manage in his wheelchair.

"I'll be listening to see what happens," Quinlan said of Tuesday's vote.

Contact Tracy Seipel at 408-275-0140.

 

BY THE NUMBERS

In San Mateo: A permanent-housing project for 16 chronically homeless people resulted in medical expenses dropping after one year from $195.93 per person per month to $28.98.

Police contacts for the same people dropped from 38.46 contacts per person per month to .04 contacts.

In San Francisco:

The Housing First model has reduced the cost of services from $61,000 a year for a homeless person to $16,000 for those with permanent housing.
Santa Clara County leaders say the estimated $60,000 annual cost of services for one chronically homeless person would be reduced to $30,000 per person with permanent housing.

Sources: City of San Francisco; City of San Mateo; Destination: Home and Santa Clara County







November 2, 2011

The San Francisco Examiner

PENINSULA

Measure G has San Mateo affordable-housing mandate in limbo

by Niko Kyriakou

Special to The Examiner


Unless voters approve Measure G next week, San Mateo may no longer be able to require developers to build affordable housing.

Some 1,200 people are on the city’s affordable-housing wait list, and some 1,000 applicants recently applied for 67 affordable units in a new development, according to city data. But the city’s requirement that more affordable housing be built could be undone by a 2009 a lawsuit known as the Palmer case.

San Mateo voters have long expressed support for affordable housing, most recently in 2004 with Measure P, which required that developers of rental projects of 11 units or more either allocate 15 percent of their units for low-income residents or 10 percent for very-low income residents.

Although that has resulted in the construction of hundreds of below-market-rate units, more are clearly needed.

But in the Palmer case, the California Court of Appeal decided cities could no longer force property owners to provide low-rent housing. Other cities have coped with that ruling by allowing developers who skip out on affordable-housing requirements to pay a fee that cities then use to subsidize affordable-housing projects.

But that won’t work in San Mateo. Under Measure P, the city is explicitly prohibited from accepting such fees.

To avoid getting sued by a developer, the City Council passed an emergency moratorium in September that banned new rental housing developments. But it can’t delay development forever without failing to heed the voters’ will to build more affordable housing.

Thus, officials are proposing Measure G, which Community Development Director Lisa Grote said would enable San Mateo to slip past the conflict of state and city laws and continue its affordable-housing policy.

The solution is delicate. Grote said officials realized that the Palmer decision would not prohibit them from charging a fee to developers who do not provide the required 15 percent of affordable units. Although Measure G would give developers a choice of whether or not to build affordable units, the idea behind it is to charge so much that most developers will just opt to build them.

“The intent is to make the option to put the units on site more attractive than paying the fee, because that’s what our below-market program has done,” Grote said.

If the measure does not pass, Grote said the city will likely extend its moratorium on rental developments and be forced to find an alternative.

Arguments have been filed against the measure by John Roeder, president of the Silicon Valley Taxpayers Association.

If the city truly wanted to tackle the affordable housing gap, Roeder wrote, they should remove limitations on building heights, erase permitting fees and expedite the permitting process for affordable-housing projects.

Yet even if all that were done, and a voter decision to limit building heights were rolled back, there would still be no guarantee that developments would include affordable housing, Grote said.


[This article is also posted at the Web site of the San Francisco Examiner, here].



October, 2010

LP News

Affiliate News And Events

California: Opposition to Ballot Measure



LNC Chair Mark Hinkle, along with LP activists Elizabeth Brierly, worked with Republican Doug McNea, who is also the Chair of the Silicon Valley Taxpayers (SVT) to submit nine arguments against nine bond issues or tax increases scheduled to appear on the November 2 ballot through Santa Clara County, aka Silicon Valley.


Brian Darby, local LP Chair, and LPC Treasurer, signed on behalf of the local LP and Doug McNea signed on behalf of the SVT. The tax increases ranged from parcel taxes, to vehicle fee increases, to bond measures. The bond measures totaled over $450 million, with millions more for the proposed parcel taxes and other fees.


This article is reprinted from LP News, the monthly newspaper of the national Libertarian Party (www.LP.org).




October 27, 2010

KCBS San Francisco

Local Tax Measures Flood Bay Area Ballots

Chris Filippi Reporting

[This article is also posted at the Web site of KCBS Radio, San Francisco].


SAN FRANCISCO (KCBS)    The budget mess in Sacramento will be reflected at the polls next Tuesday, with an explosion in the number of local tax measures that will be decided on the ballot.

In the Bay Area, there are 43 local tax measures, 35 school bond or tax measures and four calls to increase vehicle registration fess.

And those numbers don’t even include five proposals to tax marijuana.

The rush in tax measures has anti-tax advocates like Doug McNea with the Silicon Valley Taxpayers’ Association up in arms.

“They couldn’t increase taxes in Sacramento, so it’s been pushed down to the local level,” he said.

McNea said the trend is akin to a death by a thousand taxes.

“That’s why we’ve gone to the trouble of drafting ballot arguments as best we could to oppose all of them,” McNea said.

But supporters of some of the fee hikes said they have no choice but to look for local sources of income since the state continues to raid city and county governments.

“It does say something about Sacramento. Sacramento legislature is polling at a nine percent approval rating,” said Carl Guardino, president of the Silicon Valley Leadership Group. “We are year after year of budgets not being passed on time and glossed over when they are passed.”

Guardino and his group support measures in Santa Clara and San Mateo counties that would boost the vehicle license by ten dollars annually to pay for transportation improvements.

He said people need to act in the face of the challenges posed by Sacramento.

“We’re going to do it locally, we’re going to do it with accountability, we’re going to do it with a transparency,” Guardino said.

And the state budget crisis may not be over. One credit agency is projecting in the next fiscal year, California will face a budget deficit that is at least $12 billion.

Listen to Chris Filippi's broadcast report, here.




October 23, 2010

Los Altos Patch

Community College District Asks Voters to Dig a Little Deeper for Funds

Foothill-De Anza Community College District officials ask voters to approve a new parcel tax to make up for state cuts.

by Pam Marino


[This article is also posted at the Web site of the Los Altos Patch, here].


Reeling from $20 million in state budget cuts over the last two years, Foothill-De Anza Community College District officials are asking voters to approve a precedent-setting parcel tax on Nov. 2.

Measure E would add $69 a year for six years onto homeowners property tax bills, if passed by a two-thirds vote. In turn, approximately $690,000 a year would be pumped into district coffers to pay for core classes such as math, English and writing.

"We're seeking stable funding that the state can't take away," said Betsy Bechtel, a member of the district board. She said the state has increasingly cut money from the budget at the same time that public demand for courses has soared.

"When people are unemployed or afraid they are going to lose their job, what do they do? They go back to school," Bechtel said. She said last year the district had about 1,000 students for whom they did not get compensated by the state.

As a result of state cuts, she said the district has laid off staff, remaining employees have gone without a cost-of-living increase for three years, a hiring freeze is in place, and employees are paying more for benefits. Bechtel said the district cut $4.5 million in payroll costs between 2008 and 2009. Benefits were cut by $5.3 million per year, she said. 

A stir was caused earlier this week when a Palo Alto newspaper printed a story asserting that 415 district employees draw salaries of more than $100,000 a year. Bechtel said the average salary of a full-time instructor is $95,950, which reflects a combination of the education level and expertise of the instructors, the need to compete with colleges across the country for staff, and the high cost of living in the Bay Area.

"Our faculty are really good, and that expertise is linked to our students' success, making our colleges among the best in the nation," Bechtel said.

The board has looked for other places to save money, she said, pointing to a solar project financed by a bond measure approved by voters in 2006 that will save the district $400,000 a year.

Doug McNea of the Silicon Valley Taxpayers Association said a parcel tax during an economic downturn is "kicking property owners when they're down." He called the parcel tax a bad precedent for Santa Clara County. The first ever parcel tax for a community college district in California was passed in June in San Mateo County.

McNea also objected to the fact that community colleges, unlike elementary and high school districts, cater to students who are not necessarily residents of the district.

Bechtel countered that all community colleges by law have open enrollment, and that while some students come from outside the boundaries, others within attend colleges in surrounding districts. She added that foreign students pay significantly more, helping to subsidize other students.

If the measure is passed, a citizens advisory committee will be formed to oversee spending of the money collected, which will be deposited into a separate account. The measure restricts spending for educational programs only, and not for administrators' salaries or benefits.

Bechtel said that every chamber of commerce in the district has endorsed the measure, as well as the Silicon Valley Association of Realtors, the Los Altos-Mountain View School District PTA Council and the Mountain View-Los Altos High School District Board of Trustees, among others.

The Los Altos Board of Trustees will decide whether to endorse the measure at its meeting on Monday night, Oct. 25.



October 18, 2010

San Jose Mercury News

Proposition 22 limits on state raids is hotly disputed (sic)

by Denis Cuff


[This article is also posted at the Web site of the San Jose Mercury News, here].


A measure on next month's statewide ballot is pitting police, fire and transit services against schools and social programs.

City leaders and transit agencies support Proposition 22, which they say will stop state funding raids that take money from public safety and other local services.

Yet the proposition is opposed by high-profile unions for teachers, firefighters and nurses, who call it another ill-advised "budgeting by ballot box" measure that will shortchange schools, health care and social services.

Prop. 22 would amend the constitution to restrict state authority to borrow or take property taxes, gas taxes and vehicle license fees. Such fees are intended for local coffers, yet the state frequently siphons the money to cover gaps in other programs.

San Jose's redevelopment agency, for instance, was forced this year to pay $62 million as part of the Legislature's seizure of $2.05 billion in statewide redevelopment funds. Another $13 million from San Jose is due in May.

City and public transit leaders say they came up with Prop. 22 because lawmakers can't be trusted to keep their hands off local money to get out of state budget jams...

...Read the full article by clicking here.



October 14, 2010

San Jose Mercury News

7 Santa Clara County school districts seek parcel taxes, bond measures on Nov. 2

by Sharon Noguchi


[This article is also posted at the Web site of the San Jose Mercury News, here].


Squeezed by state cutbacks and encouraged by voters' passage of money measures in neighboring areas, seven Santa Clara County elementary, high school and community college districts on Nov. 2 are seeking parcel taxes to pay for teachers and programs, or bond money to improve buildings and equipment.

And while the districts have legions of volunteers campaigning to get the local support, their financial distress lies in large part with the California Legislature.

This year a stalemate in Sacramento again held school district budgets hostage, for a record 100 days. Last week's budget deal still pays less than what the state owes schools, threatens further cuts in January and pays a growing chunk of funds late.

"The state is an unreliable partner in education funding," said Jennifer Shaw, who is leading the campaign for Measure L, a $96 parcel tax in the Cambrian School District. The San Jose district hopes the parcel tax, a locally controlled fund, will provide $850,000 annually for six years to keep down class sizes, keep libraries open and continue to offer tutoring and accelerated classes. Campaigners point out that state cutbacks have forced the district to cancel summer school and most buses, negotiate for six furlough days and reduce budgets at its six schools by 20 percent.

If passed, Measure L would create the second parcel tax in Cambrian, which boasts some of the highest-scoring schools in the county. A separate perpetual parcel tax supports music, art, physical education and technology.

Other districts also point to their shrunken budgets. Foothill-De Anza Community College District has cut $20 million in two years from its annual budgets of $180 million, board President Betsy Bechtel said. Those cuts came even as the district renegotiated employee benefits to save $5 million annually and reduced utility costs by $400,000 a year. De Anza College in Cupertino had waiting lists with more than 10,000 names this fall, especially for math, science, English and history courses that students need to qualify for transfer to four-year universities.

The district is hoping to pass Measure E, a $69 parcel tax. It would raise about $690,000 annually that is meant as insurance against more state cuts so the district can add core classes, as well as courses in such subjects as health care and technology. Last spring, the San Mateo Community College District became the first college district in the state to pass a parcel tax.

Opposing the taxes are the Silicon Valley Taxpayers Association, which argues districts should live within their means.

"Homeowners are taxed enough already," said association President Douglas A. McNea, who signed the arguments against all seven school tax measures in the county. He said districts shouldn't be rewarded for not managing their money well.

School leaders dispute those contentions. "We are dramatically underfunded by the state," said Vice President Lan Nguyen of the board for East Side Union High School District, which is seeking a $98 parcel tax to pay for counselors, help fund athletics and improve security. In 2011-12, the district expects to face a deficit of as much as $12 million, he said. Teachers haven't had a cost-of-living raise in three years and this year agreed to pay more for health care, he said.

Without a parcel tax and without significant increase from the state, the district will likely face further cuts of counselors, athletics and staff at its 11 comprehensive high schools, Nguyen said. Cuts forced East Side to reduce the guidance staff to two counselors at each high school, most of which have more than 2,000 students.

"Without the parcel tax, we're looking at having just one counselor at each comprehensive high school," Nguyen said.

Measure I, which requires a two-thirds vote, would generate about $9 million annually, he said.

Four school districts are seeking bond measures to improve technology and security and upgrade and replace aging classrooms. All of the bond measures require 55 percent approval to pass. The largest, by San Jose/Evergreen Community College district, would issue $268 million in bonds to repair and modernize science labs and to upgrade electrical, plumbing and heating systems.

It is the only bond measure with significant opposition, coming from the Sherman Oaks and Burbank/Del Monte neighborhood associations and others. They argue that the college district, which has two campuses -- San Jose City College and Evergreen Community College -- has wasted taxpayer money on poorly planned projects, travel and consultants and lacks credibility.

Santa Clara Unified's Measure H would raise $81.1 million to renovate and repair current and closed campuses and buy property for new schools to serve the growing North San Jose area.

Earlier this year the district was a target of a critical Santa Clara County Civil grand jury report, which charged the district had spent only one-quarter of $315 million in projects promised in a 2004 bond measure.

The district said the projects are back on track, to be completed by 2014.

In San Jose, the Franklin-McKinley School district is seeking $50 million in bonds through Measure J and the Moreland School District is seeking $55 million in bonds through Measure K. Both measures would help upgrade schools, technology, energy efficiency, fire alarms and security systems.

Contact Sharon Noguchi at 408-271-3775.



October 11, 2010

ABC7 KGO-TV

Calif. Cities band together for Prop 22

by Karina Rusk


[This article is also posted at the Web site of ABC7 KGO-TV, here].


SAN JOSE, CA (KGO) -- One of the propositions on the November ballot has cities across the state banding together and educators fighting back. If passed, Prop 22 would keep the state from raiding city coffers to balance the budget in Sacramento.

Hundreds of cities across California are supporting Proposition 22. San Jose's Mayor Chuck Reed says it is time the state stop raiding local revenue to cover its own budget failures. He says that practice results in cuts to police, fire and libraries.

"The services that people value most are the services we deliver at the local level," Reed said. "This is an effort to make sure the state can't take that money and the state has to live within its means and that would be a good thing."

Educators say not so fast. They say the economy has made budget balancing tough enough and Prop 22 would tie the hands of legislators to redirect money where it's needed most -- schools.

"Every aspect of the district is hurting; we can barely operate the programs we have operated in the past and we can't afford to lose any other dollars," San Jose Teachers Association President Steve McMahon said.

In addition to the California Teachers Association, groups opposing Prop 22 include the California Nurses Association and California Professional Firefighters.

The November initiative is supported by the League of California Cities, the California Transit Association and the California Alliance for Jobs.

According to the non-partisan Legislative Analyst's Office, last year, the state borrowed $1.9 billion from city coffers but created a mechanism to pay it back immediately. The Analyst's Office also says the state took or shifted $1.7 billion from local redevelopment agencies to school districts.

Prop 22 would restrict the state's authority over gas tax money and property tax revenue intended for local use.

San Jose's redevelopment agency says the state money grabs wreak havoc on its ability to create jobs though redevelopment and neighborhood stabilization projects.

"This agency was hit with a $75 million take, which is a significant hole in our budget and prevents us from doing a lot of very needed local programs," agency spokesperson Harry Mavrogenes said.

If voters approve Proposition 22, it would be a constitutional amendment that would change the way Sacramento manages public money. Cities say reform is long overdue, but some taxpayer groups warn it would take away the flexibility lawmakers need when money is tight.

"When it comes to priorities, education should come before redevelopment," Doug McNea president of the Silicon Valley Taxpayers Association, said.

Prop 22 would not generate any new money or create any new debt, but it would have a big impact on both state and local budgets.





October 3, 2010

SAN FRANCISCO EXAMINER | LOCAL

Peninsula, SF Drivers might be hit with new fees

by Katie Worth

Examiner Staff Writer

[This article is also posted at the San Francisco Examiner, here.]


The wheels on the bus go ’round and ’round, thus contributing to cracks and potholes in the road, so drivers should pay a little extra for repair work.

At least, that is the theory behind a measure on the Nov. 2 ballot that would increase by $10 the fee drivers pay when they register their automobile in San Francisco and on the Peninsula.

In fact, voters will have a chance to increase their vehicle license fee twice on one ballot as state officials are proposing a vehicle license surcharge of $18, which would help fund state parks and wildlife programs that have been affected by budget cuts.

If both fees are approved, drivers in San Francisco and San Mateo counties would have to pay a total of $28 extra when they register their vehicles each year.

The $10 that San Francisco’s Proposition AA would tack on to the fee would go toward three uses, 50 percent for street repairs and reconstruction, and 25 percent each for pedestrian-safety and public transit projects.

The same fee would be attached to San Mateo County drivers’ registration fees if Measure M is passed. In that county, $5 would go toward maintaining roads and the other $5 would be dedicated to transportation programs, particularly for seniors and disabled residents.

Most counties in the state have a similar measure on their ballots because of a bill passed allowing them to take such action. California has historically had vehicle license fees, but they were removed by Gov. Arnold Schwarzenegger when he was elected. However, he has endorsed the plans to reinstate them.

San Francisco Supervisor Ross Mirkarimi led the effort to put Prop. AA on the ballot. He said the two polls that have asked registered voters about the measure have come back with more than 60 percent support, much higher than the 50 percent needed for it to pass.

“This is a very modest proposal and it’s going to go for critically important needs that affect everybody,” Mirkarimi said.
But not everyone agrees that now is the time to impose the new fee, or that it is needed. Douglas McNea, president of the Silicon Valley Taxpayers Association, said the public already pays for transportation improvements with other taxes.

“The basic message is we’re taxed enough already,” he said.


kworth@sfexaminer.com




July 31, 2010

THE WALL STREET JOURNAL | OPINION JOURNAL

The Muni-Bond Debt Bomb

. . . and how to dismantle it.

by Steven Malanga

From The City Journal

[This article is also posted at The Wall Street Journal, here.]

In the early 1970s, New Jersey officials decided to build a sports facility in the Meadowlands, the state's wetlands just outside New York City. To help pay for it, they formed the New Jersey Sports and Exposition Authority (NJSEA), a quasi-governmental agency with the power to issue debt. The authority floated $302 million in bonds, used the proceeds from the bond sale to construct Giants Stadium and a Meadowlands racetrack, and planned to pay off the debt in 25 years, largely with proceeds from the track but also with some help from the stadium. Horse racing proved a big hit, and the plan seemed bound for success.

But the pols couldn't resist soaking the Meadowlands. They siphoned track proceeds into the state budget; repeatedly refinanced the NJSEA's bonds, pushing repayment dates far into the future; and relied on the authority's good credit rating to launch other building schemes, including a costly but unsuccessful aquarium in Camden. Today, 35 years after its first bonds, the NJSEA is $830 million in hock. Worse, it can't repay that debt because business has cratered at the racetrack, still the Meadowlands' principal revenue source. As for Giants Stadium, it was demolished this year, and its replacement won't be contributing much to the debt repayments. The state, facing its own cavernous budget deficits, has had to assume the authority's interest payments, about $100 million this year on bonds that now stretch out to nearly 2030. "The sports authority is paying the consequences for politicians using it for their pet projects," observes Steve Lonegan, former mayor of Bogota, New Jersey.

Stories like that have become frustratingly common around the country. State and local borrowing, once thought of as a way to finance essential infrastructure, has mutated into a source of constant abuse. Like homeowners before the housing bubble burst, states and cities have gorged on debt, extended repayment times, and used devious means to avoid limits on borrowing, all in order to finance risky projects and kick fiscal problems down the road. Though the country's economic troubles have helped expose some of these unwise practices, the downturn has brought not reform but yet more abuse. Even as Tea Party protesters and taxpayer groups revolt against excessive government spending and taxes, they are paying too little attention to the gigantic state and local debt bomb. If it can't be defused, we're all at risk.

Government debt helped finance the expansion of the American republic. The first municipal bond on record in the United States was an 1812 New York City offering to pay for digging a canal. Six years later, New York State began issuing bonds to finance the $7 million construction of the Erie Canal, whose beneficial impact on the state's economy led other states and cities to rush out bond offerings to pay for new roads, bridges, and waterworks. Total state and local debt outstanding hit $200 million by 1840 and about $1 billion by 1880 ($22 billion in today's dollars).

Though the early muni-bond market helped the young country grow, the borrowing could be risky. Some of the toll roads, railroads, and other endeavors were highly speculative and failed to generate enough income to pay back investors. The five-year downturn that followed the 1837 bank panic left eight states, including Pennsylvania, unable to pay off their bonds, prompting William Wordsworth to pen "To the Pennsylvanians," an ode that castigated those in the state who had "ruthlessly betrayed" the legacy of prudent founder William Penn. Realizing that the defaults would interfere with their ability to borrow in the future, some states imposed debt restrictions on themselves, and eventually inserted requirements into their constitutions that voters approve future bond offerings.

Those moves made the market more secure, but they didn't protect investors from occasional bouts of irrational exuberance. After a flurry of municipal offerings in the 1920s, for instance, total outstanding municipal debt in America reached some $16 billion ($250 billion in today's dollars). Then the Great Depression arrived, drying up tax revenues and leaving governments unable to meet their debts. The 1930s would see 4,500 defaults by state and local governments. It wasn't until the 1950s that the muni market bounced back and debt outstanding surpassed pre-Depression levels.

Though the immediate postwar years proved tranquil, they also saw some troubling changes in the market. States and cities began to expand the scope of what bonds financed to include everything from subsidized housing to private hospitals to urban redevelopment to private industrial development, and they found new ways to skirt state constitutional limits on borrowing. The borrowing craze led to a series of spectacular fiscal crises in the 1970s. Beginning in the previous decade, New York City, under Mayor John Lindsay, had rapidly increased spending on an ambitious menu of social welfare programs, borrowing hefty sums to paper over the resulting deficits. By 1975, New York was borrowing $500 million a month just to pay its everyday bills. Eventually, the banks that managed the debt offerings refused to underwrite further borrowing, fearing that in the increasingly likely event of a default by the city, they might be held liable. New York State and the federal government were forced to bail Gotham out.

Three years after New York's crisis, Cleveland actually did default on $14 million in bonds, in the first major municipal bankruptcy since the Depression. Like New York's, Cleveland's budget had swollen rapidly, expanding by 42 percent between 1972 and 1977, even as the city's population and tax revenues were falling. Cleveland funneled millions of dollars borrowed for capital expenditures into day-to-day operations until the banks refused additional credit and the city's money ran out. Cleveland spent two years unable to borrow and had to make big spending cuts before returning to solvency.

These debt crises woke politicians up. By the late 1970s, borrowing had fallen significantly, and state and local debt as a percentage of the country's gross domestic product had shrunk. Over the next 20 years, the country's fiscal picture improved: debt rose only slightly as states used good times to pay their debts.

But such salutary responsibility went by the wayside at the start of the twenty-first century. As memories of the earlier crises faded, politicians, eyeing splashy new development projects and confronted by powerful constituencies like public unions that agitated for plush benefits, began loading up on debt again. Over the last decade, through good times and bad, total state and local debt has soared from $1.5 trillion in 2000 to $2.4 trillion (in current dollars). When that debt is added to other growing obligations that governments are racking up, using techniques like not paying their bills on time, state and local liabilities have increased from 15 percent of GDP in 2000 to an estimated 22 percent this year. In 1980, they were 12 percent.

Even more disconcerting than the crushing debt is what it has paid for: giant development projects, for starters, including many in which the private sector has wisely shown little interest, except when government subsidizes them. These projects trace their origin to the urban-renewal movement of the 1950s, when states and the federal government cleared tracts of supposedly blighted urban slums and replaced them with large, centrally planned housing projects. Over time, such efforts became so widespread that even thriving communities were declaring themselves blighted to justify construction. The nature of the projects changed, too, as politicians increasingly issued bonds to make bets on private ventures whose economic benefits were uncertain, at best.

California's redevelopment regime is an egregious case. Starting in the 1950s, the state gave localities the right to create public agencies, funded by increases in property taxes, which could issue debt to finance redevelopment in blighted areas. A whopping 380 such entities now exist in California. They collect 10 percent of all property taxes, nearly $6 billion annually, and have borrowed $29 billion to pay for projects ranging from sports facilities to concert venues to subsidized shopping malls. Originally designed to expire after they have improved an area, the agencies go on forever by claiming that blight never disappears. Consider San Jose's redevelopment agency, one of the state's biggest, which filed an application last year to increase its allocation of property taxes. Blight was getting worse in the city, the agency argue, 52 years after it was created to eliminate it.

The California agencies' failures have sometimes been spectacular. In 1999, Fresno conceived plans to revive its downtown area with various projects, including a baseball stadium for the minor-league Grizzlies, whom it had lured from Phoenix. The city's redevelopment agency floated some $46 million in bonds to build the stadium, commissioning the world-famous architectural firm HOK, whose resume includes Camden Yards in Baltimore, to design it. The plan was to repay the debt with help from the rent that the Grizzlies would pay. But the Grizzlies fizzled in their new home, and under financial strain, they have demanded a break in their rent and threatened to skip town if they don't get one, sticking taxpayers with the entire $3.4 million annual bond payment on the facility. Meanwhile, the Fresno Metropolitan Museum has gone bust, defaulting on $15 million in debt that the city had guaranteed for it, which the city is repaying with money from still more borrowing, to the tune of $750,000 a year. As for that downtown blight: "In 1999, experts called [downtown] dirty, outdated, underutilized and disconnected," the Fresno Bee recently observed. "By 2009, many of the same complaints persist, despite the stadium and other additions to downtown."

In fact, California's government-financed stadiums and sports arenas, like others around the country, have frequently failed to produce the economic bounce that politicians promised. In 2008, two reporters for the Press-Enterprise in Riverside surveyed the record of California sports venues built with public subsidies. In Lake Elsinore, a baseball stadium constructed in 1994 with $24.3 million in bonded debt couldn't meet its obligations for six years, forcing the city to dip into its general fund to make up the difference. A San Bernardino stadium that opened in 1996 with $17 million in public funds is paying off its debt, but it has spurred no new development. "There's a huge consensus among economists that there is no economic development benefit to these stadiums," notes economist J. C. Bradbury.

Nor do other projects that seek Californians' entertainment dollars pay much better. A San Bernardino amphitheater that opened in 1993 with financing from a $22 million bond offering hosts only a handful of concerts every year and can't make enough money to meet its debt payments, the Press-Enterprise found. "If there's a need for it, the market will supply it. We don't need government subsidizing it," says state assemblyman Chris Norby.

Cities that use municipal debt to subsidize expensive private projects often get into fierce competitions for the privilege of subsidizing them. Atlanta and Charlotte, for example, recently unleashed a bidding war for NASCAR's Hall of Fame, a private enterprise. Atlanta assembled a $90 million package that included $32 million in subsidies, largely from economic-development debt issued by Georgia. But Charlotte pols, desperate, according to the Charlotte Observer, to "secure a one-of-a-kind attraction that finally answers the question: What's Charlotte got that makes it different from any other city?", trumped Atlanta with a $154 million bid, promising to build the museum by issuing bonds and to service the bonds with funds from a new hotel tax, despite an economic-development study's conclusion that increased annual tourism from the venture wouldn't equal what a single NASCAR race generates.

The price tag for the Hall of Fame quickly rose to nearly $200 million, and Charlotte was on the hook for all of it. Further, back in 2006, when Charlotte had made its bid, the city was on a roll, with budget surpluses and plenty of ability to issue debt and pay for it; but after the worldwide financial-sector meltdown, Charlotte, a regional banking center, watched unemployment skyrocket from under 5 percent to 12.8 percent, laying waste to tax collections. The city has already had to dip into a reserve fund to pay the debt service on the just-opened Hall of Fame. As the head of the Charlotte Chamber of Commerce observed, "It is a new decade and Charlotte is not the same. Unemployment is stubbornly high. The real estate market is anemic. Public revenues are challenged." Yet he also argued that there was room for optimism. Why? Because of expensive new projects like the NASCAR Hall of Fame!

Charlotte isn't alone. Across America, states and cities have heaped on the debt to build facilities aimed at luring tourists and conventioneers away from other states and cities. For instance, cities have been waging a two-decade-long "arms race," as University of Texas public policy professor Heywood Sanders puts it, to expand convention centers, and have been funding them through billions of dollars in municipal debt. The result: a market with perhaps 40 percent more space than demand warrants, underperforming facilities, operating deficits, and little economic payoff. Washington, D.C., spent $850 million to triple the size of its convention center; its business has since eroded. Indianapolis is in the middle of a $275 million expansion of its convention facility; the center is struggling even to hold on to its current business. Chicago has shelled out $1.5 billion to expand McCormick Place; business there has fallen by a third since 2000, from 3 million visitors a year to 2.1 million. The Orange County Convention Center in Orlando, Florida, which officials expanded at a cost of $748 million in 2003, suffered a record $18 million operating deficit last year.

Recall that many states sensibly require all bond offerings to be approved by voters, who have often defeated new borrowing aimed at financing grand, politically inspired projects. But the requirement has led to a rise in maneuvering by officials, who have created quasi-governmental authorities that can issue debt without voter approval. Such backdoor borrowing has become the most common kind of state debt. In New York, which has 230 of these independent entities, voters have approved only $3 billion of the state's $60 billion of bonded debt outstanding. California's army of redevelopment agencies can likewise borrow without the approval of the voters whose taxes they ingest.

When government can create a shadow world of independent agencies able to borrow without consulting voters, abuses become inevitable. In 2001, after the New Jersey Supreme Court ordered Trenton to embark on a construction and renovation program for schools in poor districts, the state legislature extended the initiative to districts across New Jersey, inflating a $2 billion program to $8.6 billion. Knowing that voters would never swallow the cost, the legislature set up an independent construction authority and sanctioned a massive debt offering without voter approval. Largely unaccountable, the authority became a patronage pit ridden with waste and corruption; investigations by newspapers and the state eventually revealed that it could accomplish only half the job with its huge pot of money. Despite the scandal, the court signed off on a second, $3.9 billion bond offering in 2008 so that the authority could finish the work it had bungled.

Another unaccountable independent agency is the Massachusetts Bay Transportation Authority (MBTA), which runs Boston-area mass transit. In 2000, Massachusetts moved to make the MBTA financially independent. As part of the plan, the authority was supposed to reduce costs and gradually pay down some $5.6 billion in debt; instead, it continued to spend liberally, deferred the debt payments, and borrowed even more money, again, without voter approval. Today, the authority owes $8.5 billion and is paying a staggering $500 million yearly in debt service, which has forced it to neglect maintenance, shelve expansion plans, and cut service. It also needed a $160 million bailout from taxpayers to close a budget deficit last year.

Politicians increasingly use municipal debt to create the false appearance that they are balancing the budget. One feature of muni debt that helps the pols is the sheer complexity of governments' relationship with the independent authorities. Back in 1990, New York State faced a deep budget crisis, but Governor Mario Cuomo didn't want to borrow money to fund day-to-day spending, a fiscal no-no. Instead, he sold Attica Prison to an authority, the New York State Urban Development Corporation, for $200 million, which the authority raised through a bond issue, with the understanding that the state would continue to use the prison over the next 30 years by making yearly payments to the authority. This fiscal trick amounted to the state's borrowing the money itself, of course, but it didn't look as improvident. Then, piling irresponsibility atop chicanery, the authority frequently refinanced the debt, so that it still owes $300 million on the original offering, even after paying bondholders $242 million.

The other way that muni debt camouflages politicians' fiscal extravagance is with repayments on bonds that stretch far into the future. Politicians tend to consider debt more palatable than tax increases or spending cuts. New York's current lieutenant governor, Richard Ravitch, has proposed $2 billion in borrowing this year to close the state's budget gap, even though financing day-to-day operations this way brought New York City to its knees 35 years ago. (Ravitch, ironically, helped engineer the bailout of Gotham back then.) Closing the state's budget gap with spending cuts would be "totally disconnected from reality," Ravitch claimed, in justifying the new debt: voters aren't ready to accept service reductions. He apparently thinks that New Yorkers are okay with adding more debt, even though they've voted down numerous bond offerings when given the chance.

States and cities have also used muni debt to play dangerous games in the stock and bond markets. A particularly potent weapon in the politicians' debt arsenal is the so-called pension-obligation bond, the municipal equivalent of borrowing money on your credit card to make contributions to your IRA. Oakland issued the first pension-obligation bonds, which were tax-free, in 1985, and invested the proceeds in taxable securities, which paid the city a higher interest rate than it had to pay on the bonds. Oakland then banked the difference in its pension fund for city workers. The move proved too slick for Washington, however, which eliminated pension-obligation bonds' tax-free status in the Tax Reform Act of 1986.

But that didn't end their use. During the early 1990s, governments started playing a risky arbitrage game in which they issued bonds and then invested the money in the stock market, hoping that the market would outperform the bonds. For a while, the strategy worked: the market was rebounding from the 1989–90 recession, and returns were good. But over the long term, it proved impossible for the stock market to keep up with the returns that the pension bonds were offering. As the Center for State and Local Government Excellence noted in a report earlier this year, most pension bonds issued since 1992 have been money losers for states and cities.

Take New Jersey, whose fall into fiscal chaos has been accelerated by pension bonds. During the mid-1990s, the pension system for state and local employees needed shoring up because the previous governor had overvalued the system's assets. Governor Christine Todd Whitman took the easy way out, deciding to finance the state's payments into the system by taking the proceeds from a pension-bond sale and investing them in the stock market. The market was near its peak; since then, of course, it has endured a decade of essentially zero growth. So Jersey's returns were dismal: the state now has so little cash that it has been skipping its payments into the pension system. Now, to add insult to injury, it must start paying back the bonds that it issued. Some actuaries say that the state's pension system will either go bankrupt in the next several years, testing the limits of guaranteed public-employee pensions, or need a federal bailout. "These pension funds are often run for a political rate of return to keep the pension benefits high and put off the costs," says Rick Dreyfuss, an actuary and a fellow at the Commonwealth Foundation in Harrisburg, Pennsylvania. "It's a recipe for disaster."

Or look at Oregon. Seven years ago, officials there began to push for a change in the state's constitution to let its pension funds issue bonds, saying that it would save millions of dollars. The Statesman Journal in Salem called the idea "a no-brainer," while the Oregonian claimed that it constituted "state government acting prudently, like a business." The measure passed, and Oregon municipalities loaded up with billions in pension debt, which they invested in the market, often using risky investment strategies in an attempt to beat what the bonds paid out in interest. That approach proved ruinous during the financial crisis. In 2008, Oregon pension funds lost 27 percent of their value, the largest decline in the state's history. Oregon taxpayers are now staring at a $1.2 billion hike in the state's contributions to the pension system. "That could force school districts, cities and counties to lay off workers or cut services as they struggle to pay higher pension contributions," the Oregonian noted, conveniently omitting its earlier support for the bonds.

All these debt-enabled abuses, extravagant spending, concealment of budgetary problems, and risky investment strategies, came to a head in the second half of 2008, when spooked investors withdrew from the muni-bond market in droves. A downturn in tax revenues had revealed how little breathing room some local governments had left themselves to pay their debts; also, several insurers that typically backed muni bonds had exited the market, leaving buyers unprotected against defaults. The investors' flight should have signaled to cities and states that it was past time to reform their debt practices.

Instead, the federal government reopened the muni-bond business by stepping in with a new kind of municipal offering, the Build America Bond, which is taxable but can offer an attractively high interest rate because it's partly subsidized by Washington. Municipalities enthusiastically embraced the new bonds, racking up another $58 billion in debt in 2009. It's no surprise that the states in the worst fiscal shape, thanks partly to previous borrowing, made the biggest use of the bonds; California led the pack.

Build America Bonds have worsened what economists describe as a misallocation of resources that results from municipal debt's favored status. Muni bonds are usually tax-free, and numerous studies have estimated that of the enormous tax revenues forgone by the government, 20 to 33 percent goes to the bond buyers, who tend to be high-income individuals. That's a huge incentive not to invest in the private sector by buying, say, corporate bonds or equities. Economist Peter Fortune estimated in the early nineties that the misallocation reduced private-sector output by billions of dollars a year; the amount is obviously far larger now. The introduction of Build America Bonds, attracting a whole new class of investor with subsidized interest rates, will make the misallocation even greater.

The current crisis in state and local budgets may be the best opportunity in ages to bring reform to the muni market. Critics have argued in the past that the government should abolish the federal-tax-exempt status of municipal bonds. Those arguments have gone nowhere because the market has powerful defenders: the Wall Street firms that earn underwriting fees selling bonds; the investors benefiting from subsidies; and state and local politicians making liberal use of the debt.

Still, Congress has narrowed muni debt's tax-free status in the past to eliminate egregious abuses, and it's time to do so again. One place to start is municipal debt used to finance for-profit businesses, a job that governments are ill equipped to perform capably. Take the city of El Monte, California, which subsidized the opening of a handful of local car dealerships and watched three of them go bust. When cities take the process a step further and get into bidding wars with one another for things like the NASCAR Hall of Fame, they drive up the price of the attractions, ultimately at a heavy taxpayer cost. Congress should revoke the tax exemption for bonds in all these cases.

Another key reform is to restrain or eliminate the independent authorities. New Jersey has already moved in this direction with a 2008 referendum, approved by voters, constraining the authorities' ability to issue debt without voter approval. Meantime, in California, critics of local redevelopment authorities are intensifying their efforts to rein in or eliminate these bodies. Taxpayer groups point to studies showing that regions of the state that have created the authorities don't do much better than regions that lack them. If that's true, much of the real-estate tax money that they collect winds up wasted, including money that could help fund basic services like schools. "Redevelopment is an ever-growing blight on education finance" because of the tax dollars it siphons away, argued Doug McNea, president of the Silicon Valley Taxpayers Association, in the San Jose Mercury News recently.

Finally, states and cities need to limit debt-related fiscal maneuvers. They could begin with sophisticated investment vehicles like swaps, which few politicians understand. In recent years, some municipalities tried to insure their bonds against rising interest rates (and, consequently, rising payouts to bondholders) by purchasing swaps contracts with Wall Street firms: if rates rose, the firms would pay the governments; if rates fell, the governments would pay the firms. The arrangement would have worked if rates had risen or fallen modestly. But what has happened since 2008, of course, is that interest rates have plummeted, leaving some governments on the hook for huge payouts. According to Pennsylvania's auditor general, 107 of the state's 500 school districts entered into swaps, some approved even though local school board members didn't understand the deals. One district, Bethlehem, had to pay a $12.3 million fee on a deal gone bad. The state has since proposed banning school districts from buying swaps.

Taxpayers are slowly realizing that their states and municipalities face growing costs, above all, debt and pension obligations, that will be hard to reduce. The squeeze is already forcing cities and states to cut basic services, since they can't risk defaulting on their debt. But these politically unpalatable moves are troubling more and more observers of the muni market. Nicole Gelinas has warned in these pages that "once state and local governments have borrowed too much, they may well find a way not to pay their lenders back" (see "Beware the Muni-Bond Bubble," Spring 2010). Similarly, Rick Bookstaber, a senior policy advisor to the Securities and Exchange Commission, shook the market recently by observing that it has all the characteristics in place for a crisis that might unfold like the home-foreclosure mess: a few municipalities could declare bankruptcy, decline to honor their debts, and unleash "a widespread cascade in defaults." If that painful scenario emerges, it will be because we have too long ignored how politicians have become addicted to debt.

Mr. Malanga is the senior editor of City Journal and a senior fellow at the Manhattan Institute. He is the author of the forthcoming Shakedown: The Continuing Conspiracy Against the American Taxpayer.



February 16, 2010

California Law Review

Silicon Valley Taxpayers Association: Local Voters, State Propositions, and the Fate of Property Assessments

by Michael J. McCarthy

[This article is also posted at the California Law Review web site, here.]

Since 1978, fiscal limitations imposed by the California Constitution have curbed the ability of local governments to raise revenue. Recently, the California Supreme Court made one of the most important of these limitations even more restrictive. In Silicon Valley Taxpayers Association, Inc. v. Santa Clara County Open Space Authority, the court held that a property assessment intended to fund open space land acquisition and preservation did not meet Proposition 218’s procedural and substantive requirements. By eliminating the deferential standard of review traditionally accorded to this type of agency determination, Silicon Valley privileges state voters over local voters and elevates fiscal limitation to the level of core California constitutional issues. Although the court based its decision on the voters’ expressed intent to limit property taxes, as demonstrated in two popular voter initiatives, the decision’s departure from conventional jurisprudence will permanently constrain the ability of local governments in California to fund essential programs.




December 19, 2008

San Jose Mercury News

Letters: Taxation Through Misrepresentation


[This letter is also posted at the San Jose Mercury News web site, here.]

"Taxation through misrepresentation" best describes legislative Democrats' blatant tax increase package. Presenting a $9.4 billion tax increase as being revenue neutral and taxes masquerading as fees to bypass the two-thirds vote requirement are dishonest. How can the Democrats in Sacramento do this and claim they are attempting to compromise?

This is not an end-run around Republicans. It's an unconstitutional attempt to bully taxpayers. On Dec. 1, these same legislators took an oath of office to defend the California Constitution, not ignore it when convenient.

Maybe the Republicans should start throwing shoes at the Democrats. Then others might begin to appreciate their efforts to save the California economy as we taxpayers do.

- Doug McNea

President, Silicon Valley Taxpayers' Association



September 20, 2008

San Francisco Chronicle

Measures Would Hike Sales Taxes for Transit

by Rachel Gordon



[This article is also posted at the San Francisco Chronicle web site, here.]

Voters in the North Bay will decide Nov. 4 whether to support a proposed tax increase to fund commuter rail service between Sonoma and Marin counties, while voters in the South Bay will consider a tax hike to help pay for a BART extension into Silicon Valley.

The measures are in addition to a statewide proposal on the November ballot that asks voters to approve nearly $10 billion in bond sales to fund a high-speed rail system in California.

Measure Q, on the ballots in Marin and Sonoma counties, would raise the sales tax a quarter-cent to build and operate a 70-mile commuter train operation between Cloverdale and Larkspur.

Voters narrowly rejected a similar proposal two years ago. Although 65.3 percent of the voters were in favor, the proposal failed to secure the minimum two-thirds approval required for passage. This year's measure also needs at least two-thirds support to pass.

The proposed route would run parallel to Highway 101 and stop at 14 stations. A separate bike and pedestrian path would be built alongside. Construction costs have been pegged at $541 million, with annual operating costs adding $19 million more.

Proponents say the project would help alleviate congestion along the traffic-choked freeway corridor by getting some commuters out of their cars, which would also help reduce greenhouse gas emissions.

"It's really important for us to provide a second spine for our transportation system," said Marin County Supervisor Charles McGlashan, chair of the Sonoma-Marin Area Rail Transit district and a chief proponent of the so-called SMART train project.

Opposition largely comes from anti-tax groups and Marin residents who fear the new train would spur development along the transit corridor and change the small-town feel of their county.

Joy Dahlgren, a representative of the group North Bay Citizens for Effective Transportation, which opposes the ballot measure, questioned the true benefits of the proposed SMART train, given the projected ridership of 5,300 boardings a day.

"It's not the right kind of area for a train; there isn't a concentration of jobs and housing along the route," she said. Instead, she favors widening Highway 101 and expanding existing bus service.

In the South Bay, voters will decide whether to increase the sales tax in Santa Clara County by one-eighth of a cent to help fund a BART extension into Silicon Valley from Fremont.

The $6 billion project would be funded with a combination of local, state and federal funds, and calls for building BART stations in Milpitas, San Jose and Santa Clara.

Revenue from the proposed sales tax increase would generate an estimated $42 million a year to help fund the 16.1 mile BART extension. If Measure B is approved, the higher tax wouldn't kick in until federal and state money is secured to build the extension.

Proponents say the expansion, with a planned start date in 2017, would generate an additional 100,000 trips a day on BART. The average daily ridership on the regional rail system is now close to 370,000. Under the plan, the Santa Clara Valley Transportation Authority would pay BART to operate the extension.

The Silicon Valley Taxpayers Association is leading the opposition, with representatives fearing that the price of the project would escalate and that money would be funneled from existing transportation projects and service to pay for the BART extension. Approval of two-thirds or better is needed for passage.

Measure Q

Who: Voters in Marin County and Sonoma County

What: Raise the sales tax a quarter-cent

For what: To build and operate the proposed SMART train system, a 70-mile commuter rail line running between Cloverdale in Sonoma County and Larkspur in Marin County, parallel to Highway 101. An adjacent pedestrian and bike path would be constructed

Duration: Tax increase would sunset after 20 years

Caveat: Requires at least two-thirds approval to win

Measure B

Who: Voters in Santa Clara County

What: Raise the sales tax one-eighth a cent

For what: To help fund a BART extension into Silicon Valley from Fremont, with stations in Milpitas, San Jose and Santa Clara.

Duration: Tax would sunset after 30 years.

Caveat: Requires at least two-thirds approval to win.

---

E-mail Rachel Gordon at rgordon@sfchronicle.com.

This article appeared on page B - 1 of the San Francisco Chronicle.


August 8, 2008

San Jose Mercury News

Voters to Decide Another BART Tax

1/8-cent Sales Tax OK'd for November Ballot

by Gary Richards

[This article is also posted at the San Jose Mercury News web site, here.]

[A version of this artlcle also appeared in the Palo Alto Daily News.] 

The Valley Transportation Authority approved putting a sales tax measure on the November ballot after a nearly two-hour debate Thursday night over how to cover the cost of someday running BART trains from Fremont to the South Bay.

If two-thirds of voters approve, the measure would raise the sales tax in Santa Clara County by one-eighth of a cent. The increase would remain in effect for 30 years, but it would not be collected until the Federal Transit Administration agrees to contribute $750 million to help build the $6 billion, 16.1-mile BART extension.

Although county residents are already paying a half-cent sales tax for BART and other transit projects, supporters say more money is needed to operate the future BART line. They cite shortfalls in tax collections and the need to show federal officials that the VTA has money to operate BART without cutting current transit services.

But the financial troubles have reignited debate over whether BART is a good investment and whether it will ever carry as many riders as projected, 98,000 a day.

The tax was approved in a 9-3 vote.

"The entire (transit system) is made better because of BART," said San Jose City Councilman Sam Liccardo, a VTA board member. "This is a small price to be paying."

Nearly 40 people spoke on the tax proposal, with a slight majority in favor of bringing BART to San Jose, including former Santa Clara County Supervisor Rod Diridon.

"You can't get a tax for light rail," he said. "You can't get a tax for buses. You can't get a tax for highways. But you can get a tax for BART."

Critics do not concur

Not everyone agreed.

Doug McNea, president of the Silicon Valley Taxpayers' Association, criticized the measure, saying, "The VTA is a taxpayers' sink hole."

And Greg Perry, a former VTA board member, opposed the tax, saying, "You don't have enough money to build this project," even with the tax.

The tax proposal comes at a time when the economy is voters' chief worry - and at a time when multiple tax and bond measures will be on the ballot.

County voters also will be asked to pass an $840 million bond measure to pay for earthquake retrofitting at Valley Medical Center. San Jose voters will be asked to renew, with modifications, two phone taxes that together generate nearly $50 million a year to support critical services such as the 911 emergency dispatch system. Earlier this week, Gov. Arnold Schwarzenegger floated the idea of temporarily raising the state sales tax by 1 percent for three years to cover the state's massive $15.2 budget deficit.

And a $10 billion statewide bond will be on the ballot to begin construction of a high-speed rail line from Los Angeles to the Bay Area.

The earliest groundbreaking could occur on the BART extension is 2013, with the line opening maybe five years later. But those dates are not firm and depend on nearly $1.5 billion in federal and state funds for construction.

The VTA says the BART tax would raise $42 million to $50 million a year to cover operating and maintenance costs. The sales tax now is 8.25 percent.

The project has long been dogged by controversy. Three years ago the Federal Transit Administration put the extension on its "not recommended" list, and a grand jury advised against building the line. The transit administration also told the VTA that until the agency could come up with a funding source to cover daily operating and maintenance costs, the project had little chance of getting $750 million in federal assistance.

The proposed sales tax would fund only one project, BART, unlike past measures that included dozens of projects, from road widenings to transit extensions.

This will be the second time voters have faced tax measures to pay for BART. Eight years ago, by a 71 percent margin, they approved a half-cent increase that is expected to bring in $8.7 billion by 2036, nearly $2 billion less than originally forecast.

Trolley project at risk

That shortfall means many of the nearly two dozen projects included in the 2000 tax measure may not get built. At great risk if BART moves ahead in any form is a light-rail extension to Eastridge Mall.

That extension would be short, just 2.6 miles, but costly at $334 million. And ridership is estimated to be only slightly more than 2,000 a day. As low as that is, VTA General Manager Michael Burns said he believes the estimate may be too high.

Pre-engineering work is almost done on the trolley line, and a decision must be made late this year on whether to proceed with construction.

Contact Gary Richards at mrroadshow@mercurynews.com or (408) 920-5335.


July 30, 2008

Milpitas Post

State Supreme Court Corrects an Over-reaching Agency

by Milpitas Post Staff

[This article is also posted at the Milpitas Post, here.]  

SOMETIMES government agencies that push the envelope to make easier the extracting of taxpayer dollars get a needed pushback from the courts. That's what seems to have happened in the recent decision of California's highest court. They overturned a lower court in finding that the Santa Clara County Open Space Authority that includes Milpitas, San Jose, Santa Clara, Morgan Hill and unincorporated county lands, illegally collected a $20 per year property tax assessment since 2001.

It decreed that when the state's voters approved Proposition 218 in 1996, it meant that a two-thirds majority was needed to enact this kind of tax.

The open space district is a low-profile agency which came into being before Proposition 218, so it already has a $12 per parcel property tax assessment in place, which raises $4 million a year. This has enabled the district to acquire and maintain some 13,000 acres even without the $20 in question. That money, now totaling more than $56 million is untouched, because of the lawsuit brought by the Silicon Valley Taxpayers Association and its cohort the Pacific Legal Foundation.

What is going to happen to that $56 million is unclear because the court didn't address the issue. Presumably the district could mail every taxpayer his or her money back with interest and perhaps an apology, but many people have died or moved since the first assessments were collected.

Securing open space in our rapidly developing valley is an important need that far-sighted environmentalists have pushed for over the years. The conventional wisdom, however, is that a two-thirds majority of voters would be a hard sell. Thus end runs around Proposition 218's "Right to Vote on Taxes Act" are often explored by all kinds of local governments.

Whether these techniques are examples of selfl

Voters

ess devotion to the public good or examples of cunning lawyers finding loopholes to permit agencies to do what they want to do, is in the eye of the beholder.

What is clear is that a lot of cities, counties and special districts around the state have to go back to the drawing board. And Patrick Congdon, the open space authority's general manager, and the elected board of directors, ought to be thinking about that $56 million and start some straight talk with the taxpaying public about how it will be returned.



July 27, 2008

San Jose Mercury News

For Open Space Agency, It's Time to Pay Up

Plan in the Works to Refund More than 250,000 Homeowners Who Paid Parcel Fee

by  Paul Rogers, Mercury News

[This article is also posted at the San Jose Mercury News web site, here.


How do you give away $56 million?

It's not the slogan of a new state lottery game.

It's a very real dilemma facing the Santa Clara County Open Space Authority, a San Jose government agency set up nearly 20 years ago to preserve parkland. This month, the state Supreme Court struck down a $20 per-parcel fee the agency put in place in 2001, nullifying more than half its annual budget.

On Friday, the open space authority's general manager, Patrick Congdon, said he expects the agency will give the money back - roughly $135 for every homeowner within the district's boundaries, which include San Jose, Campbell, Milpitas, Morgan Hill and Santa Clara, as well as much of unincorporated Santa Clara County.

But don't expect a check in the mail next week.

"It's going to be a complex process," Congdon said.

Major questions remain unanswered. More than 250,000 property owners are affected. Yet many have moved away in the six years the assessment has been collected on Silicon Valley property tax bills. Others have died. And new people have moved in.

The answers are likely to come in the next two months, Congdon said.

That's when the case will be sent back to the Santa Clara County Superior Court where the suit was first filed in 2002 by the Silicon Valley Taxpayers' Association.

Working out details

The judge there is expected to decide whether each property owner will get an automatic credit on their property tax bill, or whether people will be required to send in a letter or voucher to receive the refund. The judge will also decide what to do with money paid by property owners who can't be located, who've died, or who want to donate it to the open space agency, as well as whether to refund only the $52 million collected, or also the $4 million earned in interest.

"Our position is that we'd like to see all the money returned to taxpayers. It was collected illegally," said Doug McNea, president of the Silicon Valley Taxpayers' Association. "The court determined it was an unjust tax, so it's only logical."

The court essentially agreed with the taxpayers group that the assessment violated Proposition 218, a measure passed by state voters in 1996. Because the funding benefited the whole county, the assessment was essentially a tax and should have been approved by all county voters, not just the property owners who turned in special ballots in a 2001 mail-in election, the court found.

"We think it is a severe setback to the interests of open space in the future," said Mary Davey, a board member of the Midpeninsula Regional Open Space District, a public agency that buys land
from the Los Gatos Hills to Belmont.

Davey said that without the money, the open space agency will not be able to buy land or development rights around places like Coyote Valley, the Mount Hamilton foothills and Sargent Ranch, a huge parcel south of Gilroy.

Although polls show that valley residents generally favor environmental causes, the open space authority is suddenly cash-poor. Its primary remaining source of funding is a $12 per year assessment from 1994 that has been upheld by courts. That brings in $4 million a year, hardly enough to buy significant-sized lands. It lost $8 million a year in the court ruling.

If it wants more, it will have to go back to voters. And it must win a two-thirds majority, as required for new taxes under Proposition 218 and its predecessor, landmark Proposition 13 from 1978.

"The two-thirds margin makes it a lot tougher. The question is not do people love parks. People do. The question is do two-thirds of the people love parks?" said Tim Ahern, spokesman for the Trust for Public Land, a land preservation group in San Francisco.

Bouncing back

Congdon said his agency's seven-member board will be studying everything from a sales tax to a parcel tax. But he said he doesn't expect anything to be placed on the ballot this year, or perhaps even by 2010 until he, board members and park lovers meet with Santa Clara County farm groups, taxpayer groups, business leaders and others to find some consensus that might have a chance at clearing the two-thirds standard at the ballot box.

Going forward, Congdon said he will highlight that the agency has preserved 14,494 acres for the public and wildlife, expanding green space around Calero Reservoir, Alum Rock Park and Henry W. Coe State Park in Morgan Hill.

"I think we have done some really good things," Congdon said. "We feel confident that we should move forward and pursue additional funding."

Other agencies have had a mixed record winning two-thirds. In 2000, Santa Clara County voters approved a half-cent sales tax designed to bring BART to San Jose by a 70 percent margin. On the same ballot, they approved a $39 parcel tax by 67 percent to fund flood control and creek restoration. But economic times were better then.

Voters in San Mateo County rejected a one-eighth-cent sales tax increase for parks in 2006, giving it only 55 percent support, and again this June, giving it 60 percent.

Getting the votes

Ironically, the city and county leaders who first helped set up the Santa Clara County Open Space Authority in the late 1980s knew then that two-thirds would pose perhaps an insurmountable bar for the new agency. They put a $25 parcel tax on the ballot in 1990, and even though it was backed by business groups, with David Packard as co-chairman, it failed with only 63 percent.

"We were very concerned it would be in vain," said former San Jose Councilwoman Judy Stabile. "We knew Prop. 13 was here to stay, but we knew we were going to have to try or see more of the hillsides developed."

After that 1990 loss, the agency's board, led for a time by now-Congressman Mike Honda, turned to the benefit assessment - a fee paid by property owners for a specific government service such as street lights - which Los Angeles had successfully passed in 1992 with only a majority vote. After getting the $12 assessment approved in 1994, the agency made the error of trying for a $20 assessment in 2000, after taxpayer groups passed Proposition 218 in 1996. This put sharper limits on the agency's approach and ultimately led to the court challenge.

Now the long-struggling agency will start over.

"People should understand we are around for the long haul," Congdon said. "We'll do things differently. We've learned from this. We don't want to repeat history."

Contact Paul Rogers at progers@mercurynews.com or (408) 920-5045.




July 23, 2008

The Antiplanner (a project of the Thoreau Institute)

Smart and Dumb at VTA

[This article is also posted at The Antiplanner, here.] 

San Jose’s Valley Transportation Authority (VTA) has announced that it will start a bus-rapid transit service [BRT] from Santa Clara to Alum Rock. This was originally supposed to be a light-rail line projected to cost nearly $400 million. As bus-rapid transit, it will cost only $128 million. The light-rail line would not open until 2021; BRT will begin in 2012. Light rail would operate every 15 minutes; BRT every six. BRT was also projected to attract nearly three times as many riders at a lower operating cost than light rail.

Has sanity somehow struck the nation’s worst-managed transit agency? Apparently not, for VTA also looks set to ask voters for a 1/8-cent sales tax to pay for a BART line to San Jose. This sales tax would raise the $42 million per year that VTA estimates it needs just to operate this line. Actual construction, the cost of which is now estimated to be well over $6 billion, would have to be funded out of other money.

This BART line is quite possibly the dumbest rail transit proposal in a nation full of dumb rail transit proposals. Although the people who ride it naturally love BART, professional transit experts widely regarded it as a failure. It cost far more than projected, does not carry as many people as projected, and steals money from other Bay Area transit agencies that could carry far more people at a far lower cost.

Since 1982, BART ridership has nearly doubled, increasing by about 50 million trips per year. Bay Area bus ridership, meanwhile, has fallen by 140 million trips per year, mainly because bus agencies have been deprived of funds. What a success story.

In 2003, BART was extended to the San Francisco Airport, and ridership was so far below predictions that the San Mateo Transit Agency, which was obligated to fund operating costs, had to cut bus service to keep it going. The latest ridership numbers for the line, about 35,000 trips per day, are a third lower than the 50,000 that was projected.

The BART-to-San-Jose project will be far dumber than the Airport BART line. As previously noted here the environmental impact report for this line predicts that building it will have virtually no effect on traffic congestion. The line connects with the rest of the BART system at Fremont, so anyone wanting to go from San Jose to San Francisco would end up taking an indirect route through Oakland and the dreaded Oakland Wye, which is very slow and overcapacity even without new trains from San Jose. This would take more than the hour and 20 minutes that is required to drive the distance in traffic.

The Antiplanner suspects that VTA is going for bus-rapid transit on the Alum Rock route only because it is so strapped for funds that it has to cut costs. If it had plenty of money, it would probably build light rail even if though it is projected to carry barely more than a third of BRT riders.

The good news is that many normally pro-transit groups, such as the Sierra Club and the Bay Area Transportation Land-Use Coalition, oppose building BART to San Jose because of its great expense. Increasing frequencies on the San Jose-to-San Francisco CalTrains commuter trains, they say, would cost far less and be a far more cost-effective way of improving transit. Between these groups and the Silicon Valley Taxpayers Association, it seems likely that opponents can persuade enough people to vote against the 1/8th-cent sales tax that it will not get the supermajority required for passage.

This entry was posted on Wednesday, July 23rd, 2008 at 12:00 am.



July 22, 2008

San Jose Mercury News

San Jose Banking Land around Town

Some deals don't pay off; effort questioned amid poor economy

by Joshua Molina, Mercury News

[This article is also posted at the San Jose Mercury News, here.]


The San Jose Redevelopment Agency has spent more than $52 million in the past five years to buy a dozen properties around town. The reasons have ranged from building high-rise housing to attracting a baseball stadium. But in most cases, the land remains undeveloped.


The agency's avowed strategy - to control key parcels that can further the city's multibillion-dollar urban renewal effort - has served it well over the past three decades. City officials note that they have been able to boost downtown by buying and holding land while waiting for the right project.

But given how far downtown has come in the last three decades, some critics say the city should now adopt a more rigorous process to decide which land to buy and what to do with it.

Bob Brownstein, budget adviser to former Mayor Susan Hammer, argues that the city no longer needs to bend over backward to attract developers. "In 1980, if you could get someone to show up, you'd say 'We'll take it,' " said Brownstein, now the policy director at Working Partnerships, a union-affiliated think tank.

He contends that the agency should consider potential benefits to San Jose's cash-strapped general fund, which pays for most of the city's annual operations, when buying land or subsidizing developers. Although the agency has a hefty $200 million budget for capital expenditures and investment, fed by assessments on property in its 16 redevelopment areas, the general fund is riddled with multimillion-dollar shortfalls year after year.

Asking how many high-paying jobs a given project might one day produce before deciding to invest could help the city plug those deficits, Brownstein says.

City officials counter that longstanding goals to draw more retailers to the city core - and more residents to shop there - are more important than strict return on the dollar.

For example, San Jose in 2001 acquired the 1.1 acres of land where the ritzy Three Sixty Residences high-rise is now going up for $10 million - and sold it nearly four years later to the project's developers for the same amount.

'Corporate welfare'

Doug McNea, president of the Silicon Valley Taxpayers Association, looks at such deals and labels the redevelopment agency "a corporate welfare system."

But agency chief Harry Mavrogenes said the weak economy has forced his team to pursue increasingly creative ways to cut deals. Added deputy executive director Janet Kern: "It's challenging to get developers, because nobody knows what the market is doing right now."

In another instance of a deal done for reasons besides strict financial return, the agency purchased land at 438 Coleman Ave. for $815,000 and now leases it for $1 a year to the Friends of Guadalupe River Park & Gardens. The non-profit oversees a three-mile stretch of park land that runs along the river from downtown to the airport.

Other parcels the agency has snapped up might not be developed for years - if at all. Those include the shuttered Camera One cinema building near the Three Sixty Residences and a former auto-body shop on King Road on the East Side, which Mavrogenes said is being considered for everything from housing to retail to a mixed-used combination of the two.

City leaders contend that rolling the dice on land when it becomes available - even before there's a legitimate project before them - has been a wise way to spend the public's money.

'We can be patient'

"We are going to be around a long time," said Mayor Chuck Reed. "We can be patient. It gives us more development opportunities if we control the land." Indeed, the dozen parcels represent just 19 percent of the 2.5 million square feet of property the agency owns around town, most of that in the city core.

Reed also noted that, while the redevelopment agency does run a financial analysis on private projects in which it plans to invest more than $1 million, doing a substantive analysis when buying every piece of land is unrealistic "unless you are willing to make a lot of assumptions."

And sometimes, the agency's best-laid plans run aground, forcing officials to vamp. San Jose has spent a collective $20.2 million since 2003 on five downtown parcels near the Diridon train station. The city started buying those parcels in hopes of building a baseball stadium and luring the Oakland A's. Such a deal never happened.

Still, planners are moving ahead with more purchases in the area, which they now say would be a perfect site for a major corporate headquarters - a company on the scale of eBay or Adobe Systems. Ultimately, the redevelopment agency dreams of acquiring 13 parcels over 13.5 acres for a massive development that also would include 800 homes, stores, restaurants and office space.

A spokesman for the California Redevelopment Association - a trade organization made up of redevelopment agencies across the state - said the city's approach could well pay off. "In order to do a project, oftentimes you need to assemble a number of smaller parcels," said Tom Hart. "What San Jose has done is a wonderful illustration of how it works."

But McNea calls the phantom ballpark project emblematic of the agency's wasteful spending. For every success, he said, there are more examples of failure.

"After all these years of redevelopment downtown," he added, "San Jose is still not a destination."


Contact Joshua Molina at jmolina@mercurynews.com or (408) 275-2002.


July 21, 2008

Contra Costa Times

Victory for Taxpayers

MediaNews Editorial

[This article is also posted at the Contra Costa Times web site, here.]

FOUR YEARS AGO, Contra Costa supervisors and East Bay regional park officials put together a proposal to buy undeveloped land in 13 targeted areas throughout Contra Costa County.

The concept of buying land to preserve open space is an admirable one. But the method of obtaining the money though a special benefit assessment district was flawed.

It ignored Proposition 218's mandate that assessment districts, which require a majority vote of property owners, confer a specific benefit. A general, nonspecific benefit, such as that offered by the park measure, requires a parcel tax, which needs a two-thirds vote to pass.

That is why the Times opposed the tax method, even though we strongly supported and continue to support park expansion. Fortunately, voters rejected the levy by a 54-46 majority in July of 2004.

However, in 2001, Santa Clara County voters did approve a similar tax to buy open space. More than $50 million has been collected and held pending the outcome of litigation against the tax.

Finally, seven years after Santa Clara's successful vote and four years after Contra Costa's failed vote, the California Supreme Court has clarified the issue by striking down Santa Clara's tax.

In a unanimous decision, the state's highest court ruled that the 2001 special assessment by Santa Clara County's Open Space Authority violated Proposition 218.

The ruling, written by Justice Ming Chin, overturned a San Jose appeals court, which erroneously sided with the Open Space Authority in 2005.

The Supreme Court concluded that the open space district failed to specify how the special assessment funding would be used, and how it would benefit individual homeowners hit with the tax increase, thus violating Proposition 218.

The court's definitive ruling is a victory for taxpayers who supported Prop. 218 in an effort to protect themselves from numerous attempts by government officials to get around Proposition 13's property tax provisions.

The Supreme Court's decision may make raising funds more difficult, but far from impossible.

Governments can still raise money by majority vote in special assessment districts, but there must be a specific benefit for those paying the tax.

Raising money for a general benefit can still be achieved through parcel taxes with a two-thirds vote. Also, revenue for capital improvements can be raised with bond measures, which need a two-thirds vote, or a 55-percent majority for school districts.

We trust that local and regional government officials will heed the court's ruling on Prop. 218 and refrain from future attempts to get around voter-approved restrictions on raising taxes.


July 17, 2008

KCBS 740 AM

VTA Expected to Ask Voters on Tax Increase for BART

[This article is also posted at KCBS's web site, here.]

San Jose, Calif. (KCBS/Mercury News)  -- The Valley Transportation Authority (VTA) is planning to ask South Bay voters to decide on a one-eighth-cent tax increase that would raise funds to build a BART line from Fremont to San Jose.

The measure would raise about $42 million a year, which would all go toward the operating and maintenance costs of the train line.

Critics of the measure argue that this is the wrong time to ask voters for any tax increase.

“This is the wrong time to be raising taxes anywhere,” said Doug McNae, President of the Silicon Valley Tax Payers Association. “With the downturn in the economy, we shouldn’t be raising any taxes at this point. You know, working families are struggling enough without raising the tax burden on them.”

VTA officials, however, are optimistic. Carl Guardino, chief executive of the Silicon Valley Leadership Group, said that despite the bad economy the need for public transportation is greater than ever.

“The support is as strong for bringing BART here as it ever has been. People want alternatives to the automobile, to $5 gas prices, to climate change concerns and to over dependence on foreign oil. And BART is a proven winner, carrying 370,000 daily trips today day, and this small, 16 mile extension, would carry another 100,000 trips a day.”

If approved, the tax would only raise an estimated $42 million a year, almost $8 million short of the $50 million needed to run BART. VTA officials said they are not concerned and believe that $42 million will be enough.

But even if voters approve the measure, the tax increase will not go into effect immediately. Guardino said that the only way the tax will kick in is if the state and federal government agree to provide the other billion dollars needed to fund the project.

KCBS' Mike Colgan reports. (Click here for podcast featuring SVTA President Doug McNea; running time is approximately 55 sec.)



July 15, 2008

Morgan Hill Times

Open Space Tax Ruled Illegal

by Morgan Hill Staff

[This article is also posted at the Morgan Hill Times web site, here.]

The California Supreme Court threw a wrench into the Santa Clara County Open Space Authority's plans when it ruled that $56 million in taxes were illegally collected.

In 2001, the county's Open Space Authority established the assessment on property. The money was to be used to purchase open space, much of which is located in South County. But justices Monday said the assessment violated Proposition 218, "The Right to Vote on Taxes Act," passed by voters in 1996.

Prop 218 limited the ability of local governments to impose real property assessments. Five years later, the Open Space Authority imposed the county-wide tax.

Immediately, the taxpayer's association filed a lawsuit charging that the tax was illegal because it did not meet Prop 218's "special benefit" distinction.

"It has been a long haul, seven years," said Doug McNea, president of the Silicon Valley Taxpayer's Association. "From the very beginning, we have felt that it was an illegal tax, as was proven out by the state in ruling that the tax was in violation, an improper use of prop 218."

Now, McNea added the association will be waiting to see what happens with the tax dollars collected.

"It sounds like (the Open Space Authority) is going to offer some resistance, and unfortunately this will have to be sorted out in the courts," he said. "From here on out, the issue is what's to become of the taxes illegally collected."

Patrick Congdon, general manager of the Open Space Authority, said the agency still has a little more than $4 million coming in from a benefit assessment district that was approved in 1994, and cities including Morgan Hill and Gilroy can receive money from this fund to benefit their urban open space and park programs.


July 15, 2008

KCBS AM 740

Calif. Supreme Court Strikes Down Open Space Assessment

SAN JOSE (KCBS)  -- An assessment levied against Santa Clara County homeowners to pay for the acquisition of open space was struck down Monday by the California Supreme Court.

The Silicon Valley Taxpayers Association sued after the county’s open space authority enacted an assessment to raise money to buy properties that would protect views, sensitive habitats and recreational space.

The court ruled the assessment violated Prop 218 that requires property taxes be approved by a two-thirds majority of voters. The ruling could impact the ability of other government agencies to use similar assessments to raise money.

KCBS' Bob Butler reports. (Click here for podcast featuring SVTA President Doug McNea; running time is approximately 50 sec.)

[This article is also posted on KCBS's web site, here.]





July 15, 2008

San Francisco Chronicle

State Justices Reject Open-Space Assessments

by Bob Egelko, Chronicle Staff Writer

[This article is also posted at the San Francisco Chronicle, here.]

The state Supreme Court dealt a blow to cash-strapped local governments Monday, limiting their ability to pay for open-space acquisitions and other measures that might boost property values by seeking approval from property owners.

Relying on a tax-limiting initiative passed by California voters in 1996, the court unanimously struck down a fee that Santa Clara County property owners had imposed on themselves in a 2001 vote to fund open-space acquisition and preservation. The ruling may prevent local agencies from using the same funding procedure, known as a benefit assessment, to support such programs as mosquito abatement and flood control.

Because open-space acquisition benefits the general public and not just the assessed properties, the court said, it can't be funded by a benefit assessment approved only by property owners. Instead, it must be submitted as a tax measure to local voters - either as a real estate assessment, which requires two-thirds voter approval, or as a sales tax increase, which needs a majority vote.

The ruling "cuts back on assessments that have been well-established," said James Parrinello, lawyer for the Santa Clara Valley Open Space Authority, whose $8 million-a-year assessment was overturned. He said future funding for some flood control, mosquito abatement and firefighting districts financed through benefit assessments could also be affected.

A supporter of the ruling, attorney Jim Burling of the Pacific Legal Foundation, said it "will finally take away the blank checks that local governments have been using for years to impose unlawful taxes disguised as assessments."

Benefit assessments have been used by local agencies in California for about a century but became more common after passage of Proposition 13, a 1978 initiative that rolled back property taxes and required a two-thirds vote for passage of local taxes designated for specific programs.

A benefit assessment allows an agency to charge property owners for a program, like park acquisition, that would make the property more valuable. Homeowners are typically assessed a fixed amount, and owners of commercial buildings are charged some multiple of that amount.

The fee takes effect only if it gets a majority vote under a weighted system that allows the votes according to the amount of each owner's assessment. That system was designed to comply with Proposition 218, a 1996 initiative that allowed assessments only for programs that conferred a "special benefit" on property and required the owners' approval.

Santa Clara County property owners narrowly approved the 2001 proposal providing for a $20 assessment for homeowners, and more for larger buildings, to fund the agency that acquired and maintained open-space lands in an 800-square-mile section of the county. The agency, upheld by lower courts, said the program benefited property owners by improving the environment, the scenery and the desirability of real estate near the newly acquired lands.

In Monday's ruling, however, the court said the agency had failed to show how a general program of buying land for open space - rather than a particular park or parcel - would benefit individual property owners, or would help the 314,000 property owners any more than the rest of the 1.2 million residents.

"For an assessment to be valid, the properties must be assessed in proportion to the special benefits received," said Justice Ming Chin in the court ruling. He said the open-space agency "shows no distinct benefits to particular properties above those which the general public using and enjoying the open space receives."

To learn more

The case is Silicon Valley Taxpayers Association vs. Santa Clara County Open Space Authority, S136468.

The ruling is available at www.courtinfo.ca.gov/opinions/documents/S136468.PDF .

E-mail Bob Egelko at begelko@sfchronicle.com.

This article appeared on page B - 3 of the San Francisco Chronicle. <!--[endif]-->




July 15, 2008

San Jose Mercury News

Court Voids Santa Clara County Open-Space Tax

by Howard Mintz, Mercury News

[This article appeared on page A1, and is also posted at the San Jose Mercury News web site, here.]

The California Supreme Court on Monday delivered a double whammy to Silicon Valley environmentalists and cash-strapped cities and counties around the state.

The Supreme Court struck down a special fee on Santa Clara County property owners meant to pay for open-space acquisition, possibly wiping out a $56 million reserve collected over the past seven years.

The decision came in a case that has been closely watched across California, as local government officials have struggled to find new ways to pay for mosquito control, street improvements and other community needs.

The county's Open Space Authority established the property assessment in 2001 to acquire open space from Milpitas to Morgan Hill. After property owners in the area approved the fee in a mail-only vote, 300,000 of them began paying $20 more per year.

But the justices found that the assessment violated Proposition 218. The 12-year-old law is known as the "Right to Vote on Taxes Act" because it was designed to limit local governments' ability to raise revenue without voter approval.

The court said that since the broad land-acquisition plan in theory benefited the entire community, not just property owners who bore the burden of the fee, the assessment should have been put to a countywide vote.

The open-space agency still receives several million dollars under a separate, $12-a-year assessment, which was imposed in 1994 before Proposition 218 went into effect.

But the unanimous decision is expected to paralyze efforts to secure more land and may force Open Space Authority officials to refund the $56 million to property owners, although no decision has been made on whether that money will be returned. The court did not address the fate of the money collected.

"It pretty much puts near-future acquisitions in a state of limbo," said Patrick Congdon, the authority's general manager.

The Supreme Court sided with the Silicon Valley Taxpayers Association, which sued to block the property assessment, arguing that it amounted to a tax.

'An illegal tax'

Taxpayer groups say cities and counties are skirting Proposition 218 to avoid asking voters to approve new revenue - far more difficult because new taxes require a two-thirds vote. Doug McNea, president of the Silicon Valley Taxpayers Association, vowed to push the open-space agency to refund the assessment, calling it "an illegal tax."

Meanwhile, Santa Clara County Counsel Ann Ravel called the ruling "problematic" if the county moves to assess fees for other services - such as a proposal to charge a phone fee to help pay for 911 service. San Jose already has such a fee, which has been placed in doubt by a separate court fight.

San Jose City Attorney Rick Doyle said the Supreme Court's ruling does not bode well for the legal battle over the 911 fee or other fees the city might seek to impose.

"This one is not so good for local governments," Doyle said. "This court is very conservative in how it interprets Prop. 218."

Monday's ruling overturned a San Jose-based appeals court, which upheld the open-space fee in 2005. The Supreme Court concluded that the fee was illegal because the district failed to specify how the money would be spent and was targeting a broad plan.

Open-space officials argued that the fee increase complied with Proposition 218 because affected property owners voted in favor of the assessment after a series of public hearings. But the Supreme Court said the vote was inadequate for a spending plan as broad as preserving open space across the county.

Lawyers on all sides of the issue say local governments now may be forced to turn to voters to approve revenue hikes, unless the assessments are clearly targeted for specific improvements in specific neighborhoods.

Taxpayer advocates say the ruling simply prevents local officials from making an end-run around Proposition 218.

"This was basically a test case," noted Harold Johnson, an attorney with the Pacific Legal Foundation, which sided with the Silicon Valley Taxpayers Association. "Our concern was that the county's strategy here would set off a trend up and down the state."

Statewide concerns

Most open-space districts have not used the Santa Clara County model to pay for acquisitions. But other California city and county agencies filed briefs with the Supreme Court, expressing concern about limits on their ability to raise money. For example, mosquito-control agencies, including Santa Clara County's, said they rely on special assessments on property owners to pay for spraying programs.

For now, the ruling puts a crimp in local efforts to buy open space and stave off development, prompting concerns from environmental groups. Those groups had hoped some of the money could have been used to preserve land near the Mount Hamilton range, around Henry Coe State Park and into the Coyote Valley.

Contact Howard Mintz at hmintz@mercurynews.com or (408) 286-0236.



July 14, 2008

San Jose Mercury News

California High Court Strikes Down Santa Clara County Open Space Tax

by Howard Mintz, Mercury News

[This article is also posted at the Mercury News, here.]

The California Supreme Court today struck down a special fee on Santa Clara County homeowners used to pay for open space acquisition, wiping out more than $50 million collected over the past seven years for parks, trails and other services.

 

In a unanimous ruling, the justices found that the 2001 special assessment by the county’s Open Space Authority violated Proposition 218, a 12-year-old voter-approved law known as the “Right to Vote on Taxes Act.” Proposition 218 was designed to limit local governments’ ability to raise revenue without voter approval.

 

The Supreme Court sided with the Silicon Valley Taxpayers Association, which sued to block the property assessment, arguing that it amounted to a tax that should be approved by all county voters. The Open Space Authority established the property assessment in 2001 to pay for open space from Milpitas to Morgan Hill.

 

With the case tied up in the courts, open space officials had set aside roughly $56 million to preserve open space, as well as pay for other services such as pest control and street improvements. Open space executives said this spring that they would likely refund the money to homeowners if they lost in the state Supreme Court.

 

The Supreme Court ruling overturned a San Jose appeals court, which sided with the Open Space Authority in 2005. The case has been closely watched by local governments across the state, which rely on a variety of special assessments to pay for services.



July 14, 2008

Legal Newsline

Calif. Supreme Court Overturns Open Space Tax

by Chris Rizo

[This article is also posted at LegalNewsline.com, here.]

SAN FRANCISCO (Legal Newsline)-- A special fee on some Silicon Valley homeowners to pay for open space acquisition was struck down Monday by the California Supreme Court.

Over the past seven years, the county of Santa Clara has collected more than $50 million in fees to bankroll green space acquisition and pay for parks and trails.

But the state’s highest court found that the 2001 special assessment by the county’s Open Space Authority violated a 12-year-old voter-approved law known as the “Right to Vote on Taxes Act.”

Outlined in Proposition 218, the law limited local governments’ ability to raise taxes without voter approval.

The San Jose-based Silicon Valley Taxpayers Association challenged the countywide levy, arguing that it should have been put to city voters before it was enacted in 2001.

Officials had said they would likely refund the money to homeowners if they lost the case in the state Supreme Court.

“An assessment calculation that works backward by starting with an amount taxpayers are likely to pay, and then determines an annual spending budget based thereon, does not comply with the law governing assessments, either before or after Proposition 218,” Associate Justice Ming Chin wrote for the court.

Reach reporter Chris Rizo at chrisrizo@legalnewsline.com.



May 5, 2008

San Jose Mercury News

Big Day in Court for Open Space Tax

$56 Million Tied Up in Long Legal Battle

by Howard Mintz, Mercury News

[This article is also posted at the Mercury News, here.]

Over the past seven years, Santa Clara County's open space agency has collected more than $50 million from property owners as part of Silicon Valley's quest to preserve land and stem the unrelenting pressures of development.

But the money has just been sitting there, a tantalizing, untapped reservoir of funding during a time when most government agencies are tapped out.

The paralysis in the county's Open Space Authority is the direct fallout of a collision in the courts with a persistent taxpayer rights group that is convinced local residents have been charged illegal property fees.

On Tuesday, the California Supreme Court has a chance to finally settle the six-year legal feud. Tens of millions of dollars in local open space funding hang in the balance. So, too, does the ability of local agencies statewide to collect money for parks, trails, pest control, street improvements and other services funded through property assessments.

The Supreme Court will hear arguments in a challenge to the county's Open Space Authority, which created a special assessment on property owners in 2001 to pay for open space from Milpitas to Morgan Hill. The Silicon Valley Taxpayers Association sued to block the fee hike, arguing that it violates a 1996 ballot initiative designed to limit ways the government can raise revenue.

Two lower courts have rejected the lawsuit, but the state's highest court agreed to review the case, which offers an unprecedented test of Proposition 218, the so-called "Right to Vote on Taxes Act" approved by voters 12 years ago.

For Santa Clara County, the legal battle has tied up $56 million raised during the past seven years to preserve open space. If the Open Space Authority loses, that money most likely will be refunded to property owners instead of being used to carry out a long-stalled plan to use it to stave off development across the valley by acquiring parks, trails, ranches and other land.

The Sierra Club and other environmental groups have sided with the Open Space Authority in the Supreme Court.

"It does make it difficult for us," said Patrick Congdon, the authority's general manager. "Without the additional money, it puts us in a very difficult position in acquiring land in the future."

The taxpayer groups argue that local agencies should be barred from hitting property owners with additional fees, particularly when they can't outline specifically what the money will be used for. They are backed in the case by several groups, including rental property owners and the conservative Pacific Legal Foundation, based in Sacramento.

"The principle we're fighting for is that this special assessment is actually an illegal tax," said Doug McNea, president of the valley taxpayer group. "They are creating a never-ending slush fund."

The legal dispute centers on a fee increase that was charged to homeowners in addition to their property tax to preserve more land. The fee, imposed on more than 300,000 property owners, increased from $12 per home to $32 per home each year. The Open Space Authority argues that it complied with Proposition 218 because the property owners voted in favor of the special assessment after a series of public hearings.

But the valley taxpayer group maintains that the assessment is essentially a tax and should have been approved by all county voters, not just the minority of property owners who turned in their special ballots to the Open Space Authority.

A San Jose-based state appeals court in 2005 sided with the Open Space Authority, saying the agency complied with Proposition 218. Justice Patricia Bamattre-Manoukian dissented, essentially inviting the Supreme Court to hear the case because the assessment "runs directly counter to the intent of voters in passing Proposition 218."

The valley taxpayer association lost a similar challenge to the open space district's first assessment in the mid-1990s, but that case took six years to resolve. Cities and counties across California have weighed in on Santa Clara County's side, urging the Supreme Court to uphold the assessments because they need similar methods to raise money for services.

The bottom line?

"How far does this case go in terms of changing the way local governments do business," said Kathleen Larocque, a Sonoma County lawyer who wrote a brief for the California Association of Counties and League of California Cities.

The justices will have 90 days to rule.

Contact Howard Mintz at hmintz@mercurynews.com or (408) 286-0236.




Nov. 23, 2007

San Jose / Silicon Valley Business Journal

Guest Comment

Subprime Bailout Proposals are Unfair to the Taxpayers

by Elizabeth C. Brierly and Jon Coupal

Recent subprime bailout proposals are pushing the limits in risky or "creative" financing schemes. These bailouts would rescue disreputable mortgage and banking firms at the expense of responsible taxpayers.

"Creative financing" is a term used within the real estate industry to describe nontraditional ways of financing using other people's money. Such practices enable potential buyers to get into the market who might not normally be able to do so because of a low family income or their past credit troubles. A borrower can become a homeowner by agreeing to a loan with a higher cost or stricter terms than would be required from someone with a good credit history.

While helping people to become homeowners is a worthy endeavor, and certainly those who do so in good faith are entitled to a return on their investment, there are, unfortunately, some bad actors in the mortgage lending industry. These bottom feeders have approached those least able to afford monthly payments with what former Federal Reserve Board Chairman Alan Greenspan would likely describe as "irrational exuberance." In search of immediate gain, these lenders have shown a reckless disregard for the inability of their clients to meet the long-term financial obligation that comes with a mortgage. Now that the inevitable collapse of the subprime market has begun, they are pushing new creative financing schemes. These would put the burden of repayment of defaulted loans on the backs of taxpayers.

Instead of holding these lenders accountable for their own risky investment decisions, these proposed bailouts would reward them for making bad -- some would argue "predatory" -- loans, and leave taxpayers holding the bag. Déjà vu? The Savings and Loan bailout of the 1980s cost taxpayers $124 billion!

Money for government-funded bailouts must come from somewhere. This means tax increases or a reduction in services for the rest of us: those of us who pay our bills and mortgages on time, those of us who make decisions responsibly. Not only do these proposals encourage reckless behavior by lenders, they remove the incentive for borrowers on the verge of delinquency to live up to the promises they made when signing their mortgage contracts. And make no mistake: things could get worse before they get better. Nearly two million homeowners have mortgages whose rates will adjust upward by the end of 2008. The Federal Housing Authority estimates that 500,000 homes or could go into foreclosure. If the subprime lenders have their way, these will become the responsibility of taxpayers.

Still, the outlook for the long haul is brighter. According to the Mortgage Bankers Association, only 5 percent of all U.S. homeowners have subprime, adjustable-rate mortgages, and 85% of those loans are being paid on time. Most responsible financial institutions have already taken action to implement stricter lending policies to guard against a repetition of the current debacle and to restructure loans to assist those at risk of losing their homes.

There are many lessons to be learned from this subprime crisis, but the most important question that must be asked is, "should taxpayers be compelled to make good on the bad decisions made by lenders and borrowers over whom they have no control?"

Elizabeth C. Brierly is former president of the Silicon Valley Taxpayers' Association. Jon Coupal is President of the Howard Jarvis Taxpayer's Association. <!--[endif]-->




June 21, 2007

Taxpayers opposing Senate Immigration Reform Bill

Alliance of Contra Costa Taxpayers
Organization for Justice & Equality
Silicon Valley Taxpayers’ Association
Solano County Taxpayers’ Association
Stop Today’s Oppressive Politicians
Waste Watchers, Inc.

The forgotten people in the current debate on immigration reform are the taxpayers, those folks who pay the bill for our failed policy and enforcement.

California’s more than 3 million illegals cost us $10.5 billion annually for education, healthcare and incarceration.  To put that in more understandable terms, that’s $1,183 per legal household in exchange for this “cheap labor.”
 
Nationally, the 12-15 million illegals cost the public a tax burden of net $22,449 each year per household.  This equates to $1.1 million over their lifetime.  Using the lower figure of 12 million illegals, the total tax burden translates to $2.2 trillion.

The Senate’s push for amnesty ignores these economics, but encourages these types of illegal activities.  Making them all legal does nothing to stop the drain of money from the taxpayers.  It could even make the subsidizing of these people cost us more by making additional benefits, for which they are not paying, accessible to them.

Most of the illegals are uneducated and unskilled.  The Senate bill, while granting these people amnesty, would make it much harder for businesses which require skilled and educated workers.  The bill takes the hiring decision from the employer and puts it into the hands of the government.  A new point system eliminates the sponsorship by a company of the skilled people who contribute positively to the economy.

There is nothing positive to say about the Senate’s effort to foist this flawed legislation on the legal residents.  It doesn’t stop the drain of public funds to subsidize the illegals.  It doesn’t close our leaky borders.  And it doesn’t deal with the fact that these people are breaking the law.

Everything about Congressional efforts in the arena of “immigration reform” is faulty.  As taxpayers and citizens, we need to urge our federal politicians to dump this defective bill and go back to the drawing board and draft something that closes all the loopholes and is representative of what the people want.







June 18, 2007

From the readers of the Mercury News
Open space tax must be stopped

When will the Mercury News (Page 1B, June 15) stop supporting the Open Space Authority's propaganda campaign to justify an illegal tax? How much benefit will taxpayers receive from the purchase of land east of Gilroy not usable or maintainable without future never-ending tax increases? The citizens of Gilroy understood this when they opted out of the Open Space District, and thus do not pay the illegal tax. I share the frustration of Patrick Gongdon, the open space authority's general manager, with the time it is taking to get a final ruling from the state Supreme Court. An illegal tax is government theft. The court needs to put a stop to it as soon as possible.

Doug McNea, Silicon Valley Taxpayers' Association
San Jose


[This letter is also posted here: http://www.mercurynews.com/opinion/ci_6167786]






June 15, 2007

Natural beauty preserved for all on land near Gilroy

PRESERVE WON'T BE OPEN TO PUBLIC FOR SEVERAL YEARS


By Paul Rogers

Mercury News

[Excerpts]

A 702-acre cattle ranch with rolling grasslands, oak forests and panoramic views of Santa Clara County's richest farm country has become Silicon Valley's newest protected open space preserve.

The Santa Clara County Open Space Authority, a government agency based in San Jose, paid $7million to longtime Gilroy car dealer Harry Marx for the ranch, made up of two adjacent properties, known as Doan Ranch and Nielsen Ranch.

The land is five miles east of Gilroy, just off Cañada Road and Highway 152, about a half-mile south of Henry W. Coe State Park.

"A lot of people driving around Silicon Valley want the sense that the natural beauty of the area is protected," said Patrick Congdon, the open space authority's general manager. "When we preserve hillside properties like this, we preserve our relationship with the natural world and the valley's historic past."

Congdon said it will be several years before the property is open to the public.

...

Voters in 2001 narrowly approved a measure to triple the agency's budget to $12 million a year by raising the annual assessment from $12 to $32. Although that money has been collected for the past five years and now totals $41 million, it cannot be spent. The reason: The Silicon Valley Taxpayers Association sued to overturn the vote, saying it violates a state law requiring two-thirds approval on assessments that have a general, rather than geographically specific, benefit.

The taxpayers' group lost a lawsuit in 1998 that challenged the authority's original funding source. It has lost the most recent case both in district court and on appeal, and has taken its claims to the state Supreme Court.

"Our legal counsel tells us the final ruling could be one year, two years, even five years from now," Congdon said. "Nobody knows. It's very frustrating."

...

See the full article here: http://www.mercurynews.com/localnewsheadlines/ci_6147119?nclick_check=1



May 19, 2007 Excerpts from a Prop. 218 article which appeared in The Rock of the Coast (San Luis Obispo) on May 19, 2007.

Cracking the County's 218 Code

by Ed Ochs

The County has made the upcoming Proposition 218 vote so confusing, Los Osos residents may not know what project they are going to be assessed for, at their great peril.

   The County’s proposed Proposition 218 vote, scheduled for launch this fall, is in serious trouble. The signs are everywhere.   

   To figure out exactly what the County’s version of Prop 218 is all about, and what homeowners are voting for, Los Osos residents need clear, solid information. So far they have not received a thimble of intelligible information that does not require a translator paid by the County.   

   Many Los Osos residents who speak at Board Supervisors meetings have vowed to vote or campaign against the 218, unless it is for an afforable and sustainable project. Even those who support it conceptually are confused about the details, and are worried about the County undermining its own vote. 

Confused residents, especially those who do not get cable-access-only Channel 20 or 21, 30% to 40% of Los Osos, and have no or low access to the Internet, may not have a clue what they are voting on and just might throw out the ballot with the junk mail when it comes in September. It’s hard to imagine how any explanation on the mail-in ballot itself could achieve anything other than confuse people further.

...

Special Benefit Debate
    The Proposition 218 vote must determine special benefits, and while the County is still working those calculations, at the same time a final ruling on a revised definition of benefit is currently being briefed in the Supreme Court of California.
    “The issue with benefit right now as it relates to assessments is under great debate,” said Eileen Didio, paralegal to the Director of Legal Affairs, Timothy Bittle, for the Howard Jarvis Taxpayers Association. “The Supreme Court of California right now is hearing a case called the Silicon Valley Taxpayers Association versus Santa Clara Open Space Authority, and it deals with the issue of benefit and what the true legal analysis should be of benefit, of who should have it, because anyone can benefit from anything. They are trying to establish that.
   “So I can’t give you a legal analysis (that addresses benefits) as it compares to Prop 218 because that case has yet to be decided.
    “They’re still allowed to do (assessments),” Didio said, “but as far as us bringing suit or even talking with (the County) about their methodology of how benefit is being applied, there is no solid base we can go off of. Once that Supreme Court decision is heard, once they release it, then we’ll have an idea as far as what that interpretation is on 218, and could take steps if it’s in a positive light, as far as (Los Osos’) situation.”
    Didio expects to finally hear the court’s opinion in September, just as the 218 is about to be undertaken. If a court decision is finalized in September, and if applicable to Los Osos, the timing of its release may very well come too late to help reshape the vote, although the court’s decision could possibly bring a lawsuit in its wake.
    Didio said the HJTA will review the engineer’s report and the ballot “to take a look at it and make sure it is legal as far as following all the provisions of the Constitution. That’s the best as far as we can do right now.

...

See the full article here: http://rockofthecoast.com/index.php?option=com_content&task=view&id=51&Itemid=36





2006

Property Owners Singled Out To Pay Illegal Tax Disguised As "Special Benefit" Assessment"

Silicon Valley Taxpayers Association v. Santa Clara County Open Space Authority

Pacific Legal Foundation

Contact: Harold E. Johnson

Click here for story.












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