Archive for the ‘Taxes’ Category

Vote “No” on the Measure X “county services” sales tax increase

Thursday, October 22nd, 2020

by Sue Pricco and Michael Arata

Measure X, a 20-year, half-percent Contra Costa County sales tax increase, is on the November 3rd ballot. The “current pandemic” is among rationales advanced by the measure’s supporters.

In reality, however, Measure X got its start in May, 2019 – long before COVID-19 was even on the horizon – when five representatives of county employee organizations demanded that county supervisors drop a plan for a new transportation tax and sponsor a new “county services” tax instead.
The transportation-tax measure went ahead anyway, eventually as Measure J on March 3rd’s Primary ballot.  Itself pushing a half-percent sales-tax increase, Measure J failed.  Measure X deserves the same fate now.

For starters, Measure X is regressive, disproportionately affecting those least able to afford increased costs, particularly during a time of pandemic-driven financial hardship.  Thousands of small businesses have closed.  Millions of Californians are unemployed.   Those still working often see smaller paychecks.

Meanwhile, all must still pay (now or on a deferred basis) federal and state income taxes, payroll taxes, property taxes, auto-registration taxes, gasoline taxes, phone taxes, etc. ad nauseam.  With whatever money remains, individuals and families must still provide for necessities.

Except for food purchases, essential product needs — from paper towels to kids’ shoes, sometimes to replacement automobiles — have sales taxes added.

Oh, wait on the food exception.  If resources permit a sit-down restaurant dinner or a hot takeout meal, those foods ARE taxed.

Contra Costa sales-tax rates already range from 8.25% to 9.75%, tied for 7th highest among California’s 58 counties.  And another round of sales-tax leapfrog is not a game which County residents likely hope to “win.

The Measure X ballot question (the summary voters see on ballots) advertises various specific purposes, implying falsely that some are new obligations.

But hiding in the underlying County ordinance’s fine print is the fact that Measure X is actually a general tax, “solely for general governmental purposes and not for specific purposes.

In economic terms, Measure X dollars are fungible; they can be moved around.  So, for example, Measure X’s new millions could fund County-employee salary, current benefit, and large pension payments directly.

But behind a covering smokescreen of seeming legitimacy, the measure could alternatively finesse compensation boosts indirectly, by “freeing up” money budgeted for other purposes and then backfilling those budget categories with an injection of Measure X revenues.

It would not be the first time that a local government agency deployed such a maneuver.
As is, County employees have enjoyed a 20% salary/benefit increase over just the last three years, and a $166,673 average now in annual per-employee compensation cost — while many who’d pay the new sales tax would count themselves fortunate just to return to their own compensation levels of three years ago

What about the Measure X proponent claim of spending “oversight”?  An original ballot-question version characterized the measure as “requiring fiscal accountability.”  But a Superior Court judge removed that phrase after finding that the County’s related ordinance omitted it.  “Fiscal accountability” was apparently just an afterthought.

Finally, Measure X passage would leave at least seven Contra Costa city and town jurisdictions above the statutory 2% cap on local sales taxes.  So an underhanded legislative scheme was deployed.  State Senate Bill 1349, passed and signed at the last minute, allows the County’s sales-tax cap to increase from 2% effectively to at least 3.5% (or possibly 4%), in addition to the State’s 7.25% rate.

And this change, asserts the bill itself in Orwellian doublespeak, “does not constitute a change in, but is declaratory of, existing law.

Measure X deserves your determined “NO” vote.  For more information, visit CoCoTax.org and NOonX.info.
Sue Pricco is president of the Contra Costa Taxpayers Association.  Michael Arata is a co-founder of the Alliance of Contra Costa Taxpayers 

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Glazer’s bill allowing Contra Costa half-cent sales tax increase signed by governor

Friday, October 2nd, 2020

Votes for Measure X will now count; sales taxes in the county could go to 10.75%, highest in California; Glazer’s second tax increase measure on November ballot

State Senator Steve Glazer. From his campaign Facebook page.

By Allen Payton

On the last day possible, Gov. Gavin Newsom signed into law a variety of bills on Thursday, including SB1349 by State Senator Steve Glazer, allowing a countywide half-cent sales tax increase which is designated Measure X on the November ballot in Contra Costa. The votes on that measure will now count. Had the governor vetoed the bill the votes would not have counted. He also had the option of not signing it by the Sept. 30th deadline and the bill would have become law.

The ballot language for Measure X reads as follows: “To keep Contra Costa’s regional hospital open and staffed; fund community health centers; provide timely fire and emergency response; support crucial safety-net services; invest in early childhood services; protect vulnerable populations; and for other essential county services, shall the Contra Costa County measure levying a ½ cent sales tax, exempting food sales, providing an estimated $81,000,000 annually for 20 years that the State cannot take, with funds benefitting County residents, be adopted?”

Glazer introduced the bill in the State Senate on February 21, 2020 focusing on “State responsibility area fire prevention fees”. He changed it to, “Transactions and use taxes: County of Contra Costa” on April 8, 2020 after the March Primary election was decided and the countywide additional half-cent sales tax increase for transportation failed.

It took some maneuvering in the State Senate Governance & Finance Committee to get the bill to the floor for a full vote. The bill first failed on a 3-2-2 vote on May 21. A motion to reconsider the bill then passed 7-0 on May 28 and a final committee vote was held on June 3 with just enough to pass by a vote of 4-2-1. It then passed the full Senate on June 11 by a vote of 27-11-2 with both Glazer and State Senator Nancy Skinner, who represents all of West County, voting in favor.

In the Assembly, Member Tim Grayson carried the bill which passed 48-23-8, with the other three Assemblymembers representing Contra Costa County, Jim Frazier, Rebecca Bauer-Kahan and Buffy Wicks not voting.

The Contra Costa County Public Managers Association was coordinating the effort to get the bill passed and the City Managers were the ones who endorsed it, not the various city councils.

The state has a sales tax rate of 7.25%, decreased from 7.5% on January 1, 2017, and state law prevented counties from charging more than 9.25% prior to the bill becoming law. That includes the half-cent sales tax for BART and the additional half-cent sales tax for transportation through the Contra Costa Transportation Authority. That leaves 1% remaining by which the county can increase its sales tax.

The Board of Supervisors considered a sales tax increase that would have only applied to unincorporated areas outside the 19 city limits. But that was quietly set aside.

According to the Senate Governance & Finance Committee Bill Analysis the earlier version of the bill that passed the Senate the first time, would have allowed a possible increase in the countywide sales tax rate to 11.75% in cities that already have a 1% sales tax such as in Antioch, and as high as 12.25% in El Cerrito which has a 1.5% city sales tax. However, the governor’s office said that went too far and the final bill was scaled back.

California’s sales tax rate is high compared to other states, especially when incorporating locally imposed district taxes. Tax experts argue that sales and use taxes are regressive, meaning that the tax incidence falls more on low-income individuals than high-income individuals because those of lesser means generally spend a greater percentage of their income on taxable sales, instead of intangible products or services which are not taxed.

By removing the current Contra Costa Transportation Authority and BART taxes as counting against the cap, in the final version of SB 1349, which passed the Senate the second time and signed by Newsom, allows an additional 1% of room for the county and each of its 19 cities to impose another district of up to 1% in sales tax. If voters approve the 1/2% allowed under Measure X, when it states that existing taxes do not count against the cap, the combined rate would increase to 8.75% countywide, plus any current city rates. The bill also grants Contra Costa County an additional authorization for another 1/2% sales tax increase, such as for the Contra Costa Transportation Authority, thereby boosting the maximum countywide rate to 9.25%, plus any current city rates.

That could result in a rate as high as 10.75% in the City of El Cerrito, where an additional 1.5% rate currently applies, and a 10.25% rate in the City of Antioch where they have a current 1% sales tax.

Glazer had the support of his bill from the California Labor Federation, California Professional Firefighters, California Teamsters Public Affairs Council, Contra Costa County Board of Supervisors, Contra Costa Transportation Authority, International Federation of Professional and Technical Engineers Local 21, Office and Professional Employees International Union Local 29, and SEIU California.

Those opposed to SB1349 were the Alliance of Contra Costa Taxpayers, California Taxpayers Association, Contra Costa County Taxpayers Association, Howard Jarvis Taxpayers Association and the Transportation Solutions Defense and Education Fund.

In spite of campaigning as a fiscal conservative, touting a hold the line approach to new taxes, this is Glazer’s second measure on the November ballot that will increase taxes if passed. The other is statewide Prop. 19, which will increase taxes on inherited homes or commercial property. According to Ballotpedia, “The ballot measure would eliminate the parent-to-child and grandparent-to-grandchild exemption in cases where the child or grandchild does not use the inherited property as their principal residence, such as using a property a rental house or a second home. When the inherited property is used as the recipient’s principal residence but has a market value above $1 million, an upward adjustment in assessed value would occur. The ballot measure would also apply these rules to certain farms. Beginning on February 16, 2023, the taxable value of an inherited principal residential property would be adjusted each year at a rate equal to the change in the California House Price Index.”

Following is the Legislative Counsel’s Digest and text of Glazer’s bill:

Senate Bill No. 1349

CHAPTER 369

An act to amend Section 29140 of the Public Utilities Code, and to amend Section 7291 of the Revenue and Taxation Code, relating to taxation.

[ Approved by Governor  September 30, 2020. Filed with Secretary of State  September 30, 2020. ]

LEGISLATIVE COUNSEL’S DIGEST

SB 1349, Glazer. Transactions and use taxes: County of Contra Costa.

Existing law authorizes various specified cities and counties, subject to certain limitations and approval requirements, to levy a transactions and use tax for general or specific purposes, in accordance with the procedures and requirements set forth in the Transactions and Use Tax Law. A provision of the Transactions and Use Tax Law prohibits the combined rate of all taxes that may be imposed in accordance with that law in a county from exceeding 2%.

Existing law authorizes the Contra Costa Transportation Authority to impose a transactions and use tax for the support of countywide transportation programs at a rate of no more than 0.5% that, in combination with other transactions and use taxes, exceeds the above-described combined rate limit of 2%, if certain requirements are met, including a requirement that the ordinance proposing the transactions and use tax be submitted to, and approved by, the voters. Existing law repeals this authorization on December 31, 2020, if an ordinance proposing a transactions and use tax has not been approved by that date.

Existing law, the San Francisco Bay Area Rapid Transit District Act, creates the San Francisco Bay Area Rapid Transit District, which comprises a territory that includes the County of Contra Costa, and, among other things, authorizes the board of directors of the district to impose transactions and use taxes in conformity with the Transactions and Use Tax Law for specified purposes, subject to periodic legislative review and amendment, as provided.

This bill would provide that, notwithstanding the combined rate limit under the Transactions and Use Tax Law, neither a transaction and use tax rate imposed in the County of Contra Costa by the transportation authority under the above-described authority nor a transactions and use tax rate imposed by the San Francisco Bay Area Rapid Transit District, as specified, will be considered for purposes of that combined rate limit within the County of Contra Costa. The bill would declare that the changes made with regard to taxes imposed by the Contra Costa Transportation Authority for countywide transportation programs are declaratory of existing law.

This bill would make legislative findings and declarations as to the necessity of a special statute for the County of Contra Costa.

<hr size=1 width=1209 style=’width:907.1pt’ noshade style=’color:#333333′>

BILL TEXT

THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

SECTION 1.

Section 29140 of the Public Utilities Code is amended to read:

29140.

(a) The board shall, by ordinance, impose transactions and use taxes in conformity with Part 1.6 (commencing with Section 7251) of Division 2 of the Revenue and Taxation Code for the purposes specified in Sections 29142 and 29142.2, subject to periodic legislative review and amendment.

(b) (1) Notwithstanding Section 7251.1 of the Revenue and Taxation Code, a transactions and use tax rate imposed pursuant to subdivision (a) on or before January 1, 2020, that applies within the County of Alameda shall not be considered for purposes of the combined rate limit within the County of Alameda established by that section.

(2) Notwithstanding Section 7251.1 of the Revenue and Taxation Code, a transactions and use tax rate imposed pursuant to subdivision (a) on or before the effective date of the act adding this subdivision that applies within the County of Contra Costa shall not be considered for purposes of the combined rate limit within the County of Contra Costa established by that section.

SEC. 2.

Section 7291 of the Revenue and Taxation Code is amended to read:

7291.

(a) Notwithstanding any other law, the Contra Costa Transportation Authority may impose a transactions and use tax for the support of countywide transportation programs at a rate of no more than 0.5 percent that would, in combination with all taxes imposed pursuant to Part 1.6 (commencing with Section 7251), exceed the limit established in Section 7251.1, if all of the following requirements are met:

(1) The Contra Costa Transportation Authority adopts an ordinance proposing the transactions and use tax by any applicable voting approval requirement.

(2) The ordinance proposing the transactions and use tax is submitted to the electorate and is approved by the voters voting on the ordinance pursuant to Article XIII C of the California Constitution.

(3) The transactions and use tax conforms to the Transactions and Use Tax Law, Part 1.6 (commencing with Section 7251), other than Section 7251.1.

(b) (1) Notwithstanding Section 7251.1, a transactions and use tax rate imposed pursuant to subdivision (a) shall not be considered for purposes of the combined rate limit established by Section 7251.1.

(2) This subdivision does not constitute a change in, but is declaratory of, existing law.

SEC. 3.

The Legislature finds and declares that a special statute is necessary and that a general statute cannot be made applicable within the meaning of Section 16 of Article IV of the California Constitution because of the unique fiscal pressures being experienced in the County of Contra Costa.

 

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State Senate passes Glazer bill to allow for Contra Costa half-cent sales tax increase measure on November ballot

Friday, September 4th, 2020

Awaits Gov. Newsom’s signature; will cost county $547,700 even if he vetoes bill; would raise an estimated $81 million per year.

By Allen Payton

On Monday, Aug. 31, the last day of the legislative session, the California State Senate passed SB1349 authored by Senator Steve Glazer (D-7, Orinda), to allow Contra Costa County Supervisors to place a half-cent sales tax increase on the November ballot on a vote of 29-10-1. According to the state’s Legislative Information website, the bill was presented to Governor Newsom at 6:30 p.m., that night. He has until Sept. 30 to either sign or veto the bill and if he chooses to take no action it automatically becomes law.

During a special meeting held on Friday, Aug. 21, the Contra Costa Board of Supervisors voted 4-1 to approve an urgency ordinance placing the measure on the November ballot if the State Senate passed the bill by Aug. 31 and it was signed by the governor. Board Chair Candace Andersen, who opposes asking the voters for a tax increase during the COVID-19 pandemic, was the lone no vote.

As of Friday, the governor still hadn’t signed or vetoed the bill, according to Steven Harmon, Glazer’s spokesman, who wrote, “Checking. Though, as of yesterday I don’t think he had.”

While Newsom has until the end of September to sign or veto legislation, Harmon added, “I think a premium has been made to get a quick signature,” because any delay holds up the printing of the ballots in Contra Costa County.

The measure is estimated to cost the county $547,700 to place it on the ballot, according to County Clerk-Recorder Deborah Cooper.

The supervisors were asked to consider whether to adopt Ordinance No. 2020-23, an urgency ordinance amending the effective date of the ordinance establishing a general Countywide 0.5% sales tax and acknowledge that if Senate Bill 1349 is not approved by the Legislature by August 31, 2020, Ordinance 2020-22 (as amended) will still be printed on the November 3, 2020 ballot, even though the ordinance will not be effective.

So, labeled Measure X, the ballot language is already on the County Elections Division website, just in case the governor signs the bill and if passed will not go into effect if the governor vetoes the bill.

It asks voters, “To keep Contra Costa’s regional hospital open and staffed; fund community health centers; provide timely fire and emergency response; support crucial safety-net services; invest in early childhood services; protect vulnerable populations; and for other essential county services, shall the Contra Costa County measure levying a ½ cent sales tax, exempting food sales, providing an estimated $81,000,000 annually for 20 years that the State cannot take, requiring fiscal accountability, with funds benefitting County residents, be adopted?”

Assistant Registrar of Voters for the county, Scott Konopasek, was asked what is the drop deadline date for sending the ballots to print in time to get them to the voters and avoid the additional cost. He responded, “The ballots are at the printer already. The bill becomes law without a signature as long as he doesn’t veto. In the event of a veto, we will not count or report any results.”

In California, the legislative process works just the opposite of the pocket veto for the president and federal legislation. According to Congressional Quarterly, the “Governor must veto legislation within 12 days of ‘transmittal’ or they automatically become law. However, for bills adopted during the last 12 days of a legislative session and still on the governor’s desk the day the legislature adjourns, usually Aug. 31, the governor has until Sept. 30 to veto before they automatically become law. Governor has a ‘reduction’ veto that provides the ability to reduce – but not increase – proposed appropriations in a particular line item within any spending bill. Legislators can override a veto with a 2/3rd vote of both chambers, but only the governor can call a special session to do so.”

In addition, Supervisor Andersen was asked for any new information her office might have regarding the governor’s action on the bill. She responded, “At our August 21, 2020 Special Meeting the Board of Supervisors authorized putting it on the ballot. It will be on the November ballot, but just would have no effect if the governor chooses to veto the bill. Karen agreed to support it because the elections cost were going to be lower than initially thought since we’re not including the text of the full measure, and the language of the bill was tweaked to better reflect what the governor has signed/agreed to in the past.”

As a result, Measure X will be on the November ballot in Contra Costa County. But if the governor vetoes SB1349, and the measure passes it will not go into effect, which means the sales tax in the county will not increase by a half percent.

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In spite of public opposition Supervisors approve COVID-19 violation ordinance, fines

Wednesday, July 29th, 2020

“You are not being inconvenienced that much.” – Supervisor Karen Mitchoff

  • Half-Cent Sales Tax Ballot Measure Plans Hung Up in Sacramento

  • Sheriff Continues Cooperation With ICE

By Daniel Borsuk

Over citizen objections, the Contra Costa County Board of Supervisors voted 5-0, Tuesday to approve fines for non-commercial and commercial public health violations in connection with the COVID-19 pandemic.

The new ordinance that goes into effect immediately requires citizens to wear face masks in the public and in commercial settings or one can be subject to a fine, or multiple fines.

Contra Costa County Health Services Director Anna Roth told supervisors the county needs an ordinance setting down fines because as of Tuesday the county’s COVID-19 caseload is still rising with 7,304 cases. In the county there have been 108 COVID-19 related deaths, she reported, of which 70 percent occurred in long term care facilities. County health officials have observed a sharp rise in COVID-19 cases since May. Roth pointed out the county is on the state’s COVID-19 Monitoring List.

Deputy County Health Director Randy Sawyer explained there is an “urgent need” for county supervisors to adopt an ordinance establishing fees so that county health enforcement officers can enforce public health orders especially during the current pandemic.  Citizens are not wearing masks and are not practicing social distancing, Sawyer said.

Sawyer said there are about 200 businesses that the county has ongoing public health complaint issues with the department.

Similar ordinances have recently been adopted in Marin and Napa counties, and the Contra Costa County ordinance requires persons to wear masks when engaged in noncommercial and commercial activities.  In Contra Costa, for the first noncommercial violation the fine is $100, $200 for the second violation and $500 for each additional violation within one year of the initial violation.

For commercial activity violations, the fine for the first violation is $250, $500 for a second violation, and $1,000 for each additional violation within one year of the initial violation. “If a violation continues to more than one day, each day is a separate violation,” the ordinance states.

Public Opposition to Mask Ordinance & Fines

Speakers opposing the ordinance said requiring persons to wear masks violates their Constitutional rights. “I oppose this ordinance because it violates our liberties, “said Dave Sutton. “It restricts our liberties.”

Similarly, Deborah Thompson said, “I oppose the ordinance because it is an abridgement of our liberties.”

Comments like those sparked District One Supervisor John Gioia of Richmond to say, “I am shocked by the lack of literacy and scant knowledge that people have.”

The supervisor said some people don’t understand that this virus is causing a public health crisis where this county “may soon run out of ICU beds and two thirds of the people who have died in the county lived in congregant living facilities.”

“We are out to get these numbers down,” Supervisor Karen Mitchoff of Pleasant Hill said in reference to the rising number of COVID-19 cases in the county. “A health order will do that. You are not being inconvenienced that much.”

Mitchoff, who noted Contra Costa County’s fines are less than other Bay Area county fines, said  the new ordinance will mean persons will now be required to wear a mask when they out of their house, even when they go to the fast-food drive thru. “If you don’t want to wear a mask then get used to wearing a ventilator,” the supervisor warned.

Richmond resident Edith Alderman supported the ordinance commenting,” I’m 100 percent in favor of the ordinance.  This can help get a handle on this disease.”

Speaking on behalf of the board, Chair Candace Andersen of Danville said “Many people are following the Health Order, but we need to increase our efforts together to slow the spread of COVID-19 in our community. To further our progress, to protect lives and reopen more local businesses and activities, we need a tool to send a fair message that everyone has to adhere to health orders to prevent the spread of the virus.”

“With a 14 percent unemployment rate, this is not the time for a sales tax hike” – Board Chair Candace Andersen

Half-Cent Sales Tax Ballot Measure Plans Hung Up in Sacramento

With the legislative clock ticking in Sacramento, the supervisors plan to meet at a special teleconferenced meeting next Tuesday in order to get a status report to waive the second reading on the supervisors’ resolution calling for a Nov. 3 half cent sales tax ballot proposal.

The special meeting was called because state legislators have not convened to act on proposed legislation, especially Contra Costa County State Senator Steve Glazer’s Senate Bill 1349, a transactions and use tax law, that the supervisors need the state Legislature to pass and Governor Gavin Newsom to sign by August 18 or the supervisors’ half cent sales proposal will not appear on the November ballot.

Deputy County Administrator Tim Ewell explained without passage of SB 1349, the county will  lose $800,000 to $1 million in state revenue to cover printing costs tied to the ballot measure, but the clock is ticking and the supervisors need to have SB 1349 passed in the legislature and signed by the governor by August 18.

“I want those funds,” said supervisor Mitchoff, “but it will only move forward if the legislature acts.”

Supervisors voted 4-1, with Chair Candace Andersen of Danville casting the lone opposing vote, to move forward to meet next Tuesday.

“I will not support it” said Andersen, who also opposed the tax increase proposal at the board’s July 14 meeting.  “With a 14 percent unemployment rate, this is not the time for a sales tax hike with such high unemployment rate.”

One of the few speakers opposing the proposal Tom Townsend of El Cerrito, said, “I am taxed to the limit and I oppose the half cent sales tax.”

“I am unsure if this ballot measure will pass,” warned District 3 Supervisor Mitchoff, but she voted in favor of it anyway.

Tax proponent Supervisor Gioia said a county resident would typically pay $60 to $80 a year should the tax measure pass in November.

The proposed language for the county tax measure reads:

“To keep Contra Costa’s regional hospital open and staffed; fund community health centers; provide timely fire and emergency response; support crucial safety-net services; invest in early childhood services, shall the Contra Costa County measure levying a ½ cent sales tax, exempting food sales, providing an estimated $81,000,000 annually for 20 years that the state cannot take, requiring fiscal accountability, with funds benefitting county residents, be adopted?”

Sheriff Continues Cooperation with ICE

Sheriff David Livingston ran into criticism from the public about how the Sheriff’s Office works with the United States Immigration and Customs Enforcement (ICE) but is not expected to change his policies.

“The Sheriff continues to respond to ICE notification requests,” said Melanie Kim, a staff attorney for Advance Justice – Asian Law Caucus. “These practices are especially cruel given that COVID-19 is running rampant inside ICE facilities.  People in ICE custody are vulnerable to grave illness or death.”

The sheriff told supervisors that because of the COVID-19 hygiene practices that his officers and the inmates use at the West Contra Costa facility in Richmond and Martinez jail, there have been no reported COVID-19 cases.

The sheriff reported that in the past year his office detained for ICE enforcement purposes, 72 were Hispanic prisoners, 18 were Asian prisoners, one was a Black prisoner, three were white prisoners, and two “other” prisoners.

Sheriff Livingston said of the 95 prisoners reported to ICE, 71 were charged for miscellaneous felonies, four for penal or murder, five for robbery, two for car jackings, and for 11 for assaults with deadly weapons.

While there were a number of critics of the Sheriff’s Office asking that the Board of Supervisors to reduce funding for the upcoming 2020-2021 fiscal year, Karen Clarkson was one of few backers of Sheriff Livingston’s department requesting that funding remain unchanged. “I support the Sheriff,” she said. “It is an unsafe practice to defund the Sheriff.”

“This county should be safe for everyone, whether they are documented or undocumented,” said Anisha Walker, who requested that supervisors cut funds to the Sheriff’s Office.

“I have no sympathy for those who break the law and are violent criminals, “said Supervisor Mitchoff. “I support the sheriff. And I support social justice and equality at a time we are in a COVID -19 pandemic.”

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OP-ED: Prop. 13 is working, reject Prop. 15’s $12 billion annual tax increase

Saturday, July 25th, 2020

By Jon Coupal and Ernest Dronenburg

Come November, Proposition 13 faces its biggest political battle at the ballot box. It is instructive to ask whether that iconic tax affordability measure remains good tax policy for California.

As the just-released property tax assessments rolls from several California counties reveal, Proposition 13 is working exceedingly well at keeping homeowners and small business owners from losing their properties to skyrocketing property taxes, while delivering government a reliable source of revenue. Voters would be foolish to repeal one of its major protections this November.

Take San Diego County, for example. The assessed value of all taxable property increased to a record high $604.75 billion, more than a five percent increase over last year. Because the state-set “lien date” is January 1st, any potential impact from COVID-19 won’t show up in this year’s numbers. Nonetheless, there is little to suggest that the county will see any major downturn in the real estate market, notwithstanding the pandemic.

San Diego’s experience with Proposition 13, as with most California counties, should lay to rest the notion that Proposition 13 has starved local government of revenue. Since 1978, increases in property tax revenue for local governments have far exceeded population and inflation. And while California now has the highest income tax rate, gas tax and sales tax rate in America, we remain in the top third (17th out of 50) in per capita property tax revenue. In short, we are not a low property tax state.

Hardly an outlier, San Diego County’s benefits from Prop. 13 are evident in the other counties that just reported their assessment rolls. These eleven counties all enjoyed big increases in taxable value that produced more revenue for schools and governments, including Fresno (up 5.5 percent), Marin (4.5 percent) and Orange (4.72 percent).

So how is it possible that, over the course of 41 years of history, Prop. 13 continues to work so well? Prop. 13 is an implicit contract with government that says property owners agree to pay a maximum property tax rate of 1 percent for as long as they own the property and agree to an annual increase of that taxable value up to 2 percent. When the property changes owners, it is reassessed at the market value and the new owner gets the benefit of a transparent and predictable tax they can afford. Prior to Prop. 13, every year was a guessing game as to whether you could afford your property taxes.

But now, far-left progressives and tax-hungry public sector labor interests want to strip away that protection from business and industrial properties in order to seize what they believe to be between $6 billion to $12 billion annually in taxes. Even their estimate of revenue has huge volatility.

Their Proposition 15 proposal on the November ballot would require continuous reassessment of business properties by removing the two percent cap on annual increases.

There are many reasons to reject Prop. 15. But as the 58 counties release their assessment rolls, it’s more evident than ever that Prop. 13 has delivered affordability for property owners and a stable and growing revenue source for schools and local governments. We shouldn’t abandon a system that’s working.

We should reject Proposition 15 in November. It’s obvious that it will have a negative impact on revenue stability for our schools and on stability for taxpayers. We will see businesses closing not because of the pandemic, but because they cannot afford to pay their property taxes.

Jon Coupal is the president of the Howard Jarvis Taxpayers Association and Ernest J. Dronenburg, Jr. is the elected San Diego County Assessor/Recorder/Clerk and former 20-year member of the California Board of Equalization and Chairman of its Property Tax Committee.

 

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Contra Costa Supervisors move forward half-cent sales tax increase for November ballot, extend rental eviction moratorium

Thursday, July 16th, 2020

Andersen only one to vote against tax increase measure; support Martizians for Black Lives and mural; approve Grand Jury report on wildfire preparedness; finalize recruitment process for new County Administrator

By Daniel Borsuk

Just as Contra Costa County’s top public health official Anna Roth informed the Contra Costa County Board of Supervisors  on Tuesday the number of COVID-19 positive cases has risen to 2,586 cases, an increase from 92 cases three weeks earlier, and with 79  COVID -19 stricken patients in county hospitals, up from 35 patients in county hospital six weeks previously, Supervisors reacted swiftly by extending a county-wide ordinance prohibiting rental evictions and rental increases until September 30.

Supervisors received overwhelming telephone citizen support to extend the ordinance’s benefits to renters and small businessowners two and half months during Tuesday’s teleconference meeting.  The ordinance that had protected tenants from evictions and rent increases would have expired on Wednesday, July 15.

The new ordinance won unanimous support from supervisors.

“The emergency is not over with the COVID 19 pandemic.  The economic impact our residents face has not subsided, said Board Chair Candace Andersen in a statement.  “We sincerely hope passage of this new ordinance to extend the eviction protection of rent freeze will continue to protect renters and small businesses even as landlords and renters work together to have tenants pay what they can over a longer period of time.

The ordinance contains a no-fault provision that landlords cannot increase the rent on a residential property until Sept. 30, Andersen said in her statement. It applies to all 19 cities in the county as well as all unincorporated areas.

Support Placing Half-Cent Sales Tax Increase on Ballot on Split Vote

The Supervisors, on a 4-1 vote, also flashed the green light to allow county officials to proceed in drafting a county-wide ballot measure possibly for the November election for a half-cent sales tax increase to support county services.

Supervisors reviewed findings from a poll that cost $10,000 and conducted by FM3 Research that found  among 666 persons who were polled, “To keep Contra Costa’s regional hospital open and staff; fund community health centers; provide timely fire and emergency response; support crucial safety-net services; invest in early childhood services; protect vulnerable populations; and for other essential county services, shall the Contra Costa County measure levying a half-cent sales tax, exempting food sales, providing an estimated $81,000,000 annually that the State cannot take, requiring fiscal accountability, with funds benefitting County residents, be adopted?”

The FM3 Research poll found that 62 percent of the respondents would possibly support a tax measure, 31 percent oppose, and 7 percent had no response.

Board Chair Candace Andersen, who represents District 2, cast the lone no vote against the sales tax proposal saying she had “serious concerns” about the measure.  The supervisor from Danville said “it would add further tax burdens to families now stressed by the economic impacts of the  COVID 19 pandemic restrictions.”

“A sales tax is the most regressive form of taxation for those who can least afford it. I think the timing is really, really off,” she added.

But District 1 Supervisor John Gioia of Richmond, who has constantly defended the need for a countywide sales tax to support county services, said, “The need is more apparent now that county services are underfunded and need additional tax support.”

 

The tax increase would require support of a 50% plus one simple majority of voters to pass. The Supervisors have until August 7 to place the measure on the November ballot. According to the Contra Costa County Elections website, supporters and opponents would have until August 19 to file Arguments in Favor or Against and until August 24 to file rebuttals.

Support Martizians for Black Lives & Mural

Supervisors approved, without opposition, a resolution “supporting Martizians for Black Lives in their legal public commentary through their ‘Blacks Lives Matter’ mural, and strongly condemns those who illegally deface this mural as a racist and illegal act.”  The resolution is in reference to the Black Lives Matter mural that was painted and temporarily defaced in front of the Martinez court house with black paint by a woman and assisted by a man, who said they were defacing the mural with comments such as “Racism is a lie,” “There is no racism,” “This is not happening in my town, “ “No one wants Black Lives Matter,” and “All lives matter.”

Contra Costa District Attorney Diana Becton stated, “The mural completed last weekend was a peaceful and powerful way to communicate the importance of Black lives in Contra Costa County and the country.  We must continue to elevate discussions and actually listen to one another in an effort to heal our community and country.”

Grand Jury Report on Wildfire Preparedness

A Grand Jury Report, “Wildfire Preparedness in Contra Costa County,” was approved as a consent item, but among the panel’s recommendations were:

“The Board of Directors of Contra Costa County Fire Protection District, East Contra Costa Fire Protection District, Rodeo-Hercules Fire Protection District, and San Ramon Valley Fire Protection District should consider directing their Fire Chief to update wildfire evacuation plans and incorporate pre-determined polygons and advanced routing technology, by June 30, 2021.”

The Grand Jury Report also states directors of the five county fire districts “should consider identifying funds to adopt or expand the use of new technologies, such as ground sensors, drones, satellites, and fire spotting cameras, to help detect fires in high-risk areas by June 30, 2021.”

Additionally, the report recommends that directors of the Contra Costa County Fire Protection District, East Contra Costa Fire Protection District, Moraga-Orinda Fire Protection District and Rodeo-Hercules Fire Protection District should review and consider an ordinance similar to the one the San Ramon Valley Fire Protection District passed that would enable their fire district to recover labor and equipment costs from PG&E for overseeing electrical utility work that presents a high fire risk by June 30, 2021. “

In other action, supervisors approved the sale of two parcels of county owned land at 1750 Oak Park Blvd. and 75 Santa Barbara Road, that is the site of the former Pleasant Hill Library, for $13.8 million to developer Davidon Homes. The site is part of a proposed development calling for the construction of a new City-owned library, 34 single-family homes, and open space.  No one spoke either in opposition or in favor of the sale.

Finalize Recruitment Process for New County Administrator

Supervisors also authorized recruitment consultant Peckham & McKenney, a Sacramento firm that supervisors had hired to recruit a new County Administrator to replace David Twa, who will retire at the end of this year to begin the recruitment process.  The supervisors had approved a $30,500 contract last month with Peckham & McKenney.

The successful candidate could earn an annual salary of as much as $381,000.

The recruiter has proposed a schedule that includes resume deadline of Sept. 22, preliminary interview running from Sept. 23 through Oct. 9, Recommendations of Candidates on Oct. 13, Interview – First Round the week of Oct. 26 and Second Round the week of Nov. 2.

The recruiters work is slated to be completed with the successful replacement of a new county administrator before Jan. 31, 2021, the end of the contract with Peckham & McKenney.

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Election 2020: Proposition 19 is latest assault on taxpayers

Sunday, July 12th, 2020

OPINION

By Jon Coupal, President, Howard Jarvis Taxpayers Association

The assaults on California property owners and taxpayers never stop. And once again the California Legislature has advanced a massive tax increase at the last possible moment when they thought no one was paying attention.

Assembly Constitutional Amendment No. 11 (ACA11), approved by the California Legislature, takes away Proposition 13 protections that California families have under current law and replaces them with a billion-dollar tax increase. Voters will have an opportunity to reject this scheme come November, as ACA11 will appear on the ballot as Proposition 19.

After the historic passage of Proposition 13 in 1978, Californians finally had certainty about their future property tax liability because increases in the “taxable value” of property were limited to 2 percent per year. Property would be reassessed to market value only when it changed hands. To prevent families from getting hit with huge tax increases, voters overwhelmingly passed Proposition 58 in 1986, changing the state constitution to ensure that transfers of certain property between parents and children could occur without triggering the sticker shock of reassessment.

Under Prop. 58, a home of any value and up to a million dollars of assessed value of other property may be transferred between parents and children without reassessment. Proposition 19 (2020) would repeal Proposition 58 (1986) and force the reassessment of inherited or transferred property within families. The only exception is if the property is used as the principal residence of the person to whom it was transferred, and even that exclusion is capped.

The Legislative Analyst’s Office estimates that the repeal of the “intergenerational transfer protections” guaranteed by Props. 58 and 193 will result in 40,000 to 60,000 families getting hit with higher property taxes every year. Prop. 19’s massive tax increase has been included in this initiative to offset another proposed constitutional change: the expansion of the ability for older homeowners to move to a replacement home and transfer their base-year property tax assessment from their previous home to the new property. While this “portability” expansion has some merit, voters rejected this idea in 2018. Oddly, the backers of the proposal think they can sell it again by adding a tax increase.

As ill-advised as Proposition 19 is as matter of policy, the contortions executed by the California Legislature to place it on the ballot were nothing short of bizarre. The primary sponsor of ACA11 was the California Association of Realtors (CAR) which first wrote a similar proposal as an initiative and gathered signatures to put it on the ballot. It appears CAR is motivated by the desire to churn more home sales, even at the expense of a multi-billion-dollar tax increase.

For reasons related to placating progressive Democrats in the Legislature as well as labor unions, CAR wanted to withdraw its previously qualified initiative and have the Legislature replace it with a similar tax increase proposal.

But something funny happened on the way to the ballot. CAR missed the constitutional deadline for withdrawing its initiative, so as a matter of law, it appeared that there would be two nearly identical measures on the ballot, causing confusion, not to mention additional costs. So, Secretary of State Padilla dutifully took the CAR measure off the ballot even though he had already certified it under the procedures set forth in the California Constitution.

Our current political establishment ignores all rules and laws when it comes to achieving a desired political end. And, as usual, the desired end here is billions of dollars in higher property taxes.

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Sen. Glazer touts latest legislative accomplishments, including placing $1 billion tax increase on November ballot

Thursday, July 9th, 2020

State Senator Steve Glazer. (D-7-Orinda)

SACRAMENTO – Sen. Steve Glazer’s legislative agenda – including a three-bill package to help residents survive power outages – cleared the Senate this spring and moved to the Assembly despite challenging conditions brought on by the COVID-19 pandemic.

In addition to the power outage bills, Glazer carried measures to deter unsafe house parties in short-term rentals – prompted by an Orinda tragedy in which five people were killed – and another to ban the sale of flavored tobacco products, which have been used to lure kids into the nicotine habit.

Behind the scenes, the senator also played a key role in passing a constitutional amendment (ACA 11) that could make it easier for seniors to sell their house and buy another without incurring huge increases in their property tax bills. That measure would increase taxes in the state by $1 billion per  year, raising money for fire protection by closing a loophole that has allowed out of state investors and absentee landlords to take advantage of a law meant to help people pass on their family home to their children.

The power outage package was intended to address issues with cell phone service, medical devices and hospitals during shutdowns triggered by utilities trying to avoid sparking a fire during high-wind events.

The bills were:

SB 431– (co-authored with Sen. Mike McGuire) to require a 72-hour backup power for cell towers to ensure people have access to cellphone communications during a wildfire power shutdown;

SB 801 – to require utilities to provide backup power sources to protect residents who rely on electricity to power life-saving medical devices;

SB 1099 (co-authored with Sen. Bill Dodd) – to allow hospitals to use backup power without facing local penalties.

“Senator Glazer has truly been a champion of persons with disabilities, older adults and wildfire victims and we commend his work in carrying legislation to ensure that power companies are required to provide backup power to many of them during Public Safety Power Shutoff events,” said Curtis Child, legislative director for Disability Rights California, referring to SB 1099. “This legislation will save lives.”

The Senate also approved Senator Glazer’s bill, SB 1049, increasing penalties for short-term rentals that allow disruptive and dangerous events. Last Halloween in Orinda a mass shooting left five people dead at a party hosted at an AirBnB property.

“In a few short months amidst a deadly crisis, lawmakers were asked to scale back their legislative agendas,” Senator Glazer said. “So, I am thrilled with how much important work we were able to get done, and am especially glad I could address some critical issues for residents in my district.”

The Senate also approved SB 793, which Glazer co-authored with Sen. Jerry Hill, to ban the sale of flavored tobacco products. This bill is similar to previous legislation Glazer has co-authored with Hill banning tobacco and e-cigarette companies from marketing flavored products to children.

The Senate also approved Senator Glazer’s bill, SB 1232, to help student parents pay for books and college supplies with a Cal-WORKS grant. It would also exempt these students from having to meet work requirements.

Assembly Constitutional Amendment 11, which Glazer helped push through the Senate, allow seniors and disabled people to sell their home and buy another one without having to pay the substantially higher property taxes that would typically be assessed on the new purchase. This will allow more empty-nesters to move out of larger homes that have more space than they need while freeing up homes for young families who have been squeezed out by the housing shortage. It appears on the November ballot as Proposition 19.

The constitutional amendment, if approved by voters in November, would also close a loophole that gives people a property tax break when they inherit a home from their parents. People who live in the home they inherit would still get the benefit but it would no longer be available to landlords.

According to the California Board of Equalization, “Proposition 58, effective November 6, 1986, is a constitutional amendment approved by the voters of California which excludes from reassessment transfers of real property between parents and children.

Proposition 193, effective March 27, 1996, is a constitutional amendment approved by the voters of California which excludes from reassessment transfers of real property from grandparents to grandchildren, providing that all the parents of the grandchildren who qualify as children of the grandparents are deceased as of the date of transfer.”

According to Jon Coupal, president of the Howard Jarvis Taxpayers Association in his latest California Commentary, “the Legislative Analyst’s Office estimates that the repeal of the ‘intergenerational transfer protections’ guaranteed by Props. 58 and 193 will result in 40,000 to 60,000 families getting hit with higher property taxes every year.”

The two changes could eventually raise $1 billion a year in new revenue that would be dedicated to fire protection.

“Senator Glazer’s efforts to create a dedicated fund to support underfunded fire districts in California show how effective a resourceful and persistent lawmaker can be in delivering much needed funds to his fire districts,” said Brian K. Rice President, California Professional Firefighters. “We are grateful for the support Senator Glazer has provided us and should ACA 11 (Proposition 19) be passed by the voters, we look forward to working with him to secure funds for his district.”

Glazer worked with the authors of the measure to ensure that a portion of the revenue would be available to the East Contra Costa Fire Protection District, which has been forced to reduce services and close a number of stations because state funding formulas gave it far less property tax revenue than a typical fire district.

“This fire district has never had the revenue it needs to serve the fast-growing East County,” Glazer said. “ACA 11 is a smart, fair tax reform that will help seniors while generating more resources for fighting fires. If it passes, I will work with my fellow legislators to make sure that the East County district gets its fair share.”

Allen Payton contributed to this report.

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