by Scott Wiener and Mark Stone
SACRAMENTO (CalMatters) — In California, we make it exceptionally hard to fund critical local services, such as firefighting, public schools, and mental health services.
We cap property taxes, we require local communities and schools to go to the voters for almost any form of revenue, and local revenue measures usually require a super-majority two-thirds vote of the electorate.
As a result, many cities, counties, and school districts struggle with funding for the most basic of services, whether fire protection, libraries, public transportation, or teaching our children.
A few years ago, the Legislature passed two bills that were a well-intentioned effort to increase “transparency” in bond and parcel tax measures.
Under the measures, the 75-word ballot description for bonds and parcel taxes must include detailed information about how much people will pay over time for the bond or parcel tax.
While that sounds great in theory—who would be against more information?— the requirement is unworkable and often requires misleading or inaccurate information.
Indeed, for parcel taxes with multiple tiers, it is literally impossible to fit all of the state-mandated language in 75 words. As a result, these new rules effectively ban parcel taxes that ask wealthier landowners to pay more than less affluent residents.
The problem created by this well-intentioned new requirement is two-fold:
- First, it requires inclusion of speculative cost information about bonds. It is impossible to predict how much bond financing will cost and what the impact will be on property taxes. Only when a bond is sold—as opposed to simply authorized by the voters—do we know the interest rate and thus the cost of the bonds over time. Cities and school districts are forced to speculate about future interest rates and make potentially inaccurate estimates. That speculative information is not transparency. Rather, it misleads voters.
- Second, for parcel taxes that have multiple tiers, these new rules make it impossible to fit all of the legally required information in a 75-word question. The rules thus effectively ban progressive, tiered parcel taxes and allow only simple one-sized taxes.
What does that mean in practice?
Parcel taxes commonly exempt senior citizens or tax commercial property at a higher rate than residential or provide a different rate for agricultural land. Under the newly adopted rules, this tiering will be impossible, and parcel taxes will become much more regressive.
Local jurisdictions will be forced to propose parcel taxes where everyone pays the same, for example, a small homeowner paying the same as a gigantic corporate campus.
To address this problem, we introduced Senate Bill 268.
Instead of requiring detailed financial information in the 75-word ballot question, our bill would require that information be included in detailed form in the voter guide. Voters would receive more information, since the voter guide does not have a strict word limit.
SB 268 also would require that in the 75-word ballot question, the following language be included: “See voter guide for tax rate information.”
The ballot question thus will signal that the measure involves a tax and that the voter guide has more details about the tax.
Opponents may suggest that, instead, the ballot question should state explicitly “this will raise your taxes.” Of course, such a statement will be false for many people. For example, renters do not pay property taxes, so why would we falsely tell them that their taxes will go up? And where a parcel tax is simply being extended, no one’s tax is being raised.
SB 268 would achieve the important goal of providing voters with full financial information, but without misleading them and without forcing parcel taxes to be regressive. It deserves to be enacted into law.
Sen. Scott Wiener is a San Francisco Democrat representing Senate District 11. Assemblyman Mark Stone, is a Santa Cruz Democrat representing Assembly District 29.
This article is produced as part of WeHo Daily’s partnership with CalMatters, a nonpartisan, nonprofit journalism venture committed to explaining how California’s state Capitol works and why it matters.
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