Kobe lives here – the NBA star, not the beef, though that’s often what’s starring for dinner. And Gwen Stefani grew up here. Orange County has the NHL Ducks and baseball’s weirdly named Los Angeles Angels of Anaheim. Television has honored this place (and mocked it) with Arrested Development, Laguna Beach: The Real Orange County, and The OC. For better and (mostly) for worse, Orange County is where Bravo TV’s Housewives franchise got its start.
When you think of this place, you’re more likely to think of Disneyland, Newport Beach’s yacht-choked harbor, surfing near Richard Nixon’s old Western White House, and shopping at South Coast Plaza – whose $1.5 billion in annual sales, Wikipedia tells us, is the highest of any mall in the United States of America.
You’re more likely to think of these iconographic entertainments, we’re saying, than you are to consider Stanton, California, population 38,000.
Stanton is Orange County’s smallest city – and among its poorest and most violent. It’s also just one of two OC cities with its own sales tax, a distinction it earned following a savage citywide vote in 2014.
But Stanton isn’t entirely unique in the state. This November, some 300 California entities will ask their voters to approve new taxes and bonds. Pressed by the lingering effects of the Great Recession, the end of redevelopment, and the rising costs of public employee pay and benefits, California governments want residents to give more generously.
Stanton residents (Stantonians?) are still on public policy’s cutting edge, however: in November, they’ll vote on a measure to repeal the 2014 sales tax. And in that campaign, the pro-tax forces are already raining down predictions that repeal will bring about the End Times.
The pro-tax effort has been led by Councilman David Shawver, a self-described “ultra-conservative football coach Republican” who is, ironically, backed by the county’s most powerful public employee unions. Wherever you live in California, your town is likely to be run by a similar propulsion system – by public employee unions that fund the campaigns of candidates who, once in office, negotiate with those same union leaders to raise the pay and benefits of the government workers who got them elected in the first place.
Stanton, in other words, is Anytown, California. If you look at Stanton as we have, we think you’ll find yourself asking tough questions about the place you live.
FIRST, A BIT OF HISTORY
In March 2011, facing a $4 million deficit, panicked Stanton city council members met in special session and voted unanimously, dramatically to declare a fiscal emergency. In that same meeting, the council moved quickly to ask voters to approve a 50-percent hike in the city utility tax, from 5 percent to 7.5 percent.
“We had to come up with some type of system or some type of program to generate more revenue to keep the city going,” Shawver, then a 23-year council veteran, told a reporter at the time.
Stanton voters would ultimately reject the tax hike. But in the meantime, there was other bad news. In June 2011, California Gov. Jerry Brown announced that he and state lawmakers had decided to kill the state’s scandal-plagued redevelopment process. “We were using that money for a lot of our city services,” Shawver told the Orange County Register.
Throughout much of that period, a Los Angeles Times reporter noted, the digital sign outside Stanton’s city hall blinked ominously: “STANTON FISCAL CRISIS.” In June 2012, just before voters killed the utility tax hike, City Manager Carol Jacobs warned residents their city was on the verge of bankruptcy.
Tallying up the toll of the financial crisis in Stanton in 2012, Times reporter Christine Mai-Duc wrote, “In the last two years, after-school programs have been cut, city staffers have been laid off and even the lone police station in town has closed to the public, a sign on the door offering residents a number to call if they need assistance. The city has even elected to stop paying dues to the League of California Cities, an organization that lobbies on behalf of local governments. It’s not required by law, says City Manager Carol Jacobs, and Stanton just can’t afford it.”
“We’ve never really had much fat in this city,” Shawver told the Times. “We’re getting to a point here where there’s not much left to cut.”
To recap: a self-declared “fiscal emergency,” the threat of a bankruptcy so catastrophic that the city had shuttered its police station, the end of redevelopment and the death of a tax hike at the polls.
SELLING THE SALES TAX
In 2014, city council members, many of them present for the unanimous declaration of financial emergency three years before, backed the 1-percent city sales tax. Their reason: Without the sales tax increase, they told voters, the city would lose vital public safety services. Of course, it wasn’t presented that way in the city’s full-color, ALL-CAPS messaging. In that campaign, opposing the city sales tax meant you supported house fires and gangsters – and what’s maybe worse, that you actually hated cops and firefighters.
Faced this second time with a tax hike or the Apocalypse, voters approved the tax.
Shawver has tried to downplay the impact of the now 1-year-old tax hike on residents – and to head off a November 2016 ballot measure to repeal the tax. In doing so, Shawver and his council colleagues have played on populist themes of rich and poor, insider and outsider.
“Just because you’re rich and wealthy doesn’t give you the right to come and repeal our votes,” Shawver thundered at last month’s pro-tax gathering. “We have the full support of everybody, and we make the decisions!”
In fact, the November 2014 campaign to promote the tax was funded primarily by outsiders – the county’s powerful firefighter and sheriffs unions, documents reviewed by California Policy Center reveal.
Sheriffs and firefighters who work in the city have much to gain from the sales tax. City officials say the tax brings in $1.5 million annually. This year, the city will pay an additional $1.1 million for public safety alone, most of that for the escalating pay and benefits of its $235,000-per-year firefighters and $186,000-per-year sheriff’s deputies.
Those are extraordinary pay packages, even in relatively affluent Orange County. And they stand out in Stanton, where the median yearly household income is $46,000 and 22 percent of the population lives below the poverty line.
The documents, which the city turned over following a California Policy Center public records request, show that the pro-tax campaign Yes on Stanton 9-1-1 received total 2014 contributions of $40,399 from three sources, two of them (maybe all three: hold, please) outsiders. The deputy sheriffs union gave $21,700, a bit more than half of all contributions. The county firefighters union gave the pro-tax campaign another $12,700. Together, the unions’ contributions accounted for 85 percent of the pro-tax campaign’s total income.
But that number jumps when you include the one local contributor to the pro-tax campaign, council member David Shawver. The firefighters gave Shawver’s campaign committee $4,043 during the same election cycle, and Shawver in turn gave the pro-tax campaign $5,999.
Taken together, one could argue the county firefighters union gave the pro-tax campaign a total of $16,743, and that Shawver’s real contribution to the pro-tax campaign (besides tactics) was just $1,955. In other words, outsiders gave the pro-tax initiative $38,443 – or 95 percent of all contributions to the pro-tax campaign.
But that’s not the message of city officials like Shawver. Without the sales tax increase, there’d be fewer cops, Shawver told the March gathering. He asserted that backers of the November measure to repeal the tax would cut public safety “50 percent.” No one questioned the number. Nor did anyone ask how much the county’s public-safety officers earn in pay and benefits.
THE BONDS THAT TIE
Even as it was issuing bankruptcy warnings and raising taxes, Stanton was spending. In 2011, just before Gov. Brown killed redevelopment in the state, city officials hurriedly issued bonds backed by land Stanton had purchased through its Redevelopment Agency.
The city says income from the sale of those bonds will fund a Central Park, and will have “no impact on the City’s General Fund.” That seems unlikely. California Policy Center bond analyst Marc Joffe found that Stanton’s bonds cost city taxpayers nearly $400,000 to issue in 2011. Interest payments – totaling $42 million over 30 years – will continue to put a multi-million-dollar ding in the city’s budgets.
Stanton’s Central Park was supposed to cost $6 million. California Policy Center estimates show the cost is now at least $24 million – the cost of property it bought with income from the 2011 bond sale ($12.5 million) plus the city’s upwardly revised $11.5 million construction estimate. Add to that interest on the bond and operating expenses and you’ve got a Central Pork.
Of course, governments often build boondoggles; Stanton’s Central Park could happen anywhere. But the city’s increasingly powerful government unions – and the campaigns for increased taxes and debt to pay police and firefighters – that is already a certainty almost everywhere.
Ed Ring and Will Swaim contributed to this report.