Californians Overwhelmingly Support New Local Bonds and Taxes

Californians Overwhelmingly Support New Local Bonds and Taxes

Two weeks ago, using information supplied by the California Taxpayers Association, we called attention to “$6.2 Billion in New Borrowing on June 7th Primary Ballot.” As noted, “Next week voters will be asked to approve 46 local bond measures totaling $6.18 billion in new debt, along with 52 local tax proposals. If history is any indication, more than 80% of them will pass.”

So how did they do?

The following table shows the results so far. With bonds, the trend is clear – they nearly all still pass. That’s partly because school bonds only require a 55% majority to pass, whereas with most tax increases, passage still requires a two-thirds vote. And while the rate of passage is lower for tax increases, the latest election shows two out of three passing.

Local Tax and Bond Ballot Propositions – June 7th 2016

Status of passage as of June 14th, 2016

20160614-UW-RingCalTaxVoteChart1

The data after one week, as shown, indicates that if the “too close to call” decisions end up splitting at the same ratios as the already decided propositions, 66% of the tax proposals will pass, and a whopping 93% of the bond proposals will pass.

Why?

To answer this question, here are some comments from Jon Coupal, head of the Howard Jarvis Taxpayers Association, one of the largest and most effective taxpayer organizations in the U.S. He listed a few key reasons:

(1) The true tax impact is not evident from the ballot label.

(2) There is a lot of voter of misunderstanding about how much money we already spend on education. Very few Californians realize we spend, at a minimum, 40% of our general fund budget on education.

(3) Local taxpayers don’t have nearly the resources or the sophistication to run big campaigns against the teachers unions and the construction industry.

(4) Many times, these proposals are placed on the ballot in a way to ensure there is no opposition argument – for example, they are added when there are only 72 hours left to get an opposing argument submitted. Procedural rules are manipulated to suppress opposition.

When asked how this could change, Coupal did not seem optimistic, but had a few suggestions. He noted that his organization and other reform groups are supporting bills to require greater transparency on taxes and bonds. In particular, he stressed the need for more public disclosure of the financial impact. Coupal also mentioned the need for more public education, stating that “voters don’t understand that when people say it’s for the kids, it’s actually for the unions.

With what data is available, it’s interesting to review some of the tax proposals that did not pass. The following table shows the proposed tax increases that voters turned down on June 7th:

Failed Local Propositions to Increase Taxes – June 7th 2016

20160614-UW-RingFailedTaxes

Without dissecting the specific campaign dynamics, voter demographics, and other particular conditions in each case, there isn’t a clear indication why some local tax proposals failed, while two-thirds of them passed. One of the most expensive of all proposed parcel taxes, failed Measure C-16 in San Luis Obispo County’s Cayucos Fire Protection District, would have increased the annual assessment per house for fire protection services from $100 to $500. On the other hand, thrifty voters in Siskiyou County rejected a parcel tax that would have only cost each household $5 per year.

Similarly, when it comes to failed proposals to increase sales taxes, there is no common theme in the data. The failed proposals ranged from an increase of an eighth of one percent to a full percent, which mirrored the range of the measures that passed. The explanations from proponents were various, including public safety, general services, road and transit upgrades, and library services. Interestingly, two of the failed tax increases, in Napa and Solano counties, only required a majority vote.

Ultimately, despite California’s sporadically rebellious populace when it comes to new state taxes – Propositions 1A through 1E on the state ballot in 2009 were all rejected by voters – their track record on local taxes and bonds remains consistently pro-tax. Voters need to realize that local tax increases do not begin to cover already scheduled increases to pension fund contributions, to fund pension benefits that are – even for non public safety – two to three times more generous than Social Security. Voters need to realize that school bond measures are usually to fund work that used to be paid for out of operating budgets, before the pension and compensation commitments got out of control.

And behind these hidden agendas impelling new tax increases, behind every broken budget and faltering service, voters need to understand that government unions are the cause.

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Ed Ring is the president of the California Policy Center.

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