God Gave Us Rain and You Figured Out How to Tax It

On Tuesday, March 5, the residents of Los Angeles went to the polls to vote on Proposition A, the PERMANENT half cent increase that will raise our sales tax to a whopping 9½%, one of the highest rates in the nation.

This ballot measure, rushed to the ballot in less than two weeks without any public hearings, is expected to raise over $200 million a year to fund only a portion of the budget busting $750 million increase in salaries, benefits, and pension contributions over the next four years. This is in addition to the $1.4 billion increase during the first seven years of the Villaraigosa era of profligacy.

But this ill-conceived sales tax increase is chump change compared to the $1.5 to $2 billion that will be needed each year on average over the next 30 years to fund the $30 to $40 billion (excluding interest expense) required to finance the Los Angeles County Flood Control District’s yet to be defined plan to curb pollution associated with storm water and urban runoff.

Of this amount, property owners in the City of Los Angeles will be clobbered with a tax increase of about $500 to $750 million, representing an increase in our property taxes of 12% to 18%.

At this point in time, the Flood Control District is proposing a $300 million “Clean Water, Clean Beaches Measure.”  But this low ball, bait and switch deal that involves a complicated parcel tax and a confusing vote by mail approval process was not well received as nearly 200 speakers overwhelmingly expressed opposition during the January 15 Public Hearing.

As a result the outrage, the Supervisors extended Protest Process to March 12 (56 days) and requested the Director of Public Works to revise the draft ordinance, to make recommendations as to whether or not to set a date for an election, and to report back on placing this initiative on the General Election Ballot, a possible sunset provision for this initiative, a specific list of projects, and alternative sources of funding.

Unfortunately, the Supervisors did not request more information on the total cost of the storm water project over the next twenty years.  The ticket is estimated to be $30 to $40 billion, not including interest expense.

Nor did the Supervisors request detailed financial projections which would outline the financing, operating and maintenance costs of this new gigantic bureaucracy that would be created.

Nor did the Supervisors address the governance of the Flood Control District, relying on a politically appointed Oversight Board to hold public hearings and to make findings and recommendations to the Board of Supervisors regarding the Water Quality Improvement Plan.

Nor did the Supervisors address the need for audited financial statements based on Generally Accepted Accounting Principles.

Nor did the Supervisors address the appointment of independent third party to review and analyze the operations, finances, and management of the Flood Control District, similar to the Ratepayers Advocate for the Los Angeles Department of Water and Power that was approved by 78% of the voters in the City of Los Angeles.

Nor did the Supervisors address the ability of the municipalities to skim money off the top to pay for expenses that are normally the responsibility of their General Fund, as was the case with Measure R, the half cent increase in the sales tax to fund large scale transportation projects.

Nor did the Supervisors address to excessive administrative costs of the Watershed Advisory Groups and the Municipalities despite the recommendation of the Los Angeles County Business Federation to reduce such fees to 5% of expenditures from the current level of 10%.

Finally, the citizens of the City of Los Angeles want to know if they are getting taken to the cleaners by the County as a result of the City Council’s dumping of its $8 billion Storm water / Urban Runoff Master Plan onto the County because it knew that City voters would not approve the quadrupling of the Stormwater Pollution Abatement Charge.

Under the proposed measure, parcel owners in the City of Los Angeles will foot 31% of the parcel fee. Yet, the City comprises less that 12% of the County’s land mass and 18% of the area impacted by the proposed parcel tax, but 36% of the parcels, 39% of the population, and 40% of the assessed value.

While the Clean Water and Clean Beaches are apple pie and motherhood, the County is pushing water uphill because property owners are “drowning in fees, not storm water” as the sales tax has been increased twice in the last four years (Measure R and Proposition O), and again, heaven forbid, on Tuesday if Proposition O passes.

The County is being too cute in trying to fund its Storm Water Program through a bait and switch, low ball plan and an unfamiliar voting process that is very confusing to parcel owners.

Rather, the County needs to be open and transparent in its deliberations.

The County needs to develop a full and complete financial plan, define the projects in detail, prevent the skimming of funds by local governments, consider funding alternatives including the County’s General Fund, and obtain the approval of the property owners or the voters in a more open and transparent manner.

As a result of the County’s shenanigans, it is no wonder that overflow crowd at the January 15 hearing roared with approval at Santa Clarita Council Member TimBen Boydston’s comment: “God gave us rain and you figured out how to tax it.”

Jack Humphreville writes LA Watchdog for CityWatch. He is the President of the DWP Advocacy Committee,  the Ratepayer Advocate for the Greater Wilshire Neighborhood Council, and a Neighborhood Council Budget Advocate. This article originally appeared in CityWatch and is republished here with permission from the author.