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Tax Kabuki in Santa Clara County

by: jsw

Wed Mar 22, 2006 at 08:02:58 AM PST


I lived and worked in Santa Clara County for years, so I have a soft spot for its politics. For the last month or so, I've been following the attempt by the Santa Clara County Board of Supervisors to levy a half-cent sales tax in order to finance new public transit . . . though that's not and can't be the official reason. The strictures of California tax law imposed by Proposition 13 and its progeny require a particularly ridiculous form of kabuki.

[More on the flip]

jsw :: Tax Kabuki in Santa Clara County

Santa Clara County's supervisors say they've made no deal to spend part of a proposed new half-cent sales tax on the planned BART extension to Silicon Valley, but the first formal message by the campaign promoting the tax places BART squarely before voters.

The ballot argument, filed last week by the Silicon Valley Leadership Group, includes ``BART, Caltrain, Light Rail and transit service for seniors and the disabled'' among the ``high-priority local needs'' worthy of being funded by the proposed county tax increase. But just how much would go to those specific projects -- or any others -- is something the supervisors who will control the money can't tell voters before the June 6 election without opening themselves to a legal challenge. The result looks likely to be a campaign of hints but no promises, carefully crafted to imply popular projects will be favored, but without committing to them.

``The conundrum for us is that this is a general tax,'' said Palo Alto Mayor Judy Kleinberg, who is trying to decide whether voters in her city should support the measure. ``So when we ask questions about what this will do for our community or even for the region . . . we can't get an answer. We're told, `We can't tell you, but trust us because in the past we've done right by you.' ''

The uncertainty about the ballot measure -- and the mixed messages voters probably will hear -- are rooted in the supervisors' decision Feb. 28 to pursue a 30-year ``general purpose tax,'' which needs only a simple majority to pass. If supervisors had specified where the money would go, the ballot measure would have become a ``special tax'' and require two-thirds approval from voters.

What's happening here is that under SB566, (October 2003), counties (and cities) can put a general revenue sales tax increase before the voters, in a sort of mini-referendum. But, a simple majority of the vote in favor is adequate to enact the tax. I'm not a huge fan of this model (that's why you elect representatives, after all), but it makes far more sense than the Proposition-mandated counterpart for special taxes, which requires a 2/3 vote to approve a sales tax which would fund a specific project or program. This requirement was imposed on SB566 by Proposition 13 (See CA Const. Article 13A, Sec. 4), Proposition 62, and again by Proposition 218.

Although the general consensus is that public transit is in need of more funding in Santa Clara County, it would be almost impossible to fund public transit specifically, thanks to the series of anti-tax propositions. So, everyone involved has to go along with a general tax, with the tacit understanding (and ultimately, the hope) that it will be used for additional transit.

I'm on record already (and will be much more often) as disliking earmarked taxes and expenditures (as is proposed, for example, in Proposition 82). I believe that we elect representatives to manage those things, and earmarking specific revenue flows breaks that process badly, removing flexibility, denying the possibility of expertise, and reducing political accountability. In this case, however, the anti-tax crusaders have created a painfully stupid situation for the county. The supervisors can't even make a political promise that they'll use the funds from the general tax a certain way. They have to say "We can't promise anything."

Proposition 13 and its stepchildren mandate wink and nod politics of the worst sort. And maybe that's what their sponsors intended. Or maybe it's the law of unintended consequences (a conservative mainstay, at least for conservatives of the Burkean sort) rearing its head yet again. Structural reform is clearly in order, on this and a host of other issues.

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