Proposition 1A is the latest aftershock in the Proposition 13 earthquake.
When Proposition 13 passed, limiting property taxes to 1% of value, and limiting increases to 2%/year, local governments were creamed – the property tax was their major revenue source for operations.
State government at the time was relatively solvent, so it diverted a substantial amount of state revenue to local school districts (the AB 8 bailout) to keep them from going bankrupt.
In the first rounds of the state fiscal crisis in the early 90’s, the state shifted more property tax revenues from local government to education, to reduce the state’s obligations. This combined with a reduction in the vehicle license fee, whose revenues were shared with local governments, to put local governments in a bind.
This is a part of the reason why Gray Davis reinstated the higher VLF, and was ultimately recalled.When Schwartzenegger was elected, his first act was to reduce the VLF – and thereby hammer weak local government revenues. The cities protested, and moved for a legislative constitutional amendment to prohibit such revenue-juggling, which makes local budgeting almost impossible.
1A is the result of that amendment, plus some negotiating, in which it was agreed that there is a one-time, $1.3 billion transfer from local government to the state.
Based on the rare consensus that it represents, and my own belief that state government has been using local government as a piggy bank, I’m supporting it.
California may be unique among states in that we have four levels of government that are material: State, County, City, and Special Districts. Each has it’s own complex revenue/taxation formulas, and each budgets independently – while relying on tax rates that may be set at and collected by another level of government.
One of the best things we could do in the long run here in California, is to create a ‘unified budget’ in which we rollup the various budgets and try over some multiyear budget cycle to make them conform to each other. That way we might have some idea of what’s really being spent, and begin to coordinate programs among the different levels.
Proposition 65 was a competing measure, whose backers have signed onto 1A, and now urge voters to vote against it as the proposition with the highest number of votes will be entered into law.
Because…? Don’t leave us in suspense!
I’m still shoveling on the ‘Future of the Democrats’ post (there’s got to be a pony in there somewhere…), and realized that I need to cover the California propositions …
“California may be unique among states in that we have four levels of government that are material: State, County, City, and Special Districts.”
Why Special Districts? Dare I suggest getting rid of the Special Districts? Why do you need an extra layer of government?
A.L. is slightly misleading in referring to state, cities, counties, special districts and whatnot as levels of gov’t. They aren’t a vertical chain of authority but overlapping and sometimes conflicting functions.
Take my county, Marin, which has 11 incorporated towns and cities; much of the rest is unincorporated and under County — which effectively functions _as_ a city in terms of providing local (and sometimes semi-urban) neighborhoods with pothole repair, permit appeals, police services etc. We also have one community-college district, two water districts (which also administer a big chunk of land), 19 school districts and God only knows how many sewage, community-services, school and fire districts. (Most of the special-use districts are in unincorporated land, but the school districts often overlap one or more cities _and_ are often not unified but cover grammar or high school but noth both). And the special districts are often the only local accountability short of County.
And all of these cities, counties, and districts can levy property taxes, albeit restrained by Prop. 13.
Reason I know all this is that I worked for a County Supervisor, and I myself ran for city council twice. Only to find out that the two big issues here — transportation (hwys and transit) and housing — have all the big decisions made in Sacramento, if not in Washington.
So, I’m inclined to support Prop 1A, if only because the State has lifted local revenues after Prop 13 passed, and has been very slow (and sometimes uneven) about returning it.
Alternative you propose, A.L., local-gov’t consolidation, has its own problems. I wouldn’t want another version of the LA and SF Unified School Districts, nor a unitary City and County like San Francisco. For a number of reasons, not the least of which are bureaucratic. I like being able to talk face-to-face with my police chief or city manager. In SF or LA that ain’t do-able.
Washington state certainly has the same.
Bob – I’m not proposing consolidating the levels of gov’t; just that there is some transparency between levels on the budget and budget process…
A.L.
A.L., you’re right, it was lindenen that seemd more in line with full consolidation. A budget consolidation is not much different though, with two possible exceptions: 1) a centralized statewide spreadsheet of local budgets, maybe on a common fiscal-year cycle, simply FYI, or 2) the current system, in which the State grabs big chunks of local property tax revenue. I guess that’s consolidated budgeting, after a fashion.
Some State money does go back in a chaotic way — e.g., Mello-Roos development or “ERAF”:http://www.californiacityfinance.com/. ERAF is interesting case study — especially those parts “on public safety”:http://www.californiacityfinance.com/SafetyWC9711.pdf. Given the ongoing threat from quake, firestorm and flood — local responders are the first responders — this needs fixing.
A.L., you’re right, it was lindenen that seemd more in line with full consolidation. A budget consolidation is not much different though, with two possible exceptions: 1) a centralized statewide spreadsheet of local budgets, maybe on a common fiscal-year cycle, simply FYI, or 2) the current system, in which the State grabs big chunks of local property tax revenue. I guess that’s consolidated budgeting, after a fashion.
Some State money does go back in a chaotic way — e.g., Mello-Roos development or “ERAF”:http://www.californiacityfinance.com/. ERAF is interesting case study — especially those parts “on public safety”:http://www.californiacityfinance.com/SafetyWC9711.pdf. Given the ongoing threat from quake, firestorm and flood — local responders are the first responders — this needs fixing.
Actually been mulling it over with an elected friend, in which the idea of a three-year ‘cycle’ of budget transfers comes up; the isea is both to have the centralized spreadsheet you mention and some key commitments back and forth so both sides can do some core budgeting with predictability.
The variability in tax income is killing us (one reason I dislike the income tax so much, and esp. the highly progressive CA income tax – we got killed on revenue when the dot-commies went broke), and that gets amplified through the system as each level pushes and pulls, making the while budget more unstable.
Long time horizons are a good thing for governments…
A.L.
So does Oregon. My impression actually is that this is more common than not, particularly in urban and suburban areas. Water districts, education districts, environmental districts, the “Metro” in Portland and environs…