LA Watchdog Voter’s Guide: Separating Fact from Fiction

Of the fifteen ballot measures, seven involve fiscal issues, the focus of this column.  

There are five State propositions, three of which authorize $14.4 billion of new bonds to finance affordable housing (Proposition 1 - $4 billion)), water projects (Proposition 3 - $8.9 billion), and children’s hospitals (Proposition 4 - $1.5 billion).  

The fourth, Proposition 2, allocates existing tax revenue from the 2004 Millionaire’s Tax (Proposition 63, the Mental Health Services Act) to fund $2 billion of bonds to finance permanent supportive housing for homeless individuals with mental illness. 

The fifth, Proposition 6, is calling for the repeal of the State’s $5.2 billion gas and vehicle tax that was enacted in April 2007 by Sacramento after considerable log rolling.  

The County’s Measure W calls for a $300 million a year permanent parcel tax on our homes and other property owners to finance its yet to be developed stormwater plan.  This new parcel tax is also widely known as the Rain Tax (“God gave us rain and the County figured out how to tax it.”) 

The City wants the voters to approve Charter Amendment B that would allow the City to establish a municipally owned bank.  

Of these seven ballot measures, only two deserve a YES vote: Proposition 2 (Authorizes $2 billion of bonds to fund housing for individuals with mental illness) and Proposition 6 (Repeal the 2017 $5.2 billion Gas and Vehicle Tax). 

Prop 2 will not require any new taxes as it allocates an existing revenue stream to service $2 billion in bonds over the 25 to 30 years.  Furthermore, it was placed on the ballot with only one dissenting vote in the Legislature, a rare example of bipartisanship.  

As for Prop 6, the repeal of this recently enacted regressive tax is an effort to stop Sacramento from treating Californians as an ATM.  We are already the one of highest taxed states in the country.  

While everybody agrees that our roads and highways need repair, the State has ample resources to fund the repair and maintenance of its highways.  Its revenues are north of $200 billion, a record.  It does not need to dole out 50% of the proceeds to local governments.  The State could save at least $500 million by following up on the recommendations of Legislative Analyst by reforming the California Department of Transportation.  The State could also save considerable money by outsourcing the repair and maintenance to independent contractors.  

Props 1 and 4, housing and hospitals, total $5.5 billion.  Rather than adding to the State’s debt load of $83 billion (this does not include $39 billion of authorized bonds that have not been issued), the State should finance these initiatives over a five-year period from its record budget. The required $1.1 billion annual funding represents a miniscule 0.5% of the $200 billion budget. 

This massive debt burden does not include hundreds of billions in unfunded pension liabilities or almost $100 billion in OPEB liabilities (Other Postretirement Employment Benefits).  

Prop 3, the something for everybody $8.9 billion water bond, has been dreamed up by special interests. But it does little to solve the State’s water issues as it is not part of a comprehensive plan, but rather piecemeals money to sponsors of this ballot measure.  Besides, in June, we approved Prop 68, a $4 billion Parks, Environment, and Water Bond.  We also approved Prop 1, a $7.5 billion water bond, in 2014.  

Measure W, the Rain Tax, is a classic example of the County neglecting its infrastructure and then asking us to approve a massive tax hike so that it can throw money at the “problem” without a well thought out plan to address stormwater and urban runoff.  The County has identified a few over engineered projects which will be very expensive to operate.  The County also claims it will save billions of gallons of water, which is doubtful, but fails to mention that the cost will be over 10 to 100 times the cost of water from the Metropolitan Water District.  

There will not be independent oversight as the politically appointed commissioners will kick any controversial issue upstairs to the out of touch Board of Supervisors. 

As for the City’s Charter Amendment B that would authorize the City to establish a municipally owned bank, the Los Angeles Times editorial says it all: “Charter Amendment B is one of the most ill-conceived, half-baked ballot measures to come out of City Hall in years, and that’s saying something.” Enough said.

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Here are my recommendations on the ballot measures and selected candidates for office. 

Of all the ballot measures, I urge you to vote NO on Charter Amendment B which, if approved by the voters, would allow the City of Los Angeles to establish a municipally owned bank.  This allows the City to divert legally designated funds into the bank which has the very real potential to be a blind pool to finance unworthy borrowers and pet projects. As the Los Angeles Times editorialized, Charter Amendment B is “one of the most ill-conceived, half-baked ballot measures to come out of City Hall in years, and that’s saying something.” 

California Propositions

Los Angeles County Measures

Los Angeles City Measures

State Candidates

Vote for Steve Poizner for Insurance Commissioner, Diane Feinstein for US Senate, and Marshall Tuck for Superintendent for Public Instruction.

County Candidates

Vote for Jeffrey Prang for Assessor and Jim McDonnell for Sheriff (even though he is Boston native).

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(Jack Humphreville writes LA Watchdog for CityWatch. He is the President of the DWP Advocacy Committee and is the Budget and DWP representative for the Greater Wilshire Neighborhood Council.  He is a Neighborhood Council Budget Advocate.  He can be reached at:  [email protected].)

-cw