LA WATCHDOG - Our elected elite in Sacramento and City Hall are addicted to spending our cash without regard to accountability, transparency, and the impact on ordinary citizens. All you need to do is look at the array of ballot measures that are on the November ballot.
There are three ballot measures on the state ballot that will allow the State, if approved by the voters, to issue $45 billion in bonds that will require debt service (principal and interest) of almost $4 billion a year.
- Proposition 37 will allow the State to issue $25 billion in bonds to assist middle class residents to buy a home with only a 3% down payment by providing a fixed rate second mortgage of up to 17% of the purchase price. This assumes the mortgage payments will cover any associated costs and not be a drain on the General Fund. Famous last words.
- Proposition 1 will authorize the State to issue $11.25 billion in general obligation bonds to address the affordable housing shortage. Funds will focus on high-need groups, including veterans, the homeless, students, farmworkers, and Native American tribes.
- Proposition 38 would authorize the issue of $8.4 billion in general obligation bonds to support research in the fields of immunology and immunotherapy. While there is the possibility that the State may benefits from this research, this has not been the case with previous research bonds authorized by Proposition 71 ($3 billion) in 2004 and Proposition 14 ($5.5 billion) in 2020.
- Proposition 2 allows the State to increase its rainy day fund by diverting revenues to the Reserve Fund that would otherwise be returned to the taxpayers because revenues exceed amounts determined by the Gann Limit that restricted the growth in state and local spending.
- Proposition 3 would make permanent temporary taxes on high-income residents. This initiative, sponsored by the teachers’ unions, has generated between $5-15 billion a year but would lower the marginal income tax rate from 13.3% (the highest in the country) to 10.3%.
And then we have:
- Proposition 40, the Billionaire Tax, that would impose a one-time, 5% tax on the assets of billionaires. The bulk of the funds generated by this tax would be directed towards the State’s healthcare programs.
City residents will also be asked to accept or reject a half-cent increase in the City’s sales tax to 10.75%. The proceeds that are expected to be in the range of $400 million will be directed to Los Angeles Fire Department to finance salaries and the purchase of equipment and not to any other City department. This is in addition to the 1% increase from Measure ER (healthcare) in 2026 and Measure A (homeless) that together cost County residents over $2 billion per year.
The proponents of each individual ballot measure will argue that their proposition has merit. But in the aggregate, they will make California and Los Angeles less affordable for its residents. And without provisions to provide transparency and to hold our elected elite accountable, we must reject these ballot measures.
(Jack Humphreville writes the LA Watchdog column for CityWatch, where he covers city finances, utilities, and accountability at City Hall. He is President of the DWP Advocacy Committee, serves as the Budget and DWP representative for the Greater Wilshire Neighborhood Council, and is a longtime Neighborhood Council Budget Advocate. With a sharp focus on fiscal responsibility and transparency, Jack brings an informed and independent voice to Los Angeles civic affairs. He can be reached at [email protected].)
