By Joel Fox, Sacramento Bee | When state Sens. Nancy Skinner, D-Berkeley, and Holly Mitchell, D-Los Angeles, introduce a split roll property tax to increase taxes on business property, you’ll hear arguments from advocates that the tax money is for the schools and local services such as libraries and police. In actuality, the measure is a tax to fund public employee pensions and health care costs.
Public pensions continue to eat away at state, local and school budgets. A number of cities pay more than 15 percent of their general fund budgets for pensions and retiree health care. Sacramento is over 17 percent. Los Angeles is at 20 percent, up from under just 5 percent a decade-and-a-half ago.
When cities must spend so much more than they have spent historically for employee benefits, reductions have to be made in other areas. In the East Bay city of Richmond, for example, staff positions have been cut, library spending is down, after-school programs have been reduced and still city officials worry that Richmond will follow other California cities into bankruptcy. It’s easy to understand why when pension debt and health care is projected to take 41 percent of the city’s general fund in five years.
School funding has been dramatically boosted recently, especially with tax increases on the state and local levels earmarked for schools. But school officials still say they don’t have enough money, and when you look at the pension debt you understand.
A new actuarial report tabs the California State Teachers Retirement System (CalSTRS) funded at 63.7 percent with an unfunded liability of $96.7 billion. That is an eye-popping $20 billion more than the previous year.
Read the entire op-ed . . .
Our previous post on the budget session had the wrong location. It’s being held in the Council Chamber in City Hall and will start at 6:00 pm. It will be broadcast on Channel 3 as well as recorded for future viewing online. Sorry for creating any confusion.
This is a reminder that Fullerton Mayor Bruce Whitaker will be presenting a mini “State of the City” address this Thursday evening, April 27 at the Library Conference Center. This free event is designed for those who could not attend the State of the City luncheon held on March 30th at Cal State Fullerton. It will begin at 6:30 pm. Light refreshments will be offered.
By Susan Shelley, Orange County Register | Did lawmakers break the law when they passed Senate Bill 1, the transportation tax increase?
There’s a quaint provision in the California Constitution that reads, “A person who seeks to influence the vote or action of a member of the Legislature in the member’s legislative capacity by bribery, promise of reward, intimidation, or other dishonest means, or a member of the Legislature so influenced, is guilty of a felony.”
By the time Gov. Jerry Brown finished twisting arms and greasing palms to pass a massive transportation tax hike, that antique language was on the curb like a broken grandfather clock waiting for a bulky-item pickup.
Brown and legislative leaders promised a billion dollars for specific local projects in the districts of wavering lawmakers, and one termed-out Republican senator made a deal for a law to protect people in his profession — civil engineering, not the profession you’re thinking of — from liability in construction lawsuits.
It’s not easy to prove a quid pro quo, Latin meaning “something for something.” People don’t typically leave a written record that says, “I’ll vote for this if you vote for that.”
Read the entire column . . .
By Daniel Borenstein, East Bay Times | Lodi City Manager Steve Schwabauer worries about his town’s fiscal solvency — and estimates roughly a third of California’s municipalities are in the same position because of rising pension costs.
Nancy Kerry, city manager of South Lake Tahoe, says her community will avoid bankruptcy but will have to make severe cuts in services to do so.
Schwabauer and Kerry are among a small number of top administrators now publicly talking about the financial crisis ahead. They both say the only way to stave it off begins with reducing pension benefits for existing employees.
“If we had taken this on 15 years ago and said we had a real problem, I think there might have been another way out,” Schwabauer says. “We waited too long to deal with it because nobody wanted to pay the bill.”
Kerry and Schwabauer independently contacted me recently. It’s refreshing to hear their candor. For far too long, top government administrators in California have remained silent, or offered up timid ideas, while most of them knew, or should have known, a crisis was brewing.
Read the entire column . . .
Tomorrow night (Tuesday) will be the third special council meeting devoted to studying the city’s budget. It starts at 6:00 pm.
If you can’t attend, you can’t watch it on cable this time because it’s being held in the Library Conference Center. But it’s supposed to be recorded. If it is, we’ll post the video. CORRECTION: It’s being held in the Council Chamber and it will be broadcast on Channel 3 as well as recorded for future viewing online.
To download/open the agenda item and the city budget, click here.
If you missed the first episode, you can watch it here. You can also download the PowerPoint presentation that was used by staff at that meeting by clicking here.
Likewise, if you missed the second episode you can watch it here.
By Jim Miller, Sacramento Bee | Tax deadline day is Tuesday and the following weeks and months again will make clear that, when it comes income taxes, certain parts of California generate an outsized amount of revenue.
Taxpayers in Los Angeles, Santa Clara, Orange, San Diego and San Francisco counties had the highest total federal tax liability – the amount of taxes owed – in 2014, the most recent data available, according to Internal Revenue Service statistics. In terms of average liability per return, seven Northern California counties – Marin, San Mateo, San Francisco, Santa Clara, Contra Costa, Napa and Alameda – lead the state.
Palo Alto’s 94301 ZIP code, meanwhile, had the highest state adjusted gross income in the 2015 tax year – more than $10 billion – and total state tax liability of almost $1.2 billion, according to Franchise Tax Board statistics. In the Sacramento region, Folsom’s 95630 had the highest adjusted gross income, $3.1 billion, and total state tax liability of almost $158 million.
Read the entire article and see some amazing interactive maps and charts . . .
To read or download tomorrow night’s detailed council meeting agenda, click here (pdf).
The public participation portion of the meeting begins at 6:30 with presentations and awards. Actual city business normally doesn’t start until 7:00 or thereafter.
By Jon Coupal | If Gov. Brown and members of the California Legislature think that the backlash against the car and gas tax increases will subside any time soon, they are mistaken. The controversy continues to dominate both traditional and social media and, in fact, the more that taxpayers learn about these transportation tax hikes the angrier they get.
Our political elites are learning that taxes on cars and gasoline remain very unpopular because they fall disproportionately on the working Californians — which is where the majority of voters reside. And the resentment might only grow when the taxes actually kick. Just wait until the bills from the DMV start showing up in the mail starting in January of next year and the gas tax increase starts even earlier in November of this year.
There are times when Californians are simply resigned to pay higher taxes imposed by Sacramento, but this might not be one of those times. Many are calling for a referendum of the tax hikes only to be disappointed with the news that, under the California Constitution, a tax increase can’t be repealed via a referendum. Nonetheless, it is possible that the tax package can be rolled back via an initiative and some groups are pondering that course of action. Other interests want more immediate action and are openly discussing recall efforts against some legislators who supported the tax package.
Read the entire column . . .