By Jack Humphreville, May 19, 2015
LA WATCHDOG-The Los Angeles County Metropolitan Transportation Authority, otherwise known as Metro, will most likely place on the November 2016 ballot a measure that would permanently increase our sales tax by a half cent to 9½%, one of the highest rates in the country.
If this measure is approved by at least two-thirds of the voters, these new revenues, along with almost $3 billion in existing sales tax revenues, including those from Measure R that was approved in 2008, would help Metro fund over $100 billion in transportation related projects.
According to a recent poll conducted for Metro, more than two thirds of the voters supported this new tax, especially when local projects such as earthquake retrofitting of our bridges, tunnels and overpasses, relief from traffic congestion on our freeways, and the repair of our streets and potholes were included in the mix of projects.
But the priorities of the voters seem to differ from those of Metro as significant investments are being made in major mass transit projects such as the Gold Line Foothill Extension, the Expo Line Extension to Santa Monica, and the Westside Subway.
While the polling questions offered something for everybody depending on where you lived (in one of the seven planning areas) and without any consideration for the cost of individual projects, the poll failed to disclose that 25% of the new revenue would be returned to the local governments. This represents a 67% increase from the 15% Local Return under Measure R, the price extracted by the City from Metro in return for its support.
But how will the City allocate the $70 million that it is expected to receive if this new tax is approved by more than two-thirds of the voters.
Under the Local Return program for Measure R, there does not appear to be any plan to allocate the $42 million that the City expects to receive next year. Rather, over 30% is kicked back to City to reimburse the General Fund for its costs while 50% is sent to Street Services to help fund its $172 million budget.
But the question remains: Does the City deserve a tax increase if it has not agreed to Live Within Its Means, where it is required to develop and adhere to a five year financial plan, to pass two year balanced budgets based on Generally Accepted Accounting Principles, and over the next twenty years, to fully fund its pension plans and to fix our streets, sidewalks, and the rest of our deteriorating infrastructure.
The Metro poll was also taken in a vacuum without any consideration for other ballot measures that will lighten our wallets.
In Sacramento, Senator Bob Hertzberg from Van Nuys wants to reform our boom and bust tax system, a noble goal, but only if the State can increase its revenue by $10 billion. Otherwise, “it’s not worth the effort.”
There is also talk to amend Proposition 13 by asking voters to establish a “split roll,” where commercial properties would be assessed at market value, not the purchase price. This would eventually cost these owners an estimated $6 to $9 billion a year.
There have also been newspaper reports about increasing the tax on gasoline to help fund the repair of our freeways, a property transfer tax to subsidize low income housing, a big time increase in the cigarette tax, and an oil extraction tax.
At the same time, the State is awash in cash as the tax revenues are exceeding expectations by many billions and cap and trade fees are expected to exceed $2 billion.
There is also a grassroots effort to authorize $9 billion in bonds that would be used by the State to provide matching funds to local school districts to upgrade their facilities.
There is also the possibility that the Los Angeles Unified School District might want some space on the ballot for either a bond offering or a parcel tax.
Finally, our City, despite a 6% increase in tax revenues, may also join the parade by asking us to approve a $4 to $5 billion tax hike to fund the repair of our neglected streets and sidewalks.
There is also the possibility that the City may attempt to increase our real estate taxes to help fund the $8 billion Stormwater Master Plan that was previously under the control of the County’s Flood Control District.
We are also going to be hit up for over $1 billion by our Department of Water and Power which will result in a $150 to $200 million tax windfall for the City.
Before we even consider approving these taxes that will impose a $2.5 to $3 billion burden on hard working Angelenos, we must demand that each level of government Live Within Its Means, especially during these robust times when we should be building our reserves to weather the next downturn in the economy.
Finally, even though we are one of the highest taxed states in the country, Sacramento, City Hall, and Metro need to realize that we are not their ATM.