Los Angeles City Measure S: Reduction of Tax Rate and Modernization of Communications Users Tax
Illustration by Mr. Fish
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Proponents suggest a 9-percent tax on usage of phones and other communication devices to replace a 10-percent phone tax that has been in place locally for more than 40 years. The current tax, which in the days of land lines was much simpler to apply, is being challenged in response to adjustments in the federal tax structure after cell-phone billing plans became more complicated and it got harder to track the point of origin of a mobile telephone call — on a land line you simply charge the billing address. Mayor Antonio Villaraigosa estimates that if the current tax is revoked, the potentially lost revenue could amount to more than $243 million per year. He argues that fiscally strapped L.A. must have the money in order to avoid cuts in public-safety services, including police. The opposition claims that the tax could be applied to Internet-access services, but proponents insist that federal law would prevent that from happening. The tax is supported by Police Chief Bill Bratton and all the major city worker unions, who face the prospect of voluntary unpaid five-day furloughs to address the city's mounting deficit.
Opponents point out that the proposed tax is far more than a reduced replacement for the current phone tax, which is widely expected to be ruled illegal by an appeals court, after a lower court found that Los Angeles City Hall has essentially been imposing the tax on residents illegally for years. The measure's sweeping language could be interpreted to apply to everything from text-messaging to Voice Over Internet Protocol — both of which could end up being taxed if voters approve the measure. Critics note that the measure also gives the city the ability to tax technologies that have not yet been invented. Because Villaraigosa has no idea exactly what will be taxed as technologies expand and change, critics say the city could easily reap billions — not millions — from unsuspecting voters. Opponents, including many community organizations and tax groups, say the tax is outrageous because it was placed on the ballot by the Los Angeles City Council, claiming a "fiscal emergency" just days after city worker unions were granted raises of more than $200 million.
Proposition 91: Transportation Funds
Proponents say the California State Legislature has made a habit of raiding the gas taxes in California that are actually earmarked and intended for upkeep and improvement of roads and other major transportation projects. Under the measure, the gas taxes could be raided only after a special proclamation by the governor, a two-thirds vote of the legislature, and an agreement to repay the money within three years. According to the nonpartisan state Legislative Analyst, the measure would increase the stability of funding for highways and roads but might decrease the stability of funding for mass transit.
Opponents point out that even the measure's authors are voting no on this one. An older measure — 1A, which was approved at the end of 2006 — already requires that any gasoline sales taxes borrowed for fiscal emergencies be paid back with interest to the transportation budget within three years. This measure would prohibit the fiscal emergency exception, forcing the state in years of budget shortfalls to make draconian cuts in vital services to meet balanced-budget requirements while transportation funds sit unspent. The measure unnecessarily ties the legislature's hands, and would increase lawmaker funding battles, since the only way to tap into the gas tax for non-road projects would be a difficult-to-achieve two-thirds approval by the legislature. Mass-transit proponents also say it could hurt the chances to use money from the gas tax for bus lines and other transportation-related non-road projects.
Proposition 92: Community Colleges
Proponents say the student fees for community college are too high, and that the state legislature does not give community colleges a fair share of state education funding. The measure would change the state Constitution, creating a powerful Board of Governors to oversee the community college system, and it would also impose a series of spending restrictions on the state legislature. The nonpartisan state Legislative Analyst says the measure would boost funding for community colleges, but the formulas are so complex that the amounts can be calculated out for only the next two years.
Opponents say the measure further ties the hands of the legislature and creates a number of complex spending formulas with unpredictable fiscal outcomes. For instance, the measure would mean an estimated loss of about $70 million a year to the California state budget due to a restriction on student fees at $15 per unit per semester, and the measure imposes complex permanent restrictions against raising student fees. Critics say one of the measure's restrictions, forcing the state to allocate more than 10 percent of current Proposition 98 school funding monies to community colleges, would dramatically hamper the legislature in decision-making.