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.



Proposition 93: Limits on Legislators' Terms in Office

Proponents say the measure will create continuity and encourage the 120 legislators in Sacramento to better learn the issues, helping them to resist paid lobbyists who now hold most of the power in shaping law on key issues facing the government. Under current California Term Limits, legislators are automatically ousted after 14 years in the legislature, and they must split that time: They can stay for three terms in the Assembly (for a total of six years) and for two terms in the Senate (for a total of eight years). Generally, legislators wait for their six-year cap in the Assembly to expire and then run for Senate, where they stay for eight years, until they reach the 14-year limit. The measure would reduce the total cap, from 14 to 12 years, but it would allow legislators to remain for those 12 years in either the Assembly or Senate, where they could acquire the seniority that would help them stand up to lobbyists. A temporary downside to the measure is that many current legislators would get to extend their terms for one more run, but proponents feel that this is a small cost to pay for a needed reduction in lobbyist influence peddling.


Opponents say the measure is freighted with special exceptions designed to turn the law into a self-preservation act for sitting legislators. Under one, the so-called “transition” exception, 42 legislators who soon face ouster under term limits — more than one-third of the legislature — would not be ousted, and would instead be allowed to run for the same seat again. Because all 42 now facing ejection under term limits hold “safe seats” designed by the legislators themselves to assure that they were not voted out, the exception virtually guarantees that they could keep those seats for several more years. The 42 politicians who would be protected include the most powerful members of the legislature: Democratic Party leaders Fabian Nuñez, Don Perata, Sally Lieber and Gloria Romero, and Republican Party leaders Dick Ackerman, John Benoit, Doug LaMalfa and Todd Spitzer. The measure has been widely condemned by California newspapers, with 39 against it and four backing it.

Also read Max Taves' article on Prop. 93 and see a slideshow of the 42 legislators who could benefit from its passage. 


Propositions 94, 95, 96 and 97: Referendum on Amendment to Indian Gaming Compact

Proponents say the measures, which would vastly increase the size of the Indian gaming industry in California, are needed to help the state budget, by providing $9 billion over a 30-year period to the state budget. The four measures are written specifically for four of the richest tribes in California, the Sycuan of El Cajon, Pechanga of Temecula, Morongo of Riverside County and Agua Caliente of Palm Springs, who together control about one-third of the $8 billion per year untaxed revenue pouring into Indian gaming casinos. Those four small tribes — many of whose adult members are now millionaires and multimillionaires — have promised to give about $1 million per year to the state's poorer tribes.

Opponents say the measures would hand billions in untaxable revenue to more than 2,100 already very wealthy Southern Californians — the four tiny tribes that now control more than $2 billion a year in untaxable revenue. Critics say that in just seven years, these four tribes have grown as rich in revenue as the entire California amusement park industry, and tribal leaders are using their great wealth to underwrite the campaigns of state legislators who support even more casinos. According to California Legislative Analyst Elizabeth Hill, who conducted a nonpartisan study of the four measures, the California Treasury would notice almost no change: The measures force the tribes to pay so little that the state budget would be boosted by less than 1 percent annually. Aside from financial concerns, opponents are also dismayed that many expansion projects by the four tribes would be exempt from oversight under the California Environmental Quality Act, giving the tribes an unfair advantage over competing amusement developers and possibly putting neighboring residents at risk. Unions are also against the measure, because the deals would not guarantee affordable health care for casino workers.

Read Marc Cooper's feature, Tribal Flush and his Dissonance column Gambling Lobby Lapdogs.



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