03/29/2024

Using Citizen’s Initiatives to Repeal Local Taxes

Local reforms can be initiated by city councils and county boards of supervisors, but they can also be initiated by citizen activists. That’s exactly what’s happened, three times, thanks to the efforts of a group based in Pasadena called “TeaPAC.” Their specialty has been to offer voters the opportunity to repeal local taxes, utility taxes in particular.

First some background. As the chart below shows, in November 2016, local voters in California were offered 193 local bond measures, and 224 local tax measures. As can be seen, local voters approved 94% of the local bond measures, amounting to approximately $2.1 billion in additional loan payments per year. Local voters also approved 71% of new local tax measures, adding nearly $3.0 billion in new taxes per year.

While this evidence – consistent with past elections – suggests California voters tend to support local tax increases, the narrative that has successfully motivated Californians to support new taxes is wearing thin. Proponents of new local taxes, almost always the city management and local elected officials, have claimed new taxes are necessary to support public safety and maintain infrastructure.

This is only half-true. The other side of the story is the fact that public employee benefits – when one includes payments on pension obligation bonds, direct payments to the pension systems, and costs for premium health insurance for active and retired public employees – now comprise between 10% and 20% of city budgets. These percentages go up every year and there is no end in sight.

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