By Craig Alexander
February 10, 2020
The economy has been booming over the last decade, which has provided local governments with a windfall in sales and property taxes. Despite the economic fat times, California cities have been complaining about their dire economic straits, with some of them even fearing insolvency unless something is done to change the financial trajectory.
What explains this dichotomy? The answer is simple. The costs of public employee compensation, especially pension and retiree-medical benefits, continue to climb exponentially and are consuming ever-larger portions of local general-fund budgets. One need only look at the Transparent California website to get a sense of the eye-popping levels of pay and benefits.
Instead of addressing this well-documented problem, state and local leaders have relied on a tried-and-true method: asking local taxpayers to increase taxes on themselves. California voters will see the latest evidence of this at the ballot box during the March 3 primary. The California Taxpayers Association (CalTax) recently published a list of more than 230 tax increases that will be on local ballots.
These increases include school bonds, general-obligation bonds, parcel taxes, sales taxes and transient occupancy taxes. The proposed hikes all have limits on how the money can be spent, but money is fungible. If cities and school districts spend too much on pensions and employee compensation, that means they need to find money elsewhere.
Local governments and school districts always tout these measures as necessary expenditures to rebuild crumbling schools, maintain overused parks and provide better police services, but don’t be fooled. Every new local tax these days is, essentially, a pension tax. These governments write the ballot summaries and provide “voter information,” so they are able to sway the discussion away from the true causes of their fiscal peril.
To make matters worse, a March statewide ballot measure – known as Proposition 13, but it has nothing to do with the original tax-limiting Proposition 13 from 1978 – has a problematic provision that significantly raises the debt limits for local school districts. If it passes, local voters will see even more property-tax-raising school bonds on future ballots.
“Pension costs have crowded out and will likely to continue to crowd out resources needed for public assistance, welfare, recreation and libraries, health, public works, other social services, and in some cases, public safety,” warned former Democratic Assemblyman Joe Nation in a 2017 report for the Stanford Institute for Economic Policy Research.
The picture hasn’t gotten any better since then. State Sen. John Moorlach, R-Costa Mesa, released a report last month on the financial health of local governments and found that California municipalities have gone “from $22.7 billion in the red in 2017 to $31.5 billion in 2018. That is a 39 percent increase in these unfunded liabilities in just one year. It is also like the 40 percent increase in one year in unfunded liabilities for the state’s 944 school districts.”
No wonder local governments and school districts – backed by public-sector unions that want to keep funds flowing to benefit their members – are always pushing so many tax hikes. Nothing will force these agencies to spend their budgets more wisely, to get public-employee compensation under control or to pressure the state government for serious pension reform as long as voters keep handing them more of their hard-earned money.
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Craig P. Alexander is an attorney and former U.S. Marine who serves as general counsel to the California Policy Center. His office is located in Dana Point, California and his practice includes insurance, commercial leasing, business contracts, the California Public Records Act and HOA law and litigation. He can be reached at [email protected]. This originally appeared in the Orange County Register.
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ENTRIES BY CRAIG ALEXANDERCalifornians face a wave of local tax hike measuresFebruary 10, 2020 in 2020, LATEST CALIFORNIA NEWS, Unions /by Craig Alexander
Support our troops? Support education choice for their kidsApril 4, 2018 in 2017, Education, LATEST CALIFORNIA NEWS /by Craig AlexanderAmong the many burdens we place on military families, there’s frequent re-location from one military duty station to another – one year you’re in North Carolina, the next in Southern California or Norfolk, Virginia or even Germany or Japan. These are not combat zones but some of the places the military send both the military […]
Transparency: The Legislature Giveth and the Legislature Taketh Away – Simultaneously!June 5, 2017 in Finance /by Craig Alexander
Unions trying to kill government transparencyMay 1, 2017 in UNION WATCH, Unions /by Craig Alexander
Court sides with parents in battle with district over lousy schoolApril 28, 2017 in 2017, Education /by Craig AlexanderOfficials fought parents for years to keep children in a failing Anaheim school In 2015 parents at the Palm Lane Elementary School of the Anaheim City School District turned in far more signatures than needed under the Parent Trigger Law (authored by former State Sen. Gloria Romero as Ed. Code sections 53300-53303). The goal of the […]
On One Day in Two Decisions, Courts Reaffirm Californians’ Right to KnowMarch 16, 2017 /0 Comments/in 2017, NEWSLETTER /by Craig Alexander
Freedom and Liberty = Public Charter SchoolsMay 6, 2016 /0 Comments/in Education /by Craig AlexanderAs a follow up to my post of last week (Anti-Choice Teachers Unions Want to Take Control of O.C. Board of Education), former State Senator Gloria Romero has penned another excellent op-ed piece in the O.C. Register. In Celebrating National Charter Schools Week Senator Romero not only noted that this week is a time to […]
Anti-Choice Teachers Unions Want to Take Control of the OC Board of EducationApril 28, 2016 /0 Comments/in Education /by Craig AlexanderEveryone agrees that education for our children is a critical pathway for those children to grow into adults who are ready to earn a living and become responsible members of our society. Unfortunately labor unions including teachers unions have a different focus – to benefit their union bank accounts with your tax dollars more than […]
Los Angeles Could Use a COIN Ordinance – But That Will Only Come When Its Voters Demand ItSeptember 3, 2015 /0 Comments/in Unions /by Craig AlexanderWe in Orange County have seen several versions of the COIN Ordinance (Community Openness In Negotiations). COIN ordinances provide for more and earlier disclosure to the taxpayers during and in the run up to the final approval of a contract between the public entity employer and a government employee union. This allows the citizens to […]
Parents and Children Win The Right to Start a Public Charter School at Palm Lane ElementaryJuly 17, 2015 /0 Comments/in Education, Unions /by Craig AlexanderYesterday (July 16, 2015), after a seven day trial, Superior Court Judge Andrew P. Banks issued his decision awarding the parents and children who wished to convert their failing public school Palm Lane Elementary into a public charter school under the Parent Empowerment Act (also known as the Parent Trigger Law). To read the Court’s ruling […]
Harris v. Quinn, an Important Limitation on Forced UnionizationJuly 1, 2014 /0 Comments/in Uncategorized /by Craig AlexanderOn Monday, June 30, 2014 the United State Supreme Court issued its ruling in the important case of Harris v. Quinn. While the case is limited in its ruling and scope, it is a critical one where the Court boxed in the ever expansionist reach of government employee unions. Background: Mrs. Pamela Harris is the […]
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