In the primary election this month 89 local taxes and bonds faced voters. The total is expected to increase in November. In some jurisdictions voters likely will face multiple tax increases dedicated for different purposes.
Los Angeles is a prime example.
Today, the transportation agency known as Metro is considering a half-cent sales tax to fund transportation projects. Los Angeles already has a sales tax for transportation but it has an end date approaching. No end date on the new tax proposal. In a change of tactics, Metro leaders decided to extend the sales tax on a permanent basis.
Los Angeles city residents will probably also face a bond or parcel taxes to fund homeless remedies. The city council plans to move both measures forward, making the final decision on which mechanism to advance to the ballot once council members can further “study” the issue.
Consider that shorthand for which version polls better.
In fact, polling already seems to be moving the decision makers to consider a bond to benefit the homeless. Voters often look at bonds as free money, not realizing that they are funded by property tax increases. Polling shows greater acceptance for bonds than parcel taxes, which have the dreaded “tax” word attached.
In reality, a $1 billion bond would cost twice as much as the $1 billion parcel tax program because of the interest to pay the bond. Parcel taxes have their own issues that could upset a campaign to achieve the necessary two-thirds voter for passage, the same mark bonds must hit. Would a parcel tax be levied per parcel or per square footage? Square foot charges are aimed at collecting more revenue from larger, commercial properties, which likely would open the door for an opposition campaign funded by business. In addition, a square footage tax may be challenged as unconstitutional.
Despite the economics of the more expensive bond proposal, the politics favor pursuing that approach.
Meanwhile, Los Angeles County is considering a parcel tax for parks. The county also considered raising an income tax for the homeless but that plan has sputtered. It required state approval which it did not get. The parks proposal would more than double revenue now brought in by the property assessments that currently help fund county parks. Again, business is opposed to the square foot method and has informed county supervisors that so many, varied tax measures cannot be justified.
In addition to local taxes, voters will face statewide tax measures on the ballot. The $2 a pack cigarette tax increase and the Proposition 30 income tax extension initiatives are both expected to be on the ballot. And, let’s not forget that the marijuana legalization measure has a tax attached to the growth and sale of cannabis.
Analysts wonder how voters will react to an onslaught of taxes. The question is particularly of concern in localities like Los Angeles if all the taxes are placed on the ballot. Many of the local taxes and bonds, unlike the state measures, require a two-thirds vote to pass.
My guess is that multiple tax measures will benefit opponents who need just over one-third of the vote to defeat most tax measures.
Joel Fox is editor of Fox & Hounds and president of the Small Business Action Committee.