Repeal the Gas Tax, Flush the Rain Tax, and Veto the Bank of Los Angeles

LA WATCHDOG--When you oppose a new tax such as the State’s Gas Tax or the County’s Rain Tax, the all-knowing political establishment, the leaders of the campaign funding public sector unions, and many other bottom feeders go ballistic, claiming that you are clueless, ill informed, and mean spirited, and do not understand the big picture and the nuances of the budget and government finance. 


The same is true when you oppose a pet project such as Los Angeles City Council President Herb Wesson’s baby, the municipally owned Bank of Los Angeles. 

To the contrary, many of us are sick and tired of having our pockets picked by the State, the County, and the City, all of whom are experiencing record revenues totaling almost $250 billion. But there is never enough money for our spendthrift politicians, who want to hit us for more dough to cover up their failure to invest in our highways and stormwater systems. 

Over the last two years, the State has raised our taxes by $13.6 billion.  This includes the $5.2 billion increase in the gas tax that is the subject of Proposition 6, the effort to repeal this regressive tax.  Leaving aside the fact that we have the highest gas taxes and prices in the country, the State can easily forego this money by eliminating the payments to city and county governments that consume half of the $5.2 billion in tax revenue.  

The State could also save north of $500 million by reforming its Department of Transportation as recommended by the State’s Legislative Analyst and probably a like amount (or more) by outsourcing a portion of the highway projects.  The balance could be covered by the increase in the budget that now totals over $200 billion.  

Over the last two years, we have been hit up for $1.2 billion in new countywide taxes, in large part because the County and Metro illegally spent over $10 million of our money to finance the political campaigns to advocate for these new taxes. 

Now the County is “investing” another $10 million to “educate” us on why we should approve the $300 million Rain Tax (Measure W) that will fund its stormwater program.  But there is no comprehensive plan to address urban runoff other than a few highly engineered projects which professionals believe are overly complicated, prone to failure, require high levels of maintenance, and do not produce any meaningful amounts of recycled water at a reasonable price.  

Rather, the County’s plan is simple: give us billions and we will figure out how to spend it.  Hardly a recipe for success.  

The alternative is to develop a plan that relies on relatively simple, easier to maintain, proven solutions funded by the County’s budget that now exceeds a record $30 billion.   

The City of Los Angeles is asking us to approve Charter Amendment B that would allow the City to establish the municipally owned Bank of Los Angeles. But like the County, the City has not developed a plan despite the recommendation of the Council’s Chief Legislative Analyst.  Rather, the City wants a blank check to transfer legally designated funds from the City’s high-grade investment portfolio into an uninsured blind pool (the Bank) overseen by inexperienced political appointees that will be used to finance pet projects and to make loans to politically connected borrowers. A recipe for disaster, just like the bankrupt Los Angeles Community Development Bank.  

The proponents of the Bank of Los Angeles have citied the publicly owned German banks as excellent models.  But they seem to have conveniently overlooked the failures of West Landesbanken, HSH Nordbank, and Bankengesellschaft Berlin that cost taxpayers tens of billions when they failed because of inside deals with politically connected borrowers.  

The State, County, and City have not developed reasonable plans to spend our money.  There is no independent oversight and no powers of enforcement.  

Time has come to ignore the political establishment and tell them that we are not their ATMs.  

Proposition 6 deserves a YES vote: Repeal the Gas Tax.  

Measure W (the County’s Rain Tax) has earned a NO vote.  

And Charter Amendment B (the Bank of Los Angeles) deserves a NO vote.


(Jack Humphreville writes LA Watchdog for CityWatch. He is the President of the DWP Advocacy Committee and is the Budget and DWP representative for the Greater Wilshire Neighborhood Council.  He is a Neighborhood Council Budget Advocate.  He can be reached at:  lajack@gmail.com.)