LA and CA Politicians Believe Money Grows on Trees

LA WATCHDOG--The blue wave has caused politicians throughout the State to believe that money grows on trees in our back yards.  Many are planning tax, rate, and fee increases, including LAUSD, DWP, Metro, the City, and the State.  But at the same time, all are experiencing record revenues.      

The Los Angeles Unified School District voted on Thursday to place on the June ballot a “leap of faith” parcel tax designed to raise $500 million.  This tax will be based on the square footage of any building in the 710 square mile area served by LAUSD.  This represents a 7% increase in our real estate taxes, although a heavier burden will be placed on commercial and industrial properties.  [See the title and summary information from the February 28, 2019 Board meeting below.] 

While the District will present us with a compelling case as to why we should approve this measure (“It’s for the kids!”), it has not addressed pension reform even though its ever increasing annual required contributions are eating the Department’s lunch, crowding out basic services.  Furthermore, the unfunded liability for pension and post-retirement medical benefits that exceeds $22 billion will be a continuing burden for the District.  

LAUSD has not downsized its bloated bureaucracy that has increased by 20% while enrollment has dropped by 30%.  Nor has LAUSD developed a system to reward excellent teachers as it still relies on seniority, making it very difficult to staff underserved communities and to jettison under-performing teachers who have tenure.   

In February, Mayor Eric Garcetti announced two major initiatives for the Department of Water and Power that will end up costing more than $20 billion. This will result in massive increases in our already higher than expected rates. 

On February 12, Garcetti announced that the Power System would discontinue the repowering of its three coastal natural gas fired generating stations and would rely on renewables and energy storage (batteries, pumped storage, compressed air) in its efforts to be carbon neutral by 2050.  Unfortunately, no information was provided by Garcetti or the Department on cost or the impact on rates.  

On February 21, Garcetti announced an $8 billion plan to recycle 100% of the City’s wastewater by 2015, a program designed to provide the City with a third of its water by 2035.  A “Mulholland moment” according to Garcetti.  This plan to turn raw sewage into drinking water is better known as “toilet to tap.”  

Of course, many have speculated that Garcetti’s timing of these initiatives is an attempt to deflect attention away the corruption and rats at City Hall, the same issues that contributed to his decision to end his quest for the White House. 

Metro has also gone off the rails, proposing a range of congestion taxes that range from $1.2 billion to $5 billion to $10 billion per year.  They tell us that these new funds will be used to speed up the completion of eight projects totaling $26 billion in time for 2028 Olympics.  This Garcetti inspired Twenty-Eight By ’28 Program includes the $8.6 billion Sepulveda Tunnel, a project that has no chance of being completed in time for the Olympics. See Congestion Pricing: Another Revenue Grab by Metro. 

Metro has also taken aim at Uber and Lyft, blaming them in part for its declining ridership.  Under Metro’s plan, Uber and Lyft, and therefore its riders, will be tagged for between $40 to $550 million a year, or 20 cents to $2.75 per ride, respectively.    

Metro is currently benefitting from $3 billion a year from sales taxes revenues.  But it still is an inefficient organization, plagued by declining ridership, poor service, personal safety, cost overruns, questionable management, and too much meddling by the politically appointed Board. More money will only make matters worse by allowing for even more coverups.  

The City of Los Angeles is also joining the parade.  On Wednesday, Councilman Paul Krekorian submitted a motion to have the City study the concept of placing on the ballot a new tax to fund licensed child care programs at the Department of Recreation and Parks.  No financial information was provided, but $50 million would be a reasonable guess.  

Our friends in Sacramento are also busy trying to pick our pockets.  

Richard Bloom (Santa Monica) has proposed a $2 billion sugar tax on sodas.  

Governor Newsom has proposed a 95 cent a month water tax that would raise over $100 million to fund water improvements in rural, underserved communities, primarily in the Central Valley.  

Newsom is also considering a monthly tax on mobile phones and landlines to raise over $100 million to improve the State’s 911 emergency notification system, especially given the recent wildfires. 

The Legislature is considering a 10% Oil and Gas Severance Tax that would raise $900 million for the State’s General Fund, even though past efforts has failed. 

The Split Roll is on the 2020 ballot. If passed by the voters, it will raise an estimated $10 billion for local governments from the owners of commercial and industrial properties that would be valued at their market value, not their purchase price. 

There are even rumblings in the Sacramento to overturn Proposition 13 in its entirety.  While this would raise billions, it will have a devastating impact on the value of single family and multifamily residences. 

It is strange that our politicians are asking for even billions more of our hard earned money when they are experiencing record revenues.  Of course, this raises many questions which need to be answered in a straight forward manner, void of campaign rhetoric, if the politicians want to earn our vote.  Otherwise, we need to say no at the polls.   

Los Angeles Unified School District Ballot Measure Title and Summary

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QUALITY TEACHER, CLASS SIZE REDUCTION, AND LOCAL SCHOOL SAFETY MEASURE 

To retain/attract quality teachers; reduce class sizes; provide counseling/nursing/library services, arts, music, science, math, preschool, vocational/career education, safe/well maintained schools, adequate instructional materials/supplies; support disadvantaged/homeless students; shall Los Angeles Unified School District levy $0.16 per square foot of building improvements annually, exempting seniors/certain disability recipients, providing approximately $500,000,000 annually for 12 years, requiring annual audits, oversight, and funding local schools? 

 

(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.)

-cw