Please ensure Javascript is enabled for purposes of website accessibility
Walters: Locals Seek New Taxes Despite $4B Property Tax Surge
dan_walters
By Dan Walters, CalMatters Commentary
Published 6 years ago on
October 17, 2018

Share

Local government officials throughout the state got some very good financial news when county tax assessors toted up changes in taxable property values for their 2018-19 budgets.


Opinion
by Dan Walters
CALmatters Columnist

That increase, three times the rate of inflation, translates into $4-plus billion more in revenue for cities, counties and other local governments.
The state’s uber-strong real estate market generated a 6.51 percent increase in those values, adding another $374 billion to the property tax rolls and pushing the total to $6.1 trillion.
That increase, three times the rate of inflation, translates into $4-plus billion more in revenue for cities, counties and other local governments. While schools also receive property taxes, they don’t directly benefit from the increase because of how state aid is structured.
The big winners are cities because, unlike counties and schools, they are almost totally dependent on local taxes and fees to finance their budgets.
San Francisco, which is both a city and a county, reported the state’s strongest assessed valuation gain, 10.35 percent.
The very strong growth in property tax revenue, however, raises a pithy question: Why then are so many local governments, cities especially, complaining that they can’t balance their budgets unless local voters raise taxes?

254 Local Tax Increases on the November Ballot

There are 254 local tax increases on the November ballot – sales taxes, parcel taxes, utility taxes and hotel/motel taxes, mostly – according to the California Taxpayers Association, 65 percent more than there were four years ago.
The reason is that even with strong property tax gains, local governments’ pension costs are growing faster than revenues, thus putting the squeeze on their budgets.
Cities have been hit the hardest by increases in mandatory payments to the California Public Employees Retirement System (CalPERS) as it tries to shrink its large “unfunded liability.”
City officials have repeatedly complained about the specter of insolvency if pension payments continue to grow and the League of California Cities has labeled the situation “unsustainable.”
With very rare exceptions, however, officials who place the tax increases on the ballot will not publicly say the extra revenue is needed to offset rising pension costs. Officials believe that telling the truth would make voters less likely to vote for the new taxes.
It could also make employee unions less likely to provide money for tax campaigns.
Rather, on the advice of high-priced consultants, they say the money is needed for popular police and fire services and parks.

Most Local News Media Are Carelessly Complicit

Unfortunately, most local news media are carelessly complicit in this conspiracy of silence, tending to accept the official reasons at face value, rather than analyze them critically.

Unfortunately, most local news media are carelessly complicit in this conspiracy of silence, tending to accept the official reasons at face value, rather than analyze them critically.
That’s true even though data about what revenue the new taxes would generate and projections of pension costs are readily available.
Over the weekend, for instance, the Sacramento Bee published a long article about proposed tax increases in Central Valley cities, quoting officials about what they hoped to do with the extra revenue, including Sacramento Mayor Darrell Steinberg, who called his one-cent sales tax hike a “game changer.”
However, the article only tersely mentioned pensions as something brought up by unnamed “critics,” even though the city’s own budget complains about pension costs and data indicate that the new taxes would largely go to pensions.
The Santa Cruz Sentinel, in a similar piece about new hotel/motel tax proposals in its region, took the opposite – and more responsible – tack by delving into how pensions are straining local budgets and driving tax hikes.
The Sentinel’s article, unfortunately, is a very rare exception. Otherwise, local officials and local media seem to believe that ignorance will be blissful.
CALmatters is a public interest journalism venture committed to explaining how California’s state Capitol works and why it matters. For more stories by Dan Walters, go to calmatters.org/commentary.

DON'T MISS

North Korean Leader Says Past Diplomacy Only Confirmed US Hostility

DON'T MISS

Democrats Strike Deal to Get More Biden Judges Confirmed Before Congress Adjourns

DON'T MISS

Newsom Gaslights on Potential Gas Price Hikes in Fresno Visit

DON'T MISS

Automakers to Trump: Please Require Us to Sell Electric Vehicles

DON'T MISS

President Biden Welcomes 2024 NBA Champion Boston Celtics to White House

DON'T MISS

Ohtani Makes History With 3rd MVP, Judge Claims 2nd AL Honor

DON'T MISS

Trump Chooses Pam Bondi for Attorney General Pick After Gaetz Withdraws

DON'T MISS

Average Rate on a 30-Year Mortgage in the US Rises to Highest Level Since July

DON'T MISS

Cutting in Line? American Airlines’ New Boarding Tech Might Stop You at Now Over 100 Airports

DON'T MISS

MLB Will Test Robot Umpires at 13 Spring Training Ballparks Hosting 19 Teams

UP NEXT

How Trump Can Earn a Place in History That He Did Not Expect

UP NEXT

Demography Drives Destiny and Right Now California Is Losing

UP NEXT

Defining Deviancy Down. And Down. And Down.

UP NEXT

How Three Trump Policy Decrees Could Affect California Farmers

UP NEXT

Donald Trump Is Already Starting to Fail

UP NEXT

I Can’t Wait for Matt Gaetz’s Confirmation Hearings

UP NEXT

Let the Games Begin: 2026 Campaign for CA Governor Looms

UP NEXT

Why Trump’s Deportations Will Drive Up Your Grocery Bill

UP NEXT

Dems Still Dominate California, but Their Voters Have Drifted to the Right

UP NEXT

If You Thought Trump Wasn’t Serious About Deportations, Look at His First Appointments

Automakers to Trump: Please Require Us to Sell Electric Vehicles

1 hour ago

President Biden Welcomes 2024 NBA Champion Boston Celtics to White House

2 hours ago

Ohtani Makes History With 3rd MVP, Judge Claims 2nd AL Honor

2 hours ago

Trump Chooses Pam Bondi for Attorney General Pick After Gaetz Withdraws

2 hours ago

Average Rate on a 30-Year Mortgage in the US Rises to Highest Level Since July

3 hours ago

Cutting in Line? American Airlines’ New Boarding Tech Might Stop You at Now Over 100 Airports

3 hours ago

MLB Will Test Robot Umpires at 13 Spring Training Ballparks Hosting 19 Teams

3 hours ago

Death Toll in Gaza From Israel-Hamas War Passes 44,000, Palestinian Officials Say

3 hours ago

Jussie Smollett’s Conviction in 2019 Attack on Himself Is Overturned

4 hours ago

Fresno Council Lowers Speed Limits on Friant and Audubon

4 hours ago

North Korean Leader Says Past Diplomacy Only Confirmed US Hostility

SEOUL, South Korea — North Korean leader Kim Jong Un said his past negotiations with the United States only confirmed Washington’s ...

11 minutes ago

11 minutes ago

North Korean Leader Says Past Diplomacy Only Confirmed US Hostility

16 minutes ago

Democrats Strike Deal to Get More Biden Judges Confirmed Before Congress Adjourns

56 minutes ago

Newsom Gaslights on Potential Gas Price Hikes in Fresno Visit

President Joe Biden with Mary Barra, the chief executive of General Motors, at the Detroit Auto Show, Sept. 14, 2022. President-elect Donald Trump has promised to erase the Biden administration’s tailpipe rules designed to get carmakers to produce electric vehicles, but most U.S. automakers want to keep them. (Doug Mills/The New York Times)
1 hour ago

Automakers to Trump: Please Require Us to Sell Electric Vehicles

2 hours ago

President Biden Welcomes 2024 NBA Champion Boston Celtics to White House

2 hours ago

Ohtani Makes History With 3rd MVP, Judge Claims 2nd AL Honor

Former Florida Attorney General Pam Bondi, speaks before Republican presidential nominee former President Donald Trump arrives to speak at a campaign rally at First Horizon Coliseum, Saturday, Nov. 2, 2024, in Greensboro, NC. (AP/Alex Brandon)
2 hours ago

Trump Chooses Pam Bondi for Attorney General Pick After Gaetz Withdraws

3 hours ago

Average Rate on a 30-Year Mortgage in the US Rises to Highest Level Since July

Help continue the work that gets you the news that matters most.

Search

Send this to a friend