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Jon Coupal- Columnist

Jon Coupal is an attorney and president of the Howard Jarvis Taxpayers Association -- California's largest taxpayer organization with offices in Los Angeles and Sacramento. [go to website]

How the Deck is Stacked Against Taxpayers
Homeowners are waking up to bonds: a self-inflicted tax...
[Jon Coupal]

In the last two weeks, we here at the Howard Jarvis Taxpayers Association have been inundated with calls and e-mails from homeowners who have just received their property tax bills. They are shocked to find increases of as high as 11 percent over last year's amount.

While Los Angeles taxpayers seem hardest hit, residents of other areas have also seen hefty increases in their tax bills.

Most of those contacting us are savvy enough to know that Proposition 13 limits annual property tax increases to only two percent and want to know why they have been hit with a bill that is several hundred dollars more than they were expecting.

So what gives?

Many of the callers are surprised to learn that these higher bills are the result of new taxes or bonds approved by voters. While Proposition 13 limits the basic property tax or ad valorem tax to one percent of value, additional increases are allowed for so-called parcel taxes approved by two-thirds of voters and for voter approved bonds.

In Los Angeles County, property owners are being billed for a "trauma care" tax approved by voters last November. Those who fall within the Los Angeles Unified School District and the Los Angeles Community College District are being hit with two huge new school bonds, the first passed in November and the second approved in March. For the community college district, it is the second successful bond measure in two years.

Since these measures were voter approved, it would be easy to blame taxpayers for their own predicament. But that would not be entirely fair because the process of securing that voter approval is itself a scandal. In other words, cities, counties and special districts -- with the help of high-priced consultants -- have elevated the passing of taxes to an art form at which they excel. Actually, it's quit easy for one simple reason: They stack the deck.

First, and perhaps most damaging, is that under law the agency sponsoring the new tax or bond, gets to write the ballot question. That's why the word "tax" is rarely seen. For example, voters will be asked if a particular school district should issue bonds to pay for a number of terrific sounding projects and they are told that there will be significant oversight and accountability as the money is spent. The fact that the bond would add over a hundred dollars to the average property tax bill is never mentioned. Unfortunately, many voters fail to make the connection between a local bond and higher property taxes.

The failure to make that connection is devastating when it comes to school bonds. Because of Proposition 39, passed in 2000, the sheer number and magnitude of bond proposals has exploded. This initiative, wrapped in the mantle of "accountability," had as its primary goal the lowering of the vote threshold from two-thirds to 55 percent to pass these bonds. Now, an attractive and misleading ballot question may be all that is needed to guarantee passage.

But wait. There's more.

In the case of many bond measures, bond sellers agree to wage a campaign for passage in return for being guaranteed the brokerage business if the bond passes. Ultimately, taxpayers pay for the fees and commission that bond brokers earn. Since the fees and commissions allow the brokers to recover their campaign costs, taxpayers are indirectly paying for the campaign to raise their taxes.

Finally, tax raisers employ a number of strategies that are recommended by highly paid consultants.

These experts suggest avoiding the use of the word "tax" and the use of "run silent, run deep tactics," as one successful consultant has described it.

Because newspapers usually provide an opponent an opportunity to criticize a tax increase, campaign consultants recommend against doing anything to publicize proposals, like issuing press releases, that will alert the community to the effort to wring more money from taxpayers. Tax proponents should confine themselves to telling only their supporters -- which often means public employee unions who will benefit from higher taxes -- about an election.

Since government agencies are prohibited from using public funds for advocacy purposes, consultants recommend that officials spend money on polling to find out what arguments are most likely to sway voters.

Consultants tell their clients to always talk about the benefits a measure will bring -- if somebody starts to talk about taxes, "move away from that and talk about what the benefit is."

Tax raisers are also encouraged to use "white hats" such as senior organization and chamber of commerce leaders to sign ballot arguments.

Of course if sponsors of a tax increase measure can schedule it for an election that is likely to be overlooked by most people, that is a tremendous advantage.

For voters in more than a score of local jurisdictions there is an election this November 4th to decide a number of tax increase proposals.

Has anybody noticed?


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