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A Lesson To The Entire State
The Watsonville Tax Vote...

[by Jon Coupal] 1/24/06

Watsonville, a central California community of 47,000 residents, may be best known for its brussels sprouts and artichokes, but it is about to give the rest of the state an important civics lesson. Later this year, Watsonville voters will go to polls to decide whether or not to scrap a 57-year-old property tax.

The tax was established in 1949 to pay for pensions for municipal workers. The current assessment of $134 per $100,000 in assessed value -- over and above the standard property tax -- costs the typical homeowner hundreds of dollars a year, and provides about 10% of the city budget.

Jon Coupal

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] [go to Coupal index]

It would be fair to say that city officials are not amused. If the tax reduction measure is approved, they will have to make do with less. This explains the hostility to this exercise of citizens' rights guaranteed by Proposition 218, the Right to Vote on Taxes Act, an initiative proposition sponsored by the Howard Jarvis Taxpayers Association and approved by voters in 1996. One of the lesser-known provisions of Proposition 218 -- but one which gives voters a powerful tool -- allows voters in a jurisdiction to use the local initiative power to reduce or repeal a tax. Moreover, to ensure that government does not place an insurmountable hurdle to this right, Proposition 218 also provides that such tax reduction initiatives can be placed on the ballot by collecting signatures that total just 5% of the number of those who voted in the last gubernatorial election.

Right now, the vote is scheduled to take place in November, but the City Council is considering moving it to June. Critics contend that this is to make it easier for city employees and their allies to defeat the proposed tax cut. (The tax-and-spend crowd, demonstrating its usual hypocrisy, always complain about low voter turnout. However, when they believe they stand a better chance of getting "their" voters to the polls, they will do anything possible to suppress voter turnout).

Regardless of the merit, or lack of, of the current tax, the process puts voters in charge of making the final decision, and reaffirms the doctrine that not only should taxes be imposed through the consent of the governed -- the basic premise of Proposition 218 -- but that those same citizens have an inherent right to withdraw their consent.

And while it is the fate of taxes, not bonds, that is to be considered by voters, the process illustrates a very important difference between the obligation that comes with taxes and that associated with bonds.

Taxes do not represent a long-term commitment. Although taxes may seem to be set in stone, with sufficient citizen unrest, taxes can be cancelled at any time by elected officials or by voters through use of the initiative.

Bonds, on the other hand, are almost always an inviolable long-term obligation. Those who purchase bonds are guaranteed repayment by the "Impairment Clause" of the U.S. Constitution. For local bonds, payment is assured to creditors by placing a lien against all property within the sponsoring agency's jurisdiction.

For some taxpayers, being asked whether they would prefer to pay for taxes or bonds, the question is akin to being asked which finger they would prefer to have broken -- all of the options are unpleasant. Still, the vast majority recognize that some taxes and bonds are a necessary evil to pay the cost of a civilized society. But, given the choice of funding a project through ongoing tax revenues or bonds, taxes are almost always the better choice, because, as the residents of Watsonville are showing, voters have the option to change their minds. CRO

copyright 2006 Howard Jarvis Taxpayers association



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