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  San Pablo Council Member Breaks Down Reasons to Support Prop 22
October 5, 2010

San Pablo Council Member Breaks Down Reasons to Support Prop 22
Guest Feature: Leonard McNeil, Council member, San Pablo

The following op-ed is in opposition to an editorial that appeared in the West County Times that urged a “no” vote on Proposition 22. Council member McNeil tackles the reasons why he thinks the editorial gets it wrong.

The West County Times September 8th editorial opposing Proposition 22 appears to gloss over the fiscal realities that confront school districts, local government, county government and community college districts. While the editorial paid lip service to the plight of local government, it acquiesced the electoral larceny of absconding with local property tax and redevelopment revenue due to the imperative of state government requiring flexibility.  The editorial seems to take the position that the general fund of the state of California is more important than the general funds of local government.  Coupled with the downturn in the economy in terms of sales and property taxes, state raids on local government funds have contributed to severe cutbacks in local police, fire, parks, libraries, street and road repair.
The short-sighted fiscal decisions made by state government confirmed the imperative of cities, counties and school districts to take demonstrative action to overhaul the state’s convoluted system of financial government.  As a matter of aligning authority, responsibility, resources and accountability, local government should exercise domain over programs, taxation and spending decisions that lie within the realm of cities, K-14 schools and county government. Fundamental fiscal reform is being made at the ballot box precisely because voters and local government have no faith that the state government is fiscally prudent.

The example of state government cannibalizing local government will cost the five West County cities more than $5 million in property taxes and $27 million in redevelopment revenue.  Redevelopment investments in the state generate $32 billion while the state takes redevelopment funds to obtain $2 billion towards its budget deficit. This tortures logic! The deleterious effect of the state’s action resulted in the city of San Pablo being forced to abandon $70 million in economic development projects. The state raid on local revenue undermines the constitutional amendment passed by voters in 1952 as a tool to address blighted urban areas. In voting to support the extraordinary heist, the state government totally abdicated principle and respect for local government.  While claiming that the state government must pay local government back within three years, the editorial seems to obscure the financial impact on local government over the three year period. As it stands now, the state government owes cities more than $900 million from years past.

With respect to the paucity of the fiscal management of the state budget, cities cannot expect that “borrowed” money will be repaid. The safeguards under Propositions 1A in 2004 and 2006 did not prevent the state government from taking funds from local government.  The state legislature has exploited loopholes in these laws. It has forced un-funded mandates on local government. State government does not have unlimited discretion to redirect local redevelopment funds that is tantamount to creating deficits for municipal government and school districts. It is totally absurd to force local government to bail out state government in the midst of cities dealing with their own budgetary issues.
Last year, during the worst budget crisis in the state’s history, corporations were given $2 billion in tax cuts. While the state government cannot seem to allocate adequate funding for infrastructure, education, human services, housing, parks and public safety, it has no trouble redistributing wealth upwards in the form of corporate welfare. For the past eight years or so, three-quarters of the state’s corporations paid no more taxes than the $800 minimum franchise tax. Among these were 46 corporations with more than $1 billion in receipts in a state that has the third largest number of Fortune 1000 companies after Texas and New York. If public confidence in the state legislature is to be restored, the elective body must find substantive solutions to the inequity that impacts cities, K-14 schools and county government with particular severity. The state legislature needs to deal with its budget issues by making the hard decisions, not by siphoning redevelopment funds from local government.

Governor Schwarzenegger and the state legislature must recommend the elimination of loopholes which allow corporations to avoid paying a fair share of property taxes. Proposition 13 must be reformed to compel commercial property being assessed at fair market value as a matter of equity. This costs cities, counties and schools billions of dollars. California does not receive its fair share of federal funds, which forfeits $52 billion annually. California’s population will increase by 10 million by 2020, increasing the demand for programs and services. 

Opponents to Prop 22 ignore the impending disaster for major community revitalization projects in California, are blind to the undermining of future borrowing ability because redevelopment agencies would forever be vulnerable to state legislative actions, and turn a deaf ear to blight continuing unabated, driving down property values on top of the mortgage foreclosure crisis.
The state legislature has made fiscal decisions that erode voter confidence in state government and undermined the relationship between levels of government.  There are myriad ways to effectively address the state budget crisis. However, taking funds that are legally obligated to local government cannot be included as a viable and responsible alternative.

--Leonard McNeil, Council member, San Pablo