Contra Costa Taxpayers Association

One of the benefits of the new Trump/Republican tax reform package (“A closer look at state’s tax burden”, Sunday, Jan, 14) is that it exposes the absurdity of spending and abusive taxes of California and other high tax states.  This exposure has brought on what some are calling the “Blue State Panic” as governors and legislators in “blue” states (California, New York, Connecticut, and Illinois, in particular) fear the new federal tax law will reduce federal revenue to their states, grow taxpayer anger, create new budget shortages, fuel the “need” for new taxes, and increase the movement of productive citizens out of their States to low tax States.  All are already in-play.

 The Importance of Income Tax in California.

 California has the highest and most progressive income tax in the country (high rates at lower income levels).  According to the State controller, personal income taxes are, by far, the largest source of revenue for California, accounting for 58% in 2016 (it has been as high as 65%) of ALL taxes collected by the State.  An analysis by the State Franchise Tax Board shows that the top 1% of California taxpayers by income paid 45% of the total income taxes collected and 26% of ALL taxes collected by the State.  The top 20% of taxpayers paid 90% of all income taxes collected, and 51% of all taxes.  These are the folks you do not want leaving California.

 By allowing Californians to write off state income taxes on their federal taxes, the federal government has helped California disguise its high rates and, more importantly, provided a massive federal subsidy for California’s out of control spending.  It has meant that ultimately the taxpayers of prudently run states have been paying for California’s largess.  Reducing the state income tax write off exposes these practices and puts more of the tax burden on California’s productive middle and upper middle-class citizens. 

 California’s response to the limit on income tax write-offs is the creation of a “non-profit” that Californians would be forced to “contribute” to while also paying our new road tax, new marijuana tax, higher toll fees for crossing state bridges, and the highest sales and gasoline taxes in the country.  This year’s tax planning includes growing the secret Cap and Trade tax, an attempt to add sales taxes to services and the rewriting of Proposition 13.  Nothing will satiate California’s governments desire for new taxes.

 Property Tax write-off

 If you are a California resident you have heard the whining by many Californian elected officials over Proposition 13.  This whining has become a movement to overthrow Proposition 13, first by a split roll taxation, then a full rewrite. Both would be devastating to California businesses and residents.

 In reality, the high price of housing has made Proposition 13 null and void already. High housing costs have been created by government through environmental programs/laws, inequity “solutions”, land use regulations, housing element laws, regionalization, zoning laws, permit processes and numerous fees and other charges.  The result has been the increase in housing costs that is two and a half to three times the cost of housing in other states.  Paying $800,000 for that $400,000 house doubles the property tax the homeowner pays while leaving the 1% rate untouched. Clever.

 In the meantime, government has raised the taxes and fees on everything else.  My property tax bill has fourteen other government taxes, fees and bonds charges.  These charges/taxes and the fact that most houses in California have been sold, and therefore, reassessed, more than once since Prop. 13 passed in 1978 have more than made up for Proposition 13. 

 California governments want and need high housing costs to embed and pay for a multitude of social justice, entitlement, legacy, and other programs.  High housing costs creates the “need” AND the funding for “affordable housing” programs, homeless programs, rent control, and other social programs that rob the middle class and siphon off half the money to bureaucrats to run the programs and grows the underclass necessary to benefit from the programs.  The Government made housing crisis is the engine of growth for government in California

 Reducing the mortgage write off will help bring sanity back into the housing market, make housing more available and affordable for middle and lower-class Californians and get government’s destructive presence somewhat out of our most basic need.

 Where do we go from here?

Government has been “solving” the homeless, the housing and the transportation crises for more than a decade.  The result is that all are worse than ever.

Federal government tax reform and reductions in regulations show us where to go to truly solve these problems.  January’s Federal job report shows us that unemployment is at its lowest rate in a decade and Black and Hispanic unemployment is at their lowest rate in history.  The Stock market grew more than 5000 points in 2017 (a record) and surpassed 25,000 points on the Dow and 7,000 at the Nasdaq this month (both records). 

Private construction spending hit an all-time high in 2017 (Commerce Dept. report) and U.S. Manufacturing reached record growth last year (Institution of Supply Management report), fueled by “domestic business investment”. 

The path is clear.  The Contra Costa Taxpayers Association believes the creation of wealth, not the redistribution of wealth, benefits everyone.  We recommend an across the board reduction in state and local taxes and a reduction and simplification of regulations.

It is time create a robust economy and to turn this failure known as California government around.

Hal Bray

925.240.7018

Mr. Bray is President of the Contra Costa Taxpayers Association, East County Chapter. The Contra Costa Taxpayers Association is a non-profit, non-partisan organization dedicated to promoting good government at affordable cost.  Mr. Bray is also co-founder of East County Voters for Equal Protection, a non-partisan grass roots citizens action committee formed to solve the unequal funding of fire and emergency medical services existing in Eastern Contra Costa County.  

By David Kersten
Kersten Institute for Governance and Public Policy
Monday, October 23rd, 2017

A recent report by the highly regarded Calmatters.com found that the State of California has been on a “taxing binge” over the past few years, having enacted a whole slew of recent tax increases such as the “gas tax,” the “cap and tax” energy taxation scheme.

The Calmatters.com analysis found that the recent state tax increases “plus a slew of new local government levies and hikes in personal income and taxable retail sales, will raise total tax collections to just under $300 billion, or $50 billion more than they were just two years ago,” according to the report.

For the complete article click here.

embers of a citizens-oversight committee questioned how the West Contra Costa school district uses bond money to construct or improve school facilities. They raised concerns about the district over-spending its budget and draining funds slated for future projects.

Despite the district’s desire to align projects with the budget, an independent investigation echoed these concerns, calling several of the district’s budgeting practices “high risk.”

Currently, the district has an estimated $362 million available in the next five years for projects such as building new schools or renovating classrooms. But the district has planned projects beyond, which will cost more than $1 billion.

For complete article, click here.

The city manager of once-bankrupt Vallejo expects soaring police pension costs to reach 98 percent of pay in a decade. Lodi employees dropped from 490 to 390 in the last decade. And Oroville, after cutting a third of its staff, recently cut police pay 10 percent.

Eight cities struggling with rising pension costs urged the CalPERS board yesterday to analyze two ways to reduce the cost of pensions, even though the proposals were said by the CalPERS attorney to be unconstitutional under current law.

For complete article click here.

A decade ago the San Francisco public pension system was known for being well-funded, winning good management awards, and going eight years with no annual payments from the city.

The distinctive feature of the San Francisco system — requiring voter approval of pension increases — was approved by voters for the San Diego pension system in 2006 and the Orange County pension system in 2008.

Last month, a Civil Grand Jury report concluded that most of the debt of the San Francisco Employees Retirement System, which has been underfunded for more than a decade, was approved by the voters who in theory are a safeguard.

For complete article click here.

BY TERESA CASAZZA

Special to The Bee

What should be done about the state Board of Equalization in response to the report that the tax agency misused revenue-generating staff and misallocated some sales tax revenue among different funds? Equally important, what shouldn’t be done?

The Legislature is poised to act and faces two options: Reform the agency as part of the usual policymaking process, with public hearings, or jam changes through the state budget process, without input from small business owners, consumers or others who will be most impacted.

Unfortunately, the latter approach seems to have support from key policymakers. Their goal appears to be to make drastic changes to the BOE – far beyond those needed to address the problems identified by the state’s evaluation – and spring the changes on rank-and-file legislators and the public at the last minute, roughly 72 hours before a vote.

THE LEGISLATURE HAS TWO OPTIONS: REFORM THE TAX BOARD AS PART OF THE USUAL, PUBLIC PROCESS OR JAM CHANGES THROUGH IN THE STATE BUDGET. WE PREFER THE MORE THOUGHTFUL APPROACH.

To accomplish this, the changes would be included in the state budget process, even though BOE reform is not truly a budget matter.

As the oldest and largest group representing taxpayers in the state, the California Taxpayers Association is calling for a more thoughtful approach. The BOE clearly needs to change the way it operates, but the changes must be made with full transparency.

Assemblyman Sebastian Ridley-Thomas, who chairs the Assembly Revenue and Taxation Committee, has introduced reform legislation (Assembly Bill 1210) that takes the right approach. His bill outlines a framework for reforms to address problems identified in the Department of Finance’s evaluation while preserving core functions that protect taxpayers’ rights.

For example, we must safeguard the Taxpayers’ Bill of Rights, which itself is a 1988 reform that could be rolled back if the current reform effort isn’t carefully undertaken.

It also is worth noting that the BOE collects approximately one-third of the state’s annual tax revenue, has more than 4,000 employees and is responsible for such things as hearing tax appeals (in a setting that doesn’t require lawyers, and is accessible to taxpayers of all income levels) and making sure retailers don’t overcharge customers for sales tax.

Changes to an agency this important – to the state and taxpayers alike – should be made only after a thorough vetting, and should not be part of the notoriously hasty and politically charged budget process.

Yes, the state can and must improve transparency at the BOE. But transparency is never improved through backroom deal-making.

TERESA CASAZZA IS THE PRESIDENT AND CHIEF EXECUTIVE OFFICER OF THE CALIFORNIA TAXPAYERS ASSOCIATION. SHE CAN BE REACHED AT CALTAX@CALTAX.ORG.

Unfunded Pensions - With the recent flood of newspaper articles and editorials on the state's unfunded public employee pension crisis, CoCoTax members are validated in our years-long campaign to bring attention to the issue.  Along with several county grand juries, we have reported the looming shortfall, and urged changes to correct the problem - mostly to no avail.  Even fiscally responsible local officials have often told us, "we have little control; it's a problem only the legislature can fix."  Nevertheless, our newly formed CoCoTax Pension Task Force has identified a number of measures that local jurisdictions may be able to employ effectively.  We'll begin rolling out those solutions shortly.  Admittedly, these actions will represent "nibbling at the edges," but are worth serious consideration.  More municipal bankruptcies, cuts in public services and even reductions in pensions are the likely future, unless elected officials and union leaders see the light and take action.  (Unfortunately, the "other shoe" of public fiscal bad news is just around the corner, when agencies will soon be required to report their unfunded employee health care debt, likely to rival pension debt in magnitude.)  

Potholes - While the pension issue belatedly now commands public attention, the flip side of the problem is seen (and felt) in the terrible condition of our roads, bridges and other components of our transportation infrastructure.  Potholes on major highways now cause serious accidents, and commuters suffer hours of daily congestion delay.  In order to divert funds for employee compensation and now to pay increased pension costs, Sacramento and virtually every public agency responsible for our roads have repeatedly deferred necessary maintenance.  AAA now estimates California drivers suffer $700 a year in vehicle damage attributable to poor roads. This cost is in addition to the newly passed gas tax and increased vehicle registration fees.  Yet, we are skeptical that the new funding will actually be used to improve our roads, but rather to a) fund the governor's legacy High Speed Rail fiasco, and b) pay for pensions.

Speed Bumps - We've all encountered the frustration of bumping our way over the asphalt obstacles deliberately placed in parking lots, ostensibly to force drivers to reduce their speed.  The presumption is that some will otherwise drive too fast, endangering pedestrians.  But, in reality, it only causes the scofflaws to drive faster between the bumps, negating the intended safety outcome.  To my philosophical mind, speed bumps represent a negative shift in our culture, where the freedom of all is burdened by a perceived need to protect us from those who will not be held accountable for their actions.  If grownups are shielded from the consequences of their bad acts, how are youngsters to learn the life lessons necessary for good citizenship?  Honesty and personal accountability - two critical elements of a traditionally virtuous American society - are undermined by participation trophies, plea deals, politicians who lie with impunity, and, yes - those darned speed bumps.

Jack Weir

(925) 899-4298 cell

Protest EBMUD Rate Increases to Water and Waste-Water Charges

EBMUD has proposed raising water rates by 9.25% in July and 9% next year.  They also propose to raise wastewater rates by 5% each year as well.

The proposed increases are outrageous.  Why, in this age of technological advancement and innovation are district consumer charges increasing?  Does the district not engage in exploration of technology that lowers costs?  

One suspects the real issue is steadily rising employee labor costs, to cover salaries and - more especially - rapidly rising benefit costs.

Further, EBMUD’s failure to acquire additional storage capacity over the years is inexcusable.  The district has always had access to population data which made clear that there would be need for significant additional storage resources, but the district's approach for the past decade has been passive.

Ratepayers should protest these proposed increases in the strongest possible terms.

Write before June 10 to:

EBMUD S-218

PO Box 24055

Oakland, CA 94623-1055

Jack Weir

(925) 899-4298 cell

For those that may not have read the prior articles on Regionalism, the movement is generally characterized by a shift from our local forms of government (cities and counties), led by our elected officials whom we can hold accountable for local decisions, to a system of regional governance, led by appointed officials that carry out regional priorities, regardless of local decisions.  These entities and officials have no electoral accountability.  Last June, 5 of the 9 Bay Area counties approved a parcel tax, Measure AA.  Contra Costa did not approve this, yet we’re obligated to pay it.  The dollars are small, but the point is that we now have an unelected regional body with the ability to put measures on our Contra Costa County ballot and implement a tax we did not approve.

The Metropolitan Transportation Commission (MTC) was created in 1970 by the State Legislature to coordinate transportation services across the Bay Area.  MTC is designated a regional transportation planning agency (RTPA) by the State of California and a metropolitan planning organization (MPO) by the federal government.  MTC administers state-provided money through the Transportation Development Act (TDA) and has decision-making authority over the State Transportation Improvement Program (STIP). MTC administers federal funding through various grant programs, including the Transportation for Livable Communities (TLC) Program, Low Income Flexible Transportation (LIFT) Program, and Innovative Climate Grants Program. MTC has overseen administration of toll revenue collected on the seven State-owned bridges in the Bay Area through the Bay Area Toll Authority (BATA) since 2005.

MTC has now evolved into an authority over several other agencies, including ABAG, and is responsible for a host of financial, open-space, insurance, land use, green business, energy, water, and hazmat training programs.  The MTC 16-member board is appointed by other agencies across the nine county Bay Area region.  We have no way of holding the members accountable for decisions that affect our county.  Remember the flap last year over the purchase of a $250 million office building using BART fare monies? That’s the new MTC headquarters building in San Francisco, which houses 9 other regional governance authorities we did not elect.  Through a financial ploy, MTC now has authority over ABAG, giving the organization unprecedented power over our lives.

The overall plan (for which you did not vote) for the nine-county region is contained in Plan Bay Area 2013.  The recently updated draft, Plan Bay Area 2040, is now in circulation for comment.  The plan outlines land use for “Primary Development Areas” (think mixed use, high-rise “stack and pack” housing facilities (with insufficient parking) growing up in our downtown areas and along transit lines.  The plan also outlines the designation of “Primary Conservation Areas” where development is not allowed. 

Read Plan Bay Area 2040 and let your local elected officials know what you think. The plan can be viewed at: http://www.planbayarea.org/ Check out more information at the Nine-County Coalition’s web site: http://nine-county-coalition.squarespace.com/ From the NCC web site: “There are times we must make extra efforts to be hear.  The continued proliferation of a phenomenon called "Regionalism" is one such time.  Therefore, a group of ordinary citizens from all political and professional bents and backgrounds formed Nine-County Coalition. The group's objective is a simple one:  present facts about the downsides and dangers of unfettered regionalism." 

The next Nine-County Coalition meeting is June 17, 2017. Call for directions.  

Dan B. Walden

Walden Consulting

walden156@gmail.com

Listen to the Walnut Creek City Council meeting video about the CalPERS Pension exposure for the City of Walnut Creek, including a review of the unfunded liability exposure, presented by staff and an actuary, and the options the actuary presented.  Click here to watch the video.