California Elections : Prop. 62--Jarvis’ Last Ballot Attempt to Put a Cap on Local Taxes

Fittingly, the last hurrah of tax crusader Howard Jarvis turned out to be squarely in the Jarvis spirit--a people’s initiative to make it harder for local governments to raise taxes.

In the months before he died last August, Jarvis drew up Proposition 62, saw to it that it qualified for the November ballot and then campaigned for its passage. He said it was needed to plug a gaping hole driven into his landmark property tax-cutting Proposition 13 by the California Supreme Court.

Specifically, the measure would require a two-thirds vote of a local governing body, such as a city council, and a majority popular vote before new or increased general taxes could be imposed.

General tax funds, which are placed into city general funds, typically include such levies as business, hotel or utility user taxes--but not sales or property taxes, which are controlled at the state level.

“The Supreme Court took away that part of Proposition 13 that allowed the people to vote on their local taxes,” said Joel Fox, president of Jarvis’ California Tax Reduction Movement and the measure’s campaign director.

“The court put a hole in it. What we’re doing with Proposition 62 is giving the people back that right. We’re making Proposition 13 whole again.”

The charges against Proposition 62 are reminiscent of the anti-Proposition 13 arguments eight years ago: Without the flexibility to raise or impose taxes, local government will have to compromise public services, such as police and fire protection.

“If we tie the hands of our local elected officials in providing needed funding to support these critical services, they will have to look to Sacramento for help,” said Keith Comrie, Los Angeles’ chief administrative officer, in opposing the measure.

“It puts extra pressure on the limited fiscal pie,” said Roy Ulrich, a Santa Monica public interest lawyer who heads the coalition, Californians Against Proposition 62. “It’s a city-bashing type of activity.”

Among those who counter this view is the California Taxpayers Assn. (Cal-Tax), a nonpartisan, nonprofit Sacramento-based group that opposed Proposition 13 in 1978 but favors passage of Proposition 62.

“We see nothing wrong with consulting the voters on a simple majority basis with regard to major local tax increases,” said Richard P. Simpson, Cal-Tax’s executive vice president. Proposition 13, a constitutional amendment overwhelmingly approved by the voters in 1978, not only put a lid on property taxes, but also declared that any new “special taxes” sought by local government would have to be approved by a two-thirds vote of the people.

In 1982, the state Supreme Court, ruling on San Francisco’s business license tax, said that because the business levy was earmarked for the city’s general fund, it didn’t come under Proposition 13’s special tax restriction and therefore didn’t need a popular vote.

Since that court decision, 117 cities--by majority votes of city councils--have imposed new taxes or increased existing taxes on 156 different occasions, according to a Cal-Tax survey.

Another Proposition 62 wrinkle that could complicate local financing says that any new or higher general taxes enacted by local government after July 31, 1985, can only continue to be collected until Nov. 5, 1988. After that, a vote of the people would be required for the tax increase to remain in effect.

Cities that blatantly violate Proposition 62 by not allowing popular votes on general tax increases would be penalized by the state through withheld property tax revenues.

Besides Cal-Tax, Proposition 62’s supporters include Gov. George Deukmejian, the California Chamber of Commerce, the California Manufacturers Assn. and the California Farm Bureau.

Opponents include Los Angeles Mayor Tom Bradley, a number of public employee and teacher groups, the League of Women Voters, Common Cause and the California League of Cities.

A major setback for Proposition 62 backers was the state legislative analyst’s interpretation of the measure’s legal standing. According to the analysis in the California Ballot Pamphlet mailed to voters, the measure would apply only to the state’s less populated general-law cities and not to the bigger charter cities.

The reason, said the analysis, was that Proposition 62 qualified for the ballot with the signatures of at least 393,835 registered voters--enough to make it a statute if it passes--but not the 630,136 signatures needed to make it a constitutional amendment, if approved.

“Because this is not an amendment to the (state) Constitution, it does not affect charter cities,” concluded Peter Schaafsma, who specializes in tax and revenue issues for the legislative analyst in Sacramento.

Schaafsma’s conclusion is more than esoteric. It has become a campaign issue.

Of California’s 444 cities, 82 have their own charters, along with a combined population of almost 12 million. These cities can pass laws regulating their own municipal affairs, free of state legislative control. Included in the charter city category are Los Angeles, Pasadena, Anaheim, San Diego, San Francisco, San Jose and Sacramento.

General-law cities, with a little less than 9 million population, or about a third of the state’s population, are unable to pass ordinances if they conflict with state laws. Southland general-law cities include Thousand Oaks, Beverly Hills, West Hollywood, Costa Mesa and Laguna Beach.

Cal-Tax’s Simpson conceded that “the legislative analyst is right,” and that California’s most populous cities would be exempt from the measure’s popular vote requirement on tax proposals. Should Proposition 62 pass, Simpson said, it would take either a court case or the Legislature to extend the measure to all of California’s 444 cities.

Proposition 62 campaign chief Fox said this interpretation is wrong and that all cities--general-law or charter--are covered by the ballot measure. Indeed, Fox said, the top of the statute declares that “‘local government’ means any . . . city . . . including a chartered city. . . .”

Against some of the more controversial and more highly publicized measures on the November ballot, Proposition 62 apparently has not fared well in capturing public attention.

A California Poll released last Aug. 19, and the only survey thus far taken on the measure, showed that only 8% of voters polled had heard of it. That level of interest could spell trouble for proponents if it continues, since voters usually cast ballots against measures with which they’re not familiar.

The voter recognition level could change soon, however, since Jarvis forces are fairly well financed, while the opposition has virtually no campaign cash.

Proposition 62 campaigner Fox said that about a quarter of a million dollars is in the campaign till. This will allow the proponents to buy radio commercials in major markets throughout the state, with the first air date Monday, he said. Two commercials, a one-minute and a five-minute spot, the latter featuring unsuccessful U.S. Senate candidate and conservative economist Arthur Laffer, were packaged by political consultant Stewart Mollrich.

Generating campaign cash for Proposition 62 have been three mailings sent out by William Butcher and Arnold Forde, the Newport Beach consultants who have raised funds for past Jarvis initiatives.

The Butcher-Forde mailings, each targeted for 325,000 California voters, carry a picture of Jarvis, who died last Aug. 12 at the age of 83. The mailers, one of them with a black border, make a point of telling voters that Jarvis “spent the last year of his life working to place Proposition 62 on the November ballot. And with your generous support, his work will not have been in vain!”

If the mailers are designed to play on voters’ sympathy with references to the late Jarvis’ “last crusade,” opponent Ulrich doesn’t think much of the gambit.

“Howard’s death is a non-factor,” Ulrich said.