Vote to Reject Return of Surplus

Voters in Costa Mesa on Tuesday will be the first residents in Orange County to go to the polls to decide whether funds in the city treasury considered surplus under the 1979 Gann initiative should be returned to taxpayers. Costa Mesa residents should do as voters throughout the state have consistently done and reject the return of the so-called surplus money.

Costa Mesa, with strong property values and a commercial gold mine in sales taxes from the successful South Coast Plaza shopping mall, was a sure bet to run afoul of the initiative’s arbitrary limits on government spending based on population growth and inflation. And it has done just that, to the tune of $2.1 million that under Gann must be returned to taxpayers if residents don’t vote to raise the appropriations limit.

The Gann spending limitation is unrealistic and ought to be removed entirely. That, however, is not the issue Tuesday in Costa Mesa. The ballot question deals with how to best live with the initiative and the arbitrary surpluses it creates.

Even the relatively conservative Costa Mesa City Council majority, despite declaring that “the Gann limitation wisely limits government spending,” couldn’t buy the initiative’s illogic.

The council could have just returned the money outright to taxpayers. It didn’t. Instead, faced with revenues that exceeded its annual “appropriations limit” and service needs that still weren’t funded, the council decided to put the issue on the ballot. Then four of the council members wrote a ballot argument urging voters to allow the city to keep the money and spend it on needed street and sidewalk repairs.

According to the city’s plan, half of the surplus will go to maintain streets and the other half to replace damaged curbs, gutters, parkway trees and sidewalks and build new sidewalks, especially walkways along school routes and arterial streets.

The city’s approach makes sense. If the money were returned to taxpayers, most of it would go to the owners of large commercial properties, with some of them getting more than $35,000. The owner of a home appraised at $150,000 would get about a $66 tax reduction. Renters would get nothing. If the city spends the money on streets and sidewalks, the entire community benefits.

Voters in Costa Mesa will no doubt realize the wisdom of voting Yes on Measure C as did residents in more than 200 communities throughout the state that passed similar measures rejecting the tax rebate (only two voted to accept the refund). The election is noteworthy because it’s the first ballot of its kind in Orange County. It’s also the latest example of why the Gann spending limit needs to be repealed, or at least modified, before more needless and costly elections clog up the ballot.