San Diego Sales Tax Initiative to Pay for Jails Is Struck Down

In a decision that could have far-reaching implications, a Superior Court judge Thursday struck down a half-cent sales tax narrowly approved by San Diego County voters last June to raise $1.6 billion for new jails and courts on the grounds that the measure violated Proposition 13.

Ruling that county officials “purposely circumvented” Proposition 13’s requirement of a two-thirds vote for approval of new taxes, the judge accepted opponents’ arguments that support by 50.6% of the voters for the sales tax was insufficient for it to be adopted. Accordingly, Riverside County Superior Court Judge Gordon Burkhart ruled the Proposition A election invalid.

That decision not only will exacerbate, at least temporarily, San Diego’s longstanding problems of jail overcrowding and a badly overextended court system, it also could, if it is upheld on appeal, pose problems for other counties.

Other counties were closely watching the San Diego case for guidance on meeting criminal justice and other needs.

Orange County officials said the ruling could deal a major blow to plans to relieve jail overcrowding. A half-cent sales tax was being considered for the ballot next year to finance jail needs for the next 20 years.

“If you need a two-thirds majority . . . we have to start rethinking the whole process,” Board of Supervisors Chairman Thomas F. Riley said Thursday. “I would be very surprised if we could get a two-thirds vote on almost anything. The history of this great county is that they are very conservative on these kinds of things, despite its being a law-and-order county.”

Associate County Administrative Officer John Sibley said the decision in the San Diego case is “a surprise right now, and we’ll have to evaluate it.”

“I would say the sales tax is our leading option for the financing of criminal justice facilities. If that option is eliminated, we’ll have to seek other alternatives.”

County transportation officials are also considering placing another half-cent sales-tax referendum--possibly for a ballot next year--to finance new roads in the county.

In both cases, county officials had figured that such a tax could be ratified by a majority of voters. Political experts say Orange County is notorious for voting against tax increases, and they therefore question whether it would be possible to get support from two-thirds of the electorate on a tax increase.

Orange County voters in 1984 overwhelmingly turned down a 1-cent sales tax increase that would have paid for road improvements.

However, Stanley Oftelie, director of the Orange County Transportation Commission, said Thursday that a sales tax for road improvements should not be affected by the judge’s decision because that matter has already survived a court test. Oftelie said 11 counties, including San Diego, have implemented sales taxes for road improvements with a majority vote.

“I feel pretty comfortable that we’re on strong legal grounds,” Oftelie said. The transportation tax “was designed to meet all of those judicial concerns.”

With the latest tax-increase proposal, Orange County officials hope $3.1 billion will be generated over the next 20 years to help pay for widening the Santa Ana Freeway, building rail lines, adding car-pool lanes and eliminating bottlenecks on so-called “super streets.”

With proceeds from the criminal justice tax, the county had planned to build a $250-million courthouse in Santa Ana and a $700-million jail in Gypsum Canyon near Anaheim. The sales tax would also have been used to pay the estimated $90 million a year it would cost to operate the new jail.

Part of the appeal for the sales-tax mechanism was that county officials believed it would only require a majority vote. Besides, unlike other financing methods, it would also draw money from people outside the county, thereby easing the burden on residents.

Another option the county is considering to pay for criminal justice need would be to assign a supplemental tax to residents, possibly attached to property values. That, too, would require approval from two-thirds of the electorate.

The lawsuit that spawned Thursday’s decision was heard in Riverside County Superior Court last December, that site being chosen because of the obvious conflict of interest for San Diego judges on a matter affecting courtroom space.

“It’s tough to win a case against the government or to overturn an election, but we always felt we had the facts and the law on our side,” said Thomas Homann, one of seven lawyers who filed the lawsuit on behalf of two Libertarian Party members and a leader of the 100-member United Taxpayers of San Diego.

County leaders sought to minimize their disappointment by describing Thursday’s decision as simply the first round in a legal battle expected ultimately to reach the California Supreme Court.

In the suit, attorneys Louis Katz and Homann and their five colleagues described the 1987 state legislation that set the stage for last June’s Proposition A campaign as a “sham” that illegally circumvented Proposition 13.

The 1987 law set up the Regional Justice Facility Financing Agency to administer revenues generated by Proposition A--estimated at $1.6 billion over its 10-year life.

The primary purpose behind the creation of the agency, Katz argued, was to “exploit loopholes” in Proposition 13 created by California Supreme Court rulings exempting local agencies not authorized to levy property taxes from the two-thirds vote requirement.

Because the financing agency was not empowered to levy a property tax, officials reasoned that a simple majority vote would be sufficient for approval of a sales tax measure to support the agency’s work.

Staff writer Dave Lesher in Orange County contributed to this story.