Judge Overturns S.D. Tax for Jails : Ruling on Prop. A Deals Severe Blow to County’s Plans to Solve Crowding

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

Ruling that county officials “purposely circumvented” Proposition 13’s requirement of a two-thirds vote for approval of new taxes, Riverside County Judge Gordon Burkhart accepted opponents’ arguments that San Diego voters’ 50.6% support for the sales tax was insufficient for its adoption. Accordingly, Burkhart--who heard the case in Riverside because of San Diego judges’ conflict of interest on a matter affecting future courtroom space--ruled the Proposition A election invalid.

That decision not only will exacerbate, at least temporarily, San Diego’s longstanding problems of jail crowding and a badly overextended court system, but also has statewide importance.

Other Counties Watching

If upheld on appeal, Burkhart’s ruling could pose problems for other counties that were closely watching the San Diego case for guidance on meeting criminal justice and other needs. Legal ratification of Proposition A, lawyers on both sides of the case agree, would make it easier to fatten civic treasuries by eliminating the need for the formidable two-thirds margin for new taxes mandated by Proposition 13, the landmark property-tax cutting initiative approved by statewide voters in 1978.

“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 a jubilant Thomas Homann, one of seven defense attorneys who filed the lawsuit on behalf of two Libertarian Party members and a leader of the 100-member United Taxpayers of San Diego. “It’s gratifying that the judge saw Proposition A for what it was: a ruse to circumvent Proposition 13.”

“The ruling . . . points out that the Board of Supervisors is not above the law,” added Louis Katz, one of Homann’s colleagues. “We have not solved the jail crisis. But breaking the law to lock up supposed lawbreakers is not the answer.”

Shocked county leaders, distressed over the prospect of losing in court what they won at the polls, glumly sought to minimize their disappointment by describing Thursday’s decision as simply the first round in a legal battle expected to reach the California Supreme Court.

“I’m very disappointed, but this isn’t the end of the world, either,” Supervisor George Bailey said. “It was a foregone conclusion that whoever lost the first round would appeal to the second, and the loser there would appeal to the Supreme Court in the third round. I naturally would have preferred to win the first round, but we still think we’re going to prevail.”

Board of Supervisors Chairman Susan Golding added: “The citizens of San Diego have lost the first round. My feelings go beyond disappointment to unadulterated concern for what’s going to happen to public safety in this county if this decision isn’t reversed. The results could be disastrous.”

With an appeal before the 4th District Court of Appeal expected to take as long as one year, one of the key questions left unanswered Thursday is whether collection of the tax must be halted in the interim. Although Burkhart ruled Proposition A invalid, his five-page order apparently leaves execution of that judgment in the hands of local officials.

Rhetorically asking, “How can you collect a tax that a court says is illegal?” Homann argued that the tax should be immediately rescinded when Burkhart signs a final order in the case, probably in about one week.

Still More Delays

Several county officials, however, said they plan to continue collecting revenue from the half-cent sales tax pending the appellate decisions. Siding with that approach, state Board of Equalization member Ernest Dronenburg Jr. explained that his agency traditionally “waits to hear from the court of final jurisdiction . . . before undoing a tax.”

If upheld, Thursday’s ruling would force county officials to confront another complicated and politically sensitive fiscal question: how to equitably refund the estimated $21 million collected during the past 2 1/2 months. None of that money, now held by the Board of Equalization but soon to be forwarded to the county, has been spent.

Although professing confidence that they will eventually win the case, county officials concede that the lawsuit already has delayed some jail-building plans and put administrative planning by the body set up to oversee the sales-tax funds far behind schedule.

Were it not for the lawsuit, the San Diego County Regional Justice Facility Financing Agency, the seven-member board that administers the funds generated by Proposition A, could have secured a tax-anticipation loan last summer to begin hiring staff and proceed with certain projects, according to Rich Robinson, head of the county’s special projects office.

The uncertainty posed by the lawsuit, however, left the agency, as Sheriff John Duffy put it recently, “stuck at square one” with its budget and plans on hold, as well as derailed a plan to expedite construction of nearly 1,000 beds at the county’s planned East Otay Mesa jail, scheduled to be completed in late 1990.

With crowding in jails and courts worsening, Thursday’s decision was all the more frustrating to county officials who realized that it means, at best, more delays in solving that thorny problem.

As of Monday, the inmate population in the county’s jails totaled 4,054--222% of the official 1,827-bed capacity. A serious backlog in criminal cases, meanwhile, recently prompted Superior Court Judge Michael Greer to postpone all new civil trials for several weeks and led the Board of Supervisors to approve the construction of five temporary courtrooms in a 77-year-old downtown hotel.

‘Explosive Situation’

“What this means is that some judges perhaps can anticipate spending their entire judicial career in the Hotel San Diego,” said Presiding Municipal Court Judge E. Mac Amos, lacing his disappointment with bittersweet humor.

Predicting that Thursday’s decision “means that our problems are going to get worse before they get better,” Sheriff’s Department spokesman Lt. Alan Fulmer exhibited similar gallows humor, noting that the ruling came only two days after a Grand Jury report sharply criticized the sheriff’s operation of the jails and confirmed that inmates were frequently beaten by deputies.

“This has not exactly been a great week for the Sheriff’s Department--or, as far as this (ruling) is concerned, for the general public, either,” Fulmer said.

Describing himself as “more disgusted about what this means for the jails” than over delays in courthouse expansion, Greer expressed concern that postponing jail construction could worsen the “already explosive situation” detailed in the Grand Jury report.

“People are being hurt, and I hate to think that more may be hurt before this gets solved,” Greer said.

In the lawsuit that spawned Thursday’s decision, Katz, 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 both the spirit and letter of Proposition 13.

Under the 1987 law, the revenues generated by Proposition A--estimated at $1.6 billion over its 10-year life--were to be administered by the Regional Justice Facility Financing Agency. The funds, in turn, would be spent in accord with plans developed and approved by the county Board of Supervisors.

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. County and state legislators sought that “back-door method” for approval of Proposition A, Katz added, after a similar five-year, half-cent sales tax for jails on the November, 1986, ballot failed when it drew a narrow 50.7% majority, far short of the then-required two-thirds margin.

But Katz argued that Proposition A still should have been subject to the two-thirds requirement because the seven-member agency “is not an independent governmental entity,” but rather is “merely an agency and alter ego . . . of the Board of Supervisors”--which can levy property taxes.

In response, County Counsel Lloyd Harmon and the Financing Agency’s attorney, Lynn McDougal, contended that proceeds from the half-cent sales tax would finance “general governmental purposes” administered by the agency, a critical semantic distinction that would exempt it from the two-thirds requirement. In addition, county leaders emphasized that the state legislation that set up the Financing Agency specifically authorized a majority vote.

Burkhart, however, wrote in his decision that the agency “was founded solely for the purpose of avoiding the strictures of Proposition 13.”

‘Disservice to Public’

“The court finds that the tax here is placed in the agency’s treasury and was not to be spent for any general purpose the county wishes, but rather must be spent for the special purposes of constructing and operating justice facilities,” Burkhart said in his ruling. As a “special tax,” the half-cent sales tax therefore required a two-thirds vote under the guidelines established by Proposition 13, the judge added.

“We couldn’t have said it better ourselves,” said Libertarian Dick Rider, one of the plaintiffs. “The county tried to wink at Proposition 13 and play games here. And this judge said, ‘You can’t do that.’ We’ve done the taxpayers a big favor.”

Golding, however, characterized the lawsuit as “a real disservice to the public,” and suggested that the appeal of Thursday’s decision might create an opportunity to pose what she called “the very necessary challenge” of the controversial two-thirds vote requirement.

“What is extraordinary in this case is that people in San Diego County were willing to tax themselves again, but a legal roadblock is preventing that from happening,” Golding said. “At some point, when a majority of citizens isn’t allowed to make a decision, we’re going to have trouble functioning as a government. Government was built on majority rule and maybe this appeal will be a chance to get back to that principal.”