Doubt of Jail Tax Legality Keeps It Stuck in Capitol

Revenge was on Sen. Marian Bergeson’s mind as she walked out, shellshocked and grim-faced, after a defeat in a committee hearing chaired by Assemblyman Dominic L. Cortese (D-San Jose).

The Newport Beach Republican convened her own Senate Local Government Committee two hours later and killed two of Cortese’s bills by calling for a vote when too few senators were in the room to support the measure. Then, in a rare procedural twist, she persuaded her Senate colleagues to reconsider a Cortese bill approved by her committee just that morning so she could switch her “aye” vote to “no,” personally scuttling that measure too.

The reason for Bergeson’s pique: Cortese put Orange County’s half-cent jail tax bill on hold.

Touted by Orange County officials as their best hope to solve jail overcrowding problems, Bergeson’s bill would allow the county to ask voters in June, 1990, to approve a half-cent-per-dollar sales tax increase aimed at financing construction of new adult and juvenile detention facilities, as well as additional courtrooms.

If approved by voters, the tax increase would produce an extra $121 million a year, crucial seed money for the planned 6,000-bed Gypsum Canyon jail that is projected to cost $700 million.

Sheriff Brad Gates said he figures the proposed sales tax hike would cost the average Orange County family $50 to $75 a year. That, Gates contends, is a small price to pay to keep an estimated 50,000 criminals a year from being prematurely released to Orange County streets.

But those kinds of gut-level arguments have failed to impress lawmakers or erase the political and legal questions surrounding the Orange County measure, not the least of which is whether the proposal is legal under Proposition 13, the landmark tax limitation measure passed by Californians in 1978.

A Superior Court judge invalidated a similar jail construction sales tax enacted by San Diego County voters because the county supervisors would control the revenue.

The judge ruled if that county’s supervisors hold the purse strings, such a special tax requires approval of two-thirds of the voters. If a separate agency not controlled by the supervisors was in charge, the tax could be enacted by a simple majority, which is what the San Diego sales tax measure won at the polls.

Despite amendments to the bill to cure any similar flaws in the Orange County sales tax measure, that legal decision was cited as one of the reasons Cortese on Wednesday asked his Assembly Local Government Committee to postpone a vote on the measure for at least a month of study--a delay that angered Bergeson and prompted her retaliatory actions against his bills regarding growth management.

Another problem for the Orange County sales tax measure is timing.

While it is certainly of paramount importance to Orange County residents, it is only one of seven “urgent” sales tax proposals before the state lawmakers this session.

Five of them would ask voters to increase local sales taxes to finance jail construction in Orange, Riverside, Los Angeles, Ventura and Humboldt counties. Bergeson, herself, is carrying the bill for Riverside County.

The two other bills would allow communities around the state to add sales taxes to pay for everything from police services to local improvements such as streets, sewers and schools.

Cortese contends that the spate of sales tax bills is a problem because each measure is written differently. The resulting hodgepodge stands a good chance of being rejected at the last minute by Gov. George Deukmejian, he said.

“I can imagine him saying, ‘Hey guys, give me one bill that makes sense,’ ” Cortese said.

The assemblyman said that to forestall that possibility, he wants his committee staff to see if there is a way to streamline and combine all the measures into one sales tax bill.

Legality In Question

Yet the legality question surrounding the Orange County sales tax measure, as well as its legislative siblings, remains.

Proposition 13 says that before a local government, such as a county board of supervisors, can impose a tax for a special purpose, such as building jails, it first must be approved by a two-thirds majority of the affected voters.

In fact, Orange County officials could take that route without the aid of Bergeson’s bill. The Board of Supervisors could call a bond election to pay for the new jail through an increase in property taxes, said Richard Keefe, the county’s manager for intergovernmental relations. But it is considered very difficult to get a two-thirds majority at the polls, especially for a tax increase.

“I’m not saying they won’t” hold a bond election, Keefe said. “That’s a possible tool for our Board of Supervisors, (but) the reluctance to do that is based upon the dismal record of any kind of (tax) proposal submitted to the electorate by any agency.

“It’s very difficult to get the two-thirds approval,” Keefe said.

Bergeson’s bill would require only a simple majority approval for the sales tax, a distinct advantage for Orange County officials who are gearing up to campaign for the measure locally.

If approved, the money raised by the proposed half-cent-per-dollar sales tax would not go to the county, but to a new government agency called the Orange County Regional Justice Facilities Commission.

Independent of County

Bergeson and her supporters argue that the new agency would be independent of the county because only two of its five board members will be county supervisors, who, therefore, could not control decisions of the committee. (Two other members would be elected officials from Orange County cities, and the fifth would be a public member chosen by the other four.)

As such, they contend, the new body should be treated just like the Orange County Transportation Commission, which by law only needs a majority vote to impose a sales tax increase.

But critics of the plan say that distinction still won’t be enough to stave off a court challenge of the Orange County jail tax proposal.

The new agency’s function is to build jails and courthouses, traditionally the county’s job. While it could theoretically make independent decisions on how to spend the sales tax money, the agency was created primarily to help fund a new county jail and courthouse. And Bergeson’s bill still calls for county supervisors to make a final decision on how and where a detention facility would be built.

“I think they’re going to have a difficult time going to court with a straight face and saying, ‘Yeah, this is a legitimate agency formed with another purpose other than evading Proposition 13,’ ” said Thomas Homann, one of the attorneys who successfully challenged the San Diego jail construction sales tax. “I don’t see them winning.”

No Mention of Commission

Critics also note that when it was introduced on March 9, there was no mention of an independent commission. The bill originally allowed the Orange County supervisors, through a special taxing district, to collect the money as well as spend it.

But after a Riverside Superior Court Judge ruled March 24 that a similar proposal in San Diego County was unconstitutional, Bergeson and attorneys for the county scrambled to rewrite the measure.

The San Diego jail construction tax, approved last year by 50.8% of the voters, funneled the money indirectly to the county through a new agency called the San Diego Regional Justice Facility Financing Agency. But Judge Gordon R. Burkhart ruled that the agency was so closely aligned with the San Diego County Board of Supervisors that it was an “alter ego” of county government.

Burkhart also overturned the San Diego sales tax measure, saying it “purposely circumvented” the two-thirds provision for a special tax under Proposition 13.

“The court finds that the tax here is placed in the . . . 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 wrote.

Bill Amended

On May 12, Orange County supervisors voted to relinquish control of the proposed Gypsum Canyon jail to a new government agency. On July 5, the Bergeson bill was amended with language creating the independent Orange County Regional Justice Facilities Commission.

Critics such as Homann contend that such efforts, coming after the judge’s ruling, could help bolster a charge that the county is trying to do an end-run around Proposition 13 with its sales tax. Even one of the measure’s supporters, who asked not to be identified, admitted privately last week that the move by the county was a “strategic error.”

Yet Bergeson said she intends to continue pushing the sales tax proposal, despite these questions, because it is the “best option” open to Orange County officials, who have been under federal court pressure to relieve overcrowding in jail facilities. She noted, too, that the San Diego case could still be overturned on appeal.

“There has to be action taken,” Bergeson said. “The county is almost at a point of desperation in finding a mechanism . . . to comply with an issue that is a health and safety matter. It’s literally a crisis as a result of releasing prisoners, arrestees, back onto the street.

“I think the fact that they (the county) are willing to go forward right now, even with the San Diego case, highlights the need.”

Gates, who has already organized an informational campaign to persuade voters to pass the sales tax, said emphatically that Orange County’s proposal is not designed to circumvent Proposition 13.

‘Sick and Tired’

“I get sick and tired of people who complain about these kind of things but don’t step forward with a recommendation or a solution to the problem,” Gates said of critics of the sales tax plan.

But in delaying action on the Orange County bill for further study, Cortese said he is trying to make sure the sales tax solution doesn’t create more problems. He predicted that if the Legislature passes the Bergeson bill in its present form, its chance of surviving a court challenge is “almost nil.”

Cortese spoke gingerly when asked if the Orange County plan was an effort to get around the limitations imposed by Proposition 13.

“They (Orange County officials) are not supposed to say that, and I’m not supposed to say that, either. They would obviously be letting the cat out of the bag. If they said it, it would go on record as their motive and it would ruin their whole effort overnight.

“I can’t say it either.”

But maybe with minor modifications over the next month, the sales tax measure’s odds of withstanding a court challenge can be improved. “At least they will be 50-50,” Cortese said.