Stalwart Supporter Says Prop. 13 Didn’t Cause Budget Problems

As the recession lingers in Southern California, politicians are blaming Proposition 13 for government’s fiscal woes, and business leaders are complaining that special interest groups are slowing down development in Los Angeles. Both claims irk Richard Close, president of the Sherman Oaks Homeowners Assn. and one of the San Fernando Valley residents crucial to the passage of Proposition 13, the 1978 initiative that restricted government taxing authority. He talked to Times staff writer Aaron Curtiss.

Question: Many people have remarked that this year’s budget crises at the state, county and city levels is the result of Proposition 13. Why or why not is that true?

Answer: We can’t blame Proposition 13 for the economic problems in Los Angeles. Perhaps we should blame Washington, but not Proposition 13.

Q. Why?

A. During the 1978 campaign for Proposition 13, all the elected officials said that if Proposition 13 passed, local government would instantly collapse. It didn’t happen. Now, because of the slow economy, elected officials can’t blame Proposition 13 because revenue has not increased. Elected officials need to live within their budgets. They have to cut expenses. They have to defer capital improvements. They have to reduce spending until the economy improves and the revenue increases.

Q. But in order to turn the economy around, you need to make public improvements regularly. You need to have the sorts of services that make an area desirable. Don’t you have to spend money to make money?

A. The cities and counties do not need to spend money to get money. They have to prioritize spending. There may have to be layoffs at the county and local governments, just like there have been layoffs throughout the private sector in Los Angeles County. Government cannot be immune from the economic downturn we are now suffering. It’s unfortunate that spending must be cut and there must be a reduction in programs.

Q. But it has to be done?

A. It has to be done. Companies are cutting back their labor force. They are reacting to reduced sales and reduced profits. Government cannot spend its way through the recession.

Q. But isn’t that the exact time government should be spending money? When the economy is booming, fewer people need many of the services government offers such as health care or general relief.

A. The city and county cannot act as a spark plug to revitalize the local economy. The city and county must reduce spending because they are receiving reduced revenue. Proposition 13 was passed specifically to make it difficult for government to increase taxes. That is the worst way to react to a recession. Proposition 13 does have a safety valve. If two-thirds of the voters want to increase taxes, then taxes will be increased. But the burden is on government to convince two-thirds of the public to vote for the tax increase.

Q. A lot has been said about the two-thirds requirement. There have been instances where a measure will get 64% of the vote and not pass. Do you think that threshold is too high?

A. I signed the ballot measure for Proposition M and Proposition N on the November ballot and Proposition 1 on the April ballot, all of which were to increase the size of the police force by increasing taxes. I supported it. However, two-thirds of the voters did not. Howard Jarvis made it difficult for taxes to be increased and rightfully so. I was disappointed that the tax for more police officers did not pass, but that is part of the system and I accept it.

Q. You said that cities and counties cannot act as spark plugs for the economy. How should the economy be turned around?

A. Revitalization of the economy is going to be based on encouraging new businesses to locate in Los Angeles. Increasing taxes will not accomplish that goal. The federal government is the governmental body that is supposed to control the economy. That is why when President Bush did not deal effectively with the economy, he was voted out of office. We look to Washington and, to a lesser extent, we look to Sacramento to deal with the economy. Local government is in business of providing public safety and certain social programs. It is not in the business of trying to jump start the economy.

Q. To shift gears, as the economy slows, what role does a homeowners association play in getting things back on track?

A. The local homeowners associations can facilitate development that will be beneficial to the local economy. A combination of support of a project by a local homeowners association and local business groups can greatly facilitate City Hall approvals. It’s incumbent on business and homeowners groups in this type of economy to try to facilitate good projects. However, the need for jobs cannot be an excuse to obtain approval for a bad project.

Q. When you refer to the local economy, how local are we talking? The city is divided into 15 City Council districts and council members rarely look beyond the borders of their own district. A tire plant may create 2,000 jobs, but who wants a tire plant down the street from them?

A. Sherman Oaks is maybe not a good example since we don’t have any factories. In areas that are zoned for commercial or industrial usage, most projects for new businesses require approvals from City Halls. Homeowners associations can help get those approvals if it is believed that the project will be good for the local community. Still, the developer or the company needs to convince local residents that a project is good for the local community and not merely that it will create 100 new jobs, for instance.

Q. What would make something good for a community?

A. Its use has to be compatible. An auto body repair shop in the middle of a residential neighborhood is just not appropriate. But in an industrial zone, it is appropriate. It has to be a project that will not create a nuisance to nearby residents or nearby businesses. It has to be compatible with the community.

I’ve been involved in community matters for 18 years. This recession is quite different than, for instance, the recession of the early 1980s. At that time, there were developers who tried to use the job slogan as a method to get approval for a project whether or not was compatible with the area. This time it’s different because many of the developers are out of business so there is nothing to develop. And there are not financial institutions that are financing development when there already is an over-supply of vacant properties. This recession is different in that it will have a more lasting effect on the local communities.

I remember in the early 1980s, a lot of battles where City Hall would vote for a project, realizing it was not compatible, but they wanted to create jobs and that was the overriding consideration. That’s not happening in the current recession because there is so little being built at all.

Q. The traditional notion of homeowners groups is that they are naysayers. But you are saying they can be facilitators?

A. Correct. With the right project, the homeowners associations can make approval very easy.