Jarvis Name Retains Clout in New Anti-Tax Campaign

By DAN MORAIN

Oct. 8, 1996 12 AM PT

TIMES STAFF WRITER

SACRAMENTO —

Nearly two decades after Howard Jarvis ignited an anti-tax rebellion with Proposition 13, the political pros who run the organization he founded are taking aim once again at local government’s ability to levy taxes.

Ten years after his death, Jarvis’ “mad as hell” image remains a powerful draw for votes and political money.

And as Jarvis’ proteges campaign for Proposition 218, the eighth “Jarvis” initiative including the big one in 1978, they are finding the gadfly’s name still sends shudders through city halls and county courthouses throughout California.

“It doesn’t handcuff us. It encases us in a block of cement and throws us in the lake,” Daniel Wall, lobbyist for the California State Assn. of Counties, said about local governments’ new nemesis: Proposition 218.

Where Proposition 13 homed in on property taxes, Proposition 218 targets virtually all local levies: general taxes such as those on hotel occupancy and business licenses, fees for services such as street sweeping, and special property assessments for libraries, landscaping, police and fire suppression.

In general, Proposition 218 seeks to ensure that no local tax can be imposed or raised without a majority vote, hence the title, the Right to Vote on Taxes Act. Not only would Proposition 218 require a vote on general tax increases, it also would require a vote on taxes already imposed in several cities and counties.

“It’s putting power into the hands of the people,” said Joel Fox, the 47-year-old president of the Jarvis group. “Taxation is the essence of government. Control of taxation is control of government, and I believe we the people should control government.”

In Los Angeles County, hotel occupancy taxes and business license taxes imposed last October would have to go to a countywide vote, according to David Janssen, the county’s chief administrative officer. The two taxes raise $6 million a year. Other levies bringing in more than $60 million also could be repealed or challenged, according to a county analysis.

Orange County has not performed a similar analysis. But several cities in that county would be affected by the measure. More than a dozen Orange County cities have turned to hotel and utility user taxes to balance their budgets. Some would have to be put to a new vote.

“I don’t think the public is always aware of how difficult it is for government to raise the funds we need to provide services,” said Seal Beach Councilwoman Marilyn Bruce Hastings. “I think this would make it more difficult to levy those fees we need.”

In Ventura County, supervisors are contemplating a special assessment to support the county library system. That assessment would not be permitted under Proposition 218. Ventura County also has a business license tax that would have to be put to a vote under the measure.

“It would tie the hands of government too much,” Ventura County Supervisor John Flynn said. “It’s too strong of a proposition. People are going to have to learn to put some faith and trust in elected officials.”

Proposition 218 deals with complexities of local government finance. Add to that a ballot filled with 15 measures, and it is little wonder that Proposition 218 is receiving little attention.

But local officials leading the No on 218 campaign say budgets in some cities and counties could be devastated by Proposition 218.

“It essentially closes whatever options have been left to local government,” Los Angeles County Supervisor Zev Yaroslavsky said. “What’s at stake is fire suppression, libraries and, in some communities, parks.”

The opposition campaign, run by the consulting firm of Nelson & Lucas Communications, includes many teachers unions, public employee unions, trade associations representing fire and police chiefs, and firms that underwrite municipal bonds.

Because of loopholes in campaign finance reporting laws, the No on 218 group has yet to report how much money it has raised. Its first report is to be available later this week.

The Yes on Proposition 218 campaign, run by the Jarvis organization, raised $1.1 million in the first half of the year, with nearly $800,000 coming in checks of less than $100. The remainder came from the Howard Jarvis Taxpayers’ Assn., a nonprofit group headed by Fox.

The nonprofit group receives the bulk of its money from small donors, most of whom are over 65 and backed Proposition 13. The California Republican Party and most Republican state legislators have endorsed Proposition 218.

The initiative’s goal is to limit local taxes. Its main target is a specific tax called special assessments.

The proposition would significantly change the way the tax is imposed, prohibiting government from paying for some services by assessments and making other assessments more difficult to impose.

In the wake of Proposition 13 in 1978, California’s cities and counties have turned to these special assessments to pay for a wide variety of public services, such as libraries, landscaping, fire suppression and extra police.

In 1993, the most recent year for which statistics are available, local government raised at least $300 million from assessment districts, up from $28 million in 1978.

Local officials say they have created even more assessment districts since 1993, the year Gov. Pete Wilson and the Legislature began shifting $3 billion a year in property tax revenues from counties to schools.

Proposition 218, a state constitutional amendment, would make it more difficult for local government to impose assessments, would require new votes on some assessments that already are in place, and prohibit assessments for general services such as police and libraries.

Assessments that would probably be illegal under Proposition 218 include a $9-million annual levy on property owners for Los Angeles County libraries, and a $1.4-million special tax for extra police in Inglewood.

If Proposition 218 is approved, Los Angeles County officials believe they would have to have a vote on the $59-million annual assessment for fire suppression paid for by an annual average assessment of $55 per home in the county.

Under current law, cities, counties and other local taxing entities impose assessments after first determining which property owners would benefit from the service to be provided, then mailing notices to landowners offering them an opportunity to protest. Property owners who do not vote--and officials say most don’t--are counted as “yes” votes.

Under Proposition 218, however, only votes cast would be counted.

Opponents say the change would essentially prevent them from imposing assessments, because most landowners who take the time to fill out the ballots are tax opponents. Proponents respond by saying the change would force local officials to work harder at convincing the public that the assessment is necessary.

“We do not outlaw assessment districts. We simply say they must be approved by voters in advance,” said Jonathan Coupal, attorney for the Howard Jarvis Taxpayers Assn., and the main author of the measure.

Proposition 218 would amend the state Constitution to say that only landowners would have the right to vote on special assessments. The voting would be weighted, based on how much a landowner would have to pay in the new assessment district. If a large landowner would pay twice as much as a smaller landowner, the large landowner’s vote would be worth twice as much.

Additionally, property owners would not have to live in the district to vote. They would get the right--even if they are foreign corporations or non-U.S. citizens who reside in other countries.

“I’m not a foreigner-basher,” said Supervisor Yaroslavsky, “but you’re going to tell me that somebody sitting in London or Melbourne or Tokyo is going to decide whether there is [enough money in an assessment district to fight] an uncontrollable wildfire in the Santa Monica Mountains? I don’t think that’s what the California electorate wants.”

Proposition 218 supporters call such arguments a smoke screen. “We’re really being attacked unfairly on this,” Fox said.

He points out that current law already says only landowners have the right to protest most special assessments, and that the law already permits corporations and noncitizens to file protests if they own land in the district.

However, Proposition 218 would place the weighted voting system in the state Constitution, making it impossible to change without a constitutional amendment.

Additionally, some specific assessment statutes, such as a frequently used 1982 act permitting assessment levies for streets, provide for a vote of registered voters, not landowners.

Under Proposition 218, only landowners would have the right to agree to assessments for street construction or repair.

Assessments have been part of California law since 1911. They are traditionally used for local services such as mosquito abatement, flood control, and sewer and water projects, which directly benefit property owners. Fox says assessments never were meant to pay for general services like police, ambulances or libraries.

But as local governments try to raise money, Fox says, there have been abuses. In the city of Orland north of Sacramento, officials imposed a park assessment and charged the same fee to property owners who lived more than 20 miles from city parks as was charged to property owners who lived across the street.

The state Supreme Court affirmed that formula in 1993, prompting lawyers at the Los Angeles firm of O’Melveny & Myers, who represent local government, to issue an analysis proclaiming, “The Supreme Court seems to be encouraging experimentation in the use of assessments.”

Fox cites other examples, like the Los Angeles Community College District’s proposed $12 fee on district landowners for various projects, including an equestrian center. The college district sought to charge the same amount to all residents, no matter how far they live from a campus. After protests, the college board placed the fee on the ballot.

“If 218 loses,” Fox said, “these kinds of fees are going to appear everywhere.”

Times staff writer Carlos V. Lozano in Ventura and correspondent Shelby Grad in Orange County contributed to this story.

(BEGIN TEXT OF INFOBOX / INFOGRAPHIC)

Proposition 218 at a Glance

This is a constitutional amendment proposed by the Howard Jarvis Taxpayers Assn. to limit local taxes.

WHAT IT DOES

* Limits ability of local governments to raise or impose various general taxes, fees and special property assessments.

* Requires majority vote of the electorate for general tax increase.

* Eliminates some special assessments for libraries and police.

* Gives voters the right to repeal any local tax by referendum or initiative.

****

ARGUMENTS IN FAVOR