Cities Brace for Tighter Budgets After Prop. 218

In their lopsided approval of Proposition 218, California voters gave the go-ahead to the most significant tax-cutting initiative in a decade, prompting local officials statewide Wednesday to warn that services from libraries to police could be cut.

In Los Angeles, City Councilwoman Jackie Goldberg called for the city to file a lawsuit to have the initiative, which restricts the ability of local governments to increase or impose general taxes, declared unconstitutional. The League of California Cities announced that an emergency meeting would be held this month to sort out the proposition’s implications.

The measure won by almost 13%, a margin that surprised even its promoters, the Howard Jarvis Taxpayers Assn.

Proposition 218 targets all local levies--general taxes such as those imposed on hotel occupancy, fees for services such as street sweeping, and special property assessments for libraries, police and fire suppression. It requires a majority of voters to approve new taxes and those imposed since January 1995. The votes must be taken by November 1998.

The legislative analyst’s office has estimated that it would cost local government $100 million a year. But local officials believe that the figure may be more than $300 million.

“Do people have a secret wish that they don’t want government to work? I don’t know,” said Daniel Wall, lobbyist for the California State Assn. of Counties.

On Wednesday, cities from La Palma to Palmdale to Inglewood confronted the prospect of holes in their budgets, as they noted its provision that could invalidate some taxes now on the books.

In La Palma, $500,000 raised annually by a special lighting and landscaping assessment would have to be put to a vote. That’s “a pretty big chunk when you consider our budget is only $5 million,” City Manager Daniel E. Keen said.

Lest the California electorate be viewed as predictable about taxes, voters also approved several local spending measures designed to improve parks and schools, and, in the case of Moreno Valley, help keep the city afloat.

And while voters rejected a $700-million statewide bond measure to build local jails and facilities for juvenile delinquents, they did approve Proposition 204, which calls for spending $995 million on a major restoration of the Sacramento-San Joaquin River Delta, the source of drinking water for two-thirds of California and a recreational area cherished by Northern Californians.

At first blush, the results may seem contradictory and confusing. But at least some local officials, as well as the anti-tax promoters of Proposition 218, saw some logic. In fact, the message may be rather simple.

“Taxpayers do vote for taxes,” said Joel Fox, president of the Howard Jarvis Taxpayers Assn. “In Los Angeles, they passed the [$319-million] park bond. What they’re saying is they want to take part in these decisions. Sometimes they say yes, and sometimes they say no.”

Jarvis died in 1988. But Proposition 218 was the eighth initiative promoted by his organization, which dates back to 1978’s property-tax-slashing initiative known as Proposition 13. Proposition 218 was the group’s fourth measure to win approval.

“It’s not in the Proposition 13 class. But it’s the next level,” Fox said.

Fox named the latest initiative the “Right to Vote on Taxes Act,” a catchy title for a measure that deals with a mind-numbing subject.

In one of its most controversial provisions, the measure says only property owners have a right to vote on certain assessments. Under a so-called weighted voting provision, owners of large properties would cast more votes than owners of smaller properties. Renters could not vote.

Councilwoman Goldberg cited the property ownership provision in calling the measure unconstitutional.

“Congress long ago eliminated all property restrictions to voting,” Goldberg said. “I don’t think by a little vote in California you can say, ‘We want to go back to 1789 and say only the landed gentry vote.’ ”

One of the measure’s targets is special assessments, a tax levied on property owners to pay for specific services such as libraries, landscaping, police and fire. Supporters believe assessments for services that are generally available, such as libraries and police, are illegal under the measure.

As a result, a Los Angeles County analysis says, the county’s $9-million-a-year levy for libraries could be in jeopardy. Inglewood’s $1.4-million annual special tax for police also is threatened.

In the city of Los Angeles, officials say a business tax surcharge that generates about $10 million a year must go before voters for approval by 1998.

“It’s going to make our programs come to a grinding halt,” said Councilman Richard Alatorre, who chairs the city’s Budget and Finance Committee. “It’s easy to say people are tired of taxes. But I don’t think they understand the profound impact it’s going to have on local government.”

Even as city officials worried about the impact of Proposition 218, voters in several locales approved spending measures.

Contrary to Proposition 218, voters in Los Angeles County approved a $319-million park bond. In the city of Los Angeles, Measure K, allotting $776 million to improve facilities and programs in city parks, was leading narrowly, with some votes yet to be counted.

In Moreno Valley, voters approved a 6% utility users tax. Had the measure not passed, officials said, there could have been tremendous cutbacks in services.

“If voters are convinced of the need, and we had a legitimate case to make . . . then these local measures can pass,” Moreno Valley Mayor Denise Lanning said.

Voters in Culver City overwhelmingly approved a $40-million school bond designed to repair facilities. More than 80% of Culver City voters approved Measure T, which will increase the average homeowner’s property tax bill about $40 a year. Whittier voters approved an annual $22.50-per-parcel assessment for schools, and San Marino and Rancho Palos Verdes approved utilities taxes.

But several other measures failed, despite receiving more than 50% of the vote. They did not garner the necessary two-thirds approval required under past Jarvis-inspired initiatives. Voters refused to give the needed two-thirds majority to tax and bond measures for public safety agencies in Long Beach and Santa Monica, and for a library tax in San Diego County.

“We all know it’s tough to get 66 2/3%,” said Long Beach City Manager James C. Henkla, where a failed $30-million bond measure to upgrade the 911 system received 57% of the vote.

Statewide, voters also rejected the $700-million jail bond, by 41% to 59%. Political experts note that although voters generally support spending for schools and parks, they oppose spending on prisons. In 1990, voters rejected a $450-million prison construction bond, the last time they voted on a jail measure. Prison construction advocates have been hesitant to put new bonds on the ballot, in part because polls show that voters oppose them.

Voters also turned down Proposition 217, which would have raised income taxes for the highest-earning Californians and shift the $700 million raised to local government and schools.

“Taxes is a tough issue,” said Lenny Goldberg, a leading proponent of the 217 campaign. “It’s always been tough, always will be a tough issue.”