The Buck Stops in Sacramento, With Quality of Life Close Behind

Why did you vote for SOAR? Well, perhaps you didn’t, but enough people did to make that a fairly safe assumption. Any ballot measure that snatches more than 60% of the vote will seize the attention of every politician in town.

Ostensibly the Save Open Space and Agricultural Resources measures were about preserving agricultural land being lost to encroaching urbanization. The Hansen Trust statistics on the rate at which cropland was being converted to construction provided the spark to ignite this prairie fire. SOAR received scant support from the industry it was designed to protect. The actual emotional foot soldiers in the SOAR campaign were motivated by something much more personal, namely preserving the quality of life in their communities.

Now here’s the part where your eyes are going to begin to glaze over. Bear with me as I spell out the relationship between quality of life and the California state tax structure.

Folks don’t realize how paltry a share of property tax income stays in their local communities. Sacramento is the place where bucks check in but they don’t check out. The state Legislature parcels out revenue to the cities according to a complex formula. Port Hueneme receives 19 cents on the dollar; Camarillo gets only 4 cents. Some cities get nothing at all.

With no connection between land use and taxation, is it any wonder that cities come up with the distorted development decisions they do?

The need to make up for disappearing property tax dollars rewards all the wrong behavior: discount retail over job creation, pricey manors over affordable housing, ugly sprawl over livable communities. Without a change in the basic structure of municipal finance, the underlying forces that gave rise to SOAR will continue unabated.

If we’re going to make sense out of land-use policy, then we’ve got to start creating incentives for doing things right. By allowing a greater rate of property tax return, we could invent inducements that would go a long way toward realizing the verdant vision of Ventura County expressed by voters in the last election.

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Fundamental reform of local finance would mean that cities would be able to count on stable, predictable funding for top-notch local police departments, first-rate libraries, clean and safe neighborhoods and much needed investment in infrastructure. Once change was achieved--and only then--would it be prudent to discuss hacking away at other local assessments such as the vehicle license fee or sales tax.

Can tax structure reform be achieved? The fact is, the Legislature could do all of this tomorrow if--and this is a big if--it had the political will. Proposition 13 gives the Legislature the power to apportion property tax. What we need are legislators who have the understanding and the will to act. Term limits mean that more people with local government experience are replacing the old Sacramento in-crowd. Change is not only necessary, it is inevitable.

When you voted for SOAR, you may not have realized that you were saying yes to a two-step process. If you want livable communities, affordable housing and good-paying jobs for an increasing population, it’s time to focus on municipal finance and the incentives it creates.

Although reforming California’s tax structure may not grab many headlines, when it comes to maintaining the quality of life in your neighborhood, it’s news you can use.