Anti-Tax Crusader Unfazed by Powerful Foes on School Bonds

On one side is the power and might of the California political establishment. On the other is Dean Andal, a relatively obscure anti-tax crusader who is taking on the establishment as a front man for a campaign to defeat Proposition 39.

The battle over the measure, which would lower the threshold for passing school bonds from a two-thirds vote to 55%, is a particularly lopsided one.

It has pitted the conservative Andal, a Republican who heads the state Board of Equalization, against a pair of governors, the California education system and deep-pocketed members of the state’s politically energized high-tech community.

Disparities aside, Andal’s opposition to Proposition 39 has catapulted the 40-year-old former assemblyman from Stockton into the limelight. As honorary chairman of the “No” effort, Andal, who is considering running for state controller in 2002, has been featured in a wave of radio ads and political mailers asserting that Proposition 39 would lead to higher property taxes.

“He is an obvious match for this campaign,” said Sheri Annis, a spokeswoman for the Save Our Homes Committee, Vote No on Prop. 39 campaign. “We feel he lends credibility to the campaign.”

Voters defeated a similar measure, Proposition 26, by a mere 2.4% in March.

GOP strategist Allan Hoffenblum says it’s a win-win situation for Andal, regardless of how Proposition 39--being marketed as a new and improved version of Proposition 26--fares at the polls.

“I don’t think there are too many homeowners who are going to vote against Dean Andal for trying to make it tougher to raise property taxes,” said Hoffenblum, who supports Proposition 39.

Andal has been ruffling feathers lately with his anti-tax stance, however.

He recently irritated Assemblywoman Carole Migden (D-San Francisco) by issuing a news release urging Gov. Gray Davis to veto an Internet tax-related bill Migden sponsored that is now on Davis’ desk (and which the governor is expected to veto).

And Andal has drawn criticism from county assessors for voting to lower the value of a number of utilities. The assessors argue that the action has resulted in millions of dollars in tax breaks for the utilities.

Andal said his opposition to Proposition 39 is based on his belief that there are better ways to fund school construction than by making it easier to raise property taxes at the local level. He notes that, at a time when the state is awash in billions of surplus dollars, not a single cent generated over the last two years has been spent on new school construction.

“I think Gov. Davis and the Legislature have a lot of nerve asking people to increase property taxes when they haven’t spent any of the money available to them for school construction,” said Andal, who contends that the measure will keep aspiring homeowners from realizing their dreams.

Andal’s role in the No on 39 campaign has prompted accusations of foul play by the measure’s proponents.

A lawyer representing the group leading the “Yes” side--Taxpayers for Accountability and Better Schools--has taken issue with a letter signed by Andal seeking contributions for the “No” campaign.

Among the complaints is that the letter bears the California state seal and identifies Andal as chairman of the “State Board of Tax Equalization.” Critics say the document misleads in its appearance of being official: The agency that has jurisdiction over state tax matters is the Board of Equalization.

“In my mind I’m just expressing the truth,” Andal said of the letter, which critics say was meant to frighten people. “I think Proposition 39 is scary.”

Annis draws attention to an April mailing by proponents of Proposition 39 that features the governor’s seal on the envelope and on an enclosed letter, which bears Gov. Gray Davis’ name and signature. Davis is chairman of the “Yes” campaign, and former Gov. Pete Wilson is honorary chairman.

Andal began his career in state politics in 1991, when he was elected to the Assembly from Stockton, where he lives with his wife, Kari, and son, Patrick. He got caught up in a political soap opera when former Speaker Willie Brown thwarted his efforts to become vice chairman of the Assembly Ways and Means Committee in 1993, instead awarding the post to maverick Republican Paul Horcher.

Andal demonstrated an independent streak later that year when he abstained from voting on a controversial bill, heavily supported by his Republican colleagues, to curb locally imposed smoking bans.

Mindful of term limits, Andal ran for the Board of Equalization in 1994 and won. The five members of the powerful board are the state’s chief tax collectors.

They oversee county assessors, set property tax rates for utilities and enact tax regulations that are supposed to mesh with state law.

Andal, who is serving a second term, has found a political opponent in fellow board member Johan Klehs, a Democrat from Castro Valley who plans to make a bid for state controller in 2002. Klehs is critical of Andal for opposing Proposition 39 and for his voting record on utilities.

Klehs is among those accusing Andal of giving utilities, particularly those in the telecommunications industry, huge tax breaks by lowering their assessed valuations. The money, Klehs contends, might otherwise have been used to fund public schools.

“Dean Andal is basically an enemy of the public school system,” said Klehs, who supports Proposition 39.

Sonoma County Assessor Jim Gallagher said he and assessors from around the state plan to seek an explanation from the Board of Equalization for why utility rolls have decreased. Since 1995, the total property valuation for gas, electric, railroad and pipeline companies--as well as wireless, local exchange and inter-exchange telephone companies--has decreased by 8.4%.

Los Angeles County Assessor Rick Auerbach said he and other assessors are declining to follow entire portions of what is known as the advanced appraisal manual, which was recently updated by the Board of Equalization.

A disagreement exists, according to Auerbach, over the method suggested in the manual for assessing the value of intangible business possessions, such as a customer base.

“If we followed their suggestions in the handbook, there would be a great reduction in revenue,” said Auerbach, who described the conflict as a philosophical difference.

Andal angrily denies the assertion that he has been giving utilities tax breaks, noting that the companies’ values have declined for a complex set of reasons. He said he found Klehs’ criticism particularly baffling, noting that Klehs joined him in the 5-0 vote to adopt lower values for energy utilities earlier this year.

Andal said the reduction was triggered in part by the state’s deregulation requirements, which resulted in a number of energy utilities’ selling off their power-generating assets. The companies that purchased those assets, he continued, are assessed locally by county assessors.

“There are basically two protagonists,” Andal said, “the county assessors and Johan Klehs, neither of whom really knows much about [the factors prompting the lower valuations].”