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Another View: Bad news for local government budgets in November ballot measures

By: Will Stockwin, Colfax Mayor
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California’s city and county governments will be under direct fiscal assault by the state and its pro-business surrogates in this November’s election.

Two separate ballot measures currently pose the greatest threat to local government budgets: AB 1912, authored by Assemblyman Freddie Rodriguez; and the deceptively named Tax Fairness, Transparency and Accountability Act (Tax Act) that is being pushed by the California Business Roundtable.

Assembly Bill 1912 would shackle local government budgets to retroactively and prospectively assuming the retirement liabilities of any joint powers authority (JPA) to which they belong. The bill would also mandate that CalPers file suit against all agencies that have ever been a member of a terminated JPA for all retirement related obligations.

As the mayor of Colfax, I oppose this legislation because the JPAs that help state and local agencies reduce costs for service demands and infrastructure improvements would almost certainly become cost prohibitive for small cities like mine and, with its members crushed by the weight of increased pension liabilities, JPAs might cease to exist altogether.

Another perspective on AB 1912 sees it as an extreme response to a single-cited incidence of a JPA abandoning its employee pension obligations, and simply represents the latest attempt by the state to replace the millions of dollars CalPers lost in 2008 when markets tanked and the agency was caught in the open with too many risky investments.

An argument can also be made that AB 1912 violates California State Constitution Article XVI, Section 18 in that retroactive application of retirement and pension liabilities constitutes an illegal gift of public funds, and that doing so would violate the state’s constitutional debt limit without first receiving approval from two-thirds of voters.

The Business Roundtable’s Tax Act would hamstring local government taxing authority by imposing super majority vote requirements for all fees and taxes local governments may wish to establish to support services and infrastructure improvements. The glaring irony here is that the act itself will only need a simple majority vote to amend the state constitution, become law and wreak havoc on local budgets.

If passed, the act would further restrict local tax authority by triggering referendums on tax and fee decisions made by a legislative body if as few as 5 percent of affected voters sign protest petitions. And it would likely expose local governments to new voter legal challenges by replacing existing standards for fees and charges, and by increasing a local government’s legal burden of proof that proposed fees are necessary and reasonable.

The impacts from both of these ballot measures will present huge negatives for small cities like Colfax, which already exist on limited, perennially tight budgets. As mayor I see them posing unwarranted and unnecessary obstacles to our ability to continue providing equitable services to our citizens in a state where the cost of providing those services is constantly going up.

A decade after the nation’s economy nearly crashed, small cities like Colfax are still struggling out from under years of the slowly receding “Great Recession.” If the two ballot measures discussed here pass they will inflict unanticipated and unbudgeted fiscal pain statewide, leaving local governments to face the very real possibility of losing regained fiscal sustainability and slipping backwards.

Speaking only for Colfax, that would create a situation we cannot afford and must strongly oppose. We encourage other cities to join us.

Will Stockwin is the mayor of Colfax.