Palo Alto is taking a stance against a proposed state measure that would make it harder for cities to adopt new taxes, despite concerns from two City Council members that the city's is acting too hastily in its opposition.
The council voted 7-2 on April 16, with Councilman Greg Tanaka and Councilwoman Lydia Kou dissenting, to pass a resolution opposing what's known as the "Tax Fairness, Transparency and Accountability Act of 2018." Crafted by the California Business Roundtable, the proposed measure would require any new tax to win support from two-thirds of voters and reclassify certain service fees as taxes.
Proponents of the measure note that Californians are already among of the most heavily taxed people in the country. They point to U.S. census data showing that Californians, while making up 12 percent of the national population, paid 17 percent of all taxes collected by states. For too long, the measure states, "politicians, state and local government, and special interests have promised that taxpayer money will be spent for a specific purpose, only to divert its use once the money starts coming in."
The purpose of the measure, according to its own wording, is to "ensure that taxpayers have the right and ability to effectively balance new or increased taxes, fees, charges, or other government revenues with the rapidly increasing costs Californians are already paying for housing, food, gasoline, energy, healthcare, education and other basic costs of living."
But in Palo Alto, where city leaders are eyeing a tax to pay for infrastructure improvements, the proposed measure could pose a fresh obstacle. In voting to oppose the measure, the council majority shared the assessment of City Manager James Keene, who argued that the measure isn't so much about "transparency" as it is about letting businesses avoid paying their fair share for the services they receive.
The resolution the council approved makes the case that the purpose of the measure is to allow businesses to "escape from their existing obligations" and that, if approved, it would "shift the burden of these uncovered costs from business interests to local general funds supported by taxpayers, and thereby reduce general funds available to support police, fire, park, planning and other community services."
The resolution, which the council approved on its "consent calendar" with little discussion, also argues that the measure is the very opposite of "fair," in that it places a minority of voters in control of public decision-making, thus "negating a fundamental practice of majority rule in our democracy."
Mayor Liz Kniss, who earlier this month went to a League of California Cities meeting, said the attendees had spent about an hour discussing the ramifications the measure would have for local governments, which she called "pretty extreme." Most of her colleagues agreed and joined her in opposing the measure.
Tanaka, a passionate advocate for fiscal restraint, took a different view and argued that the proposed measure "seems to have a lot of really good elements." Though he didn't go as far as endorsing the measure, he said he was disappointed by the council's decision to pass a resolution of opposition on the "consent calendar," without real debate.
"This is a time when the council is considering going to the ballot on an infrastructure bill. I'd say, for us to do that, it means we want to make sure our house is in order," Tanaka said. "So for us to automatically, without any discussion, oppose a measure which is trying to improve tax fairness, transparency and accountability doesn't seem right."
Kou also declined to take a stance on the proposed measure, which is now going through the signature-gathering process (it needs 585,407 signatures to qualify for the November ballot). It's important for the council and the community to have a better understanding of the new ballot measures before the city commits to a position, Kou argued.
She said she wanted to make sure the public understands the initiative and that residents should have "the opportunity to decide based on the pros and cons presented to them."