Howard Jarvis Taxpayers Association members and frequent readers of this column have undoubtedly heard about Assembly Constitutional Amendment 1. ACA 1 is a direct and perennial attack on Proposition 13 that would change the state Constitution to cut the percentage of votes needed to raise special taxes, dropping it from the current two-thirds required under Prop. 13 to only 55%.
This year, hoping to capitalize on California’s dual crises of housing and homelessness, ACA 1 has been slightly altered to allow higher taxes for anything labeled “infrastructure” and for certain public housing projects.
Fortunately, while it is introduced every year, we always manage to beat it back. However, you never know when some deal may be struck that sees ACA 1 sail through. That is especially true in this new Legislature session. With so many new legislators, it is hard to guess what they are going to do. Bad bills pass all the time.
And this might be the year.
ACA 1 passed its first committee last week. What is most worrying is that while it unsurprisingly met with the approval of the tax and spenders (Tasha Boerner, D-Encinitas; Juan Carrillo, D-Palmdale; Matt Haney, D-San Francisco; Blanca Pacheco, D-Downey; James Ramos, D-Highland; Lori Wilson, D-Fairfield), only Diane Dixon, R-Newport Beach, voted no (Marie Waldron, R-Valley Center, didn’t vote).
Why is ACA 1 such a concern? Well, it would make it easier to raise taxes. It would lower the voter approval requirement for sales and parcel tax increases from two-thirds to 55 percent if the money would be used for “public infrastructure” or “affordable housing.” Proposition 13 mandates a two-thirds vote requirements for all special taxes, but ACA 1 would wipe out that protection for nearly all local taxes because the category of “infrastructure” covers almost anything.
That’s why it’s supported by a smorgasbord of government agencies and unions. In fact, the bill is being sponsored by the California Professional Firefighters association. By the way, these are the same folks that helped pass Prop. 19 to tax your kids out of your family home when they inherit it. Now they’re back for more. If you’re a firefighter, you should really question what your dues are going to.
Proponents will tell you they aren’t raising taxes, you are. They’re just “asking” the question. Don’t be fooled. They know what they are doing. In 2000, voters lowered the threshold needed to approve school bonds from two-thirds to 55 percent after being promised big improvements in education. This led to billions in higher property taxes. And those promised improvements? Test scores are now lower than ever. Statewide, students meeting the standard for English dropped by 4% (51% to 47%), and for math, it fell by 7% (40% to 33%).
ACA 1 is a tax increase, and worse—it’s an engine to raise taxes over and over again in every local election, just by calling any government spending “infrastructure,” even if it’s really for salaries, programs, or to free up existing revenue to cover pension liabilities.
And in an especially sneaky trick, ACA 1 goes into effect instantly. That means tax hikes on the same ballot that require a 2/3 vote would automatically require only 55% if ACA 1 passes. Billions of dollars in tax hikes will start that much faster.
Mind you, these are below-the-line exactions that are added to property tax bills above and beyond Prop. 13’s one percent cap. That’s why Prop. 13’s two-thirds vote requirements for all special taxes is so important. It protects property owners, and it must stand.
ACA 1 will also have the perversely negative effect of increasing the cost of housing dramatically even as it claims to help make it more affordable. Nationwide, according to the National Association of Home Builders, a $1,000 home price increase would make 117,932 more households disqualify for the new home mortgage. Making it easier to approve hundreds of dollars a year in new annual bonds, sales and parcel taxes won’t make it easier to afford a home, and it won’t make it easier for renters to be able to save.
No matter how you slice it, ACA 1 is a tax hike and any Legislator that votes for it is voting to hike your taxes. Be warned.
Jon Coupal is president of the Howard Jarvis Taxpayers Association.