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Harris Sherline: California’s Ballot Solicits More Taxes, As Usual

The total amount of new borrowing would be $16.83 billion. It's time voters took a stand.

The Official Voter Information Guide for the Nov. 4 election has arrived in mailboxes. After giving it the usual once over, I was struck by the number of propositions Californians will be asked to vote on. However, as I read through the slate of propositions in the guide, what really got my attention was the money involved. Thinking back to the last election cycle and remembering that voters approved about $41 billion in new borrowing, I was motivated to prepare a schedule that summarizes the spending that’s being requested in this election.

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Harris Sherline
First, a brief summary: There are 12 propositions on the ballot, the total amount of new borrowing (bonds) would be $16.83 billion, the annual debt service on the proposed new bonds would be $1.10 billion and the annual cost of the various propositions, not including debt service on the bonds, would be $1.85 billion.

Proposition 12, the Veterans’ Bond Act of 2008, in the amount of $900 million, is intended to provide farm and home aid for California veterans, so the cost may be a wash because payments received on loans to the vets would probably repay the bonds.

In addition, about $3.4 million of the estimated annual cost of Proposition 7, the Renewable Energy Generation Initiative, is expected to be paid by fees that would be charged to utilities. Although it appears that the state’s administrative expense for this proposition would be covered by fees, ratepayers’ bills surely would rise as a result of the mandates the utilities would be required to meet.

The rest of the propositions would cost a total of $1.83 billion a year. That’s a hefty sum.

Proposition 1A, “High-Speed Passenger Train Bonds,” is the most costly, and perhaps the most questionable. It authorize $9.95 billion in borrowing to develop high-speed train service between Burbank and San Francisco, and the annual debt service payments of $647 million are expected to come from the state’s General Fund.

The Howard Jarvis Taxpayers Association argues, “This political boondoggle will cost taxpayers $19,200,000,000 in principal and interest. We need that money for schools, health care and public safety. The bureaucrats could waste billions of dollars before we see one inch of track. During California’s biggest budget crisis we can’t afford to spend billions on a pipe dream.”

How will the money be spent? And, will $9.95 billion be enough to build high-speed rail service? The rebuttal to the argument in favor of the proposition notes: “Even they admit the train is likely to cost at least $40 billion so this is just a ‘partial payment’ by taxpayers, with NO guarantee it will ever get finished.”

Since the General Fund is the proposed source of repayment, where will the funds for the annual $647 million payments come from, considering California’s budget is already running a deficit, with no end in sight?

There’s another larger and perhaps more important issue involved in this year’s ballot propositions: the additional taxes that are proposed on local ballots along with California’s borrowing and taxation initiatives.

For example, in Santa Barbara County, two parcel taxes are being proposed for the Santa Barbara School Districts along with Measure A, which is asking voters to renew a half-cent sales tax for maintenance of roads, widening Highway 101, alternative transportation, etc. In addition, among other tax proposals in the county, the city of Santa Barbara is seeking approval of a tax on cell phone usage.

The Howard Jarvis Taxpayers Association points out that Los Angeles residents “will be asked to approve a property parcel tax for anti-gang programs, two huge multibillion-dollar bonds for the community college system and the LAUSD (Los Angeles Unified School District), as well as a half-cent sales tax for transportation.” In addition to the sales tax increase, Los Angeles County residents “face paying more to use wireless phone service. ... San Jose has two telephone-related tax measures on the ballot and Sacramento wants to expand the tax on phones to include text messaging. There are dozens more.”

In addition to the revenue they already receive from taxes and fees, all governmental entities invariably have their hands out, asking for more. There is little or no coordination among them, and no one seems to give any thought to the cumulative effect of ever increasing taxation on taxpayers. It never stops, and what most voters don’t see is the bureaucratic structure that’s often created to maintain and collect the taxes that accompany just about every tax initiative.

Sooner or later, voters must take a stand and defend themselves at the ballot box. Perhaps if they simply vote no on every request for money, our politicians will get the message.

Harris R. Sherline is a retired CPA and former chairman and CEO of Santa Ynez Valley Hospital who has lived in Santa Barbara County for more than 30 years. He stays active writing opinion columns and his own blog,

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