BOND PROJECTS RAISE PROPERTY TAXES 10 PERCENT SINCE 1989

The Daily News of Los Angeles

Voter approval of more than a dozen bond issues in Los Angeles over the last 15 years for schools, police stations and other local projects has increased property taxes and raised increasing concern that future generations are being made to pay too big a price for today’s public programs.

Just last week, two Los Angeles City Council members proposed a $1.5 billion bond to repave the city’s crumbling streets while other proposals at the local and state level would add to residents’ burden, either by raising taxes directly or diverting current revenue to repay them in future years.

In the past 15 years, voter-approved bonds in Los Angeles have increased the average homeowners’ property taxes by 10 percent — a cost that weighs heavily on recent home buyers facing property taxes at the full value of houses bought at a time when prices are soaring.

Since 1989, voter-approved bonds have boosted the average homeowner’s tax bill from $1,035 to $1,155 per $100,000 of assessed value, according to figures provided by the county Assessor and Auditor-Controller offices. And that doesn’t even include the various parcel taxes, assessments or rate increases in such services as trash collection or utilities.

To some homeowners, it’s become a question of whether Proposition 13 — designed to curtail soaring property taxes by capping them at 1 percent of a home’s assessed value — has been effective when voters are being constantly asked to approve bonds that will raise their property taxes.

Throughout the county, voters have approved approximately 300 to 400 city, county, school district and special district bonds in recent years, according to county officials. Some of those include bonds that were refinanced.

Since 1989, Los Angeles has gotten voter approval for nine bonds totalling $2.5 billion for a variety of improvements. Voters have approved four bonds totaling $13.6 billion for the Los Angeles Unified School District, along with community college and state bonds as well.

Just in the past five years, voters throughout California approved bonds for schools, water systems, the environment, stem cell research and facilities totalling more than $42 billion — an average of $7.1 billion a year, according to the California Office of the Treasurer. Those bonds are paid out of existing revenue sources, straining current resources and contributing to the state’s deficit.

“In the last five years, we’ve seen a tremendous increase in the number of school districts that have gotten voters to approve bonds,” said county Assistant Treasurer and Tax Collector Glenn Byers. “We have 94 school districts in the county and most have issued general obligation bonds.

“And many have gone to voters several times and gotten more than one authorization, like the LAUSD, which got $2.5 billion a few years ago. They went back and asked for $4 billion. And when they got that, they went back and asked for more.”

And in recent months suggestions have been made to use bonds to finance everything from the governor’s $68 billion infrastructure proposal and Mayor Antonio Villaraigosa‘s plan to house the homeless to fixes for the county’s jail system.

While few dispute that the things bond money is designed to fix need improvement — how much is enough?

“Bonds are large-scale versions of credit cards, and like with credit cards, with bonds, it can be a killing-me-softly kind of effect,” said Doug Heller, executive director of The Foundation for Taxpayer and Consumer Rights in Santa Monica.

“For politicians, it’s a lot easier to ask the next generation to pay than to acknowledge that our city and society needs more money now and we should pay up front.”

Jon Coupal, president of the Howard Jarvis Taxpayers Association, said tax revenues at the city, county and state level have risen significantly in the last few years and yet government agencies keep crying poor.

“They will threaten popular things, but they won’t talk about car allowances, pensions or waste, fraud and abuse,” Coupal said. “Clearly the city of Los Angeles does not have a revenue problem; they have a spending problem.

“Why don’t they use existing funds more efficiently?”

Bob Stern, president of the Center for Governmental Studies in Los Angeles, said bonds are the new way of financing government expenditures.

“It’s a very important tool, but it postpones the payment,” Stern said. “Depending on what it’s for, it’s appropriate. Very few of us buy a house and pay up-front. We finance the house. We probably should be financing infrastructure through bonds. But what the governor did a couple of years ago is finance pension debts through bonds and we shouldn’t be doing that. But it’s a less painful way of paying our debts. The public wants more government spending, but wants less taxes. And that’s why bonds are so attractive.”

Since 1989, Los Angeles city voters have approved nine bonds totalling $2.5 billion. Those funds have paid for new branch libraries, fire stations, zoo exhibits and animal shelters.

Residents are still paying off the bonds, which tack on about $51 per $100,000 in assessed property value every year.

In the last eight years, the LAUSD has won passage of four bonds totalling $13.6 billion. As a result, the owner of a home with an assessed value of $500,000 will pay an extra $720 annually by 2009 compared with $425 last year.

Last week, San Fernando Valley Councilmen Tony Cardenas and Greig Smith proposed putting a $1.5 billion bond on the November ballot to repair some 4,000 miles of cracked and potholed city streets.

The bond money, they said, is the only way the city can begin to address a massive backlog of street repairs. Without the infusion of cash, it would take 80 years to fix the roads using current funding levels.

“We’ve gotten so far behind and we have to catch up, 5/8 Smith said.

The City Council is increasingly turning to voters for projects that traditionally would have been covered through the general fund or service fees, such as street repairs.

In 2004, Los Angeles voters passed Proposition O to pay for projects to clean up stormwater pollution and improve water quality, because the city’s current $24 per house per year stormwater pollution abatement fee wasn’t enough to cover the cost of new regulations.

The water bond would add about $10 per $100,000 assessed value to people’s property tax.

“To use day-to-day funds for infrastructure doesn’t make sense because we don’t even have the day-to-day funds to hire the police officers we need,” Cardenas said last week at a press conference for the street paving bond.

“Today (Proposition 13) forces us to deal with infrastructure almost completely with bonds.”

Now that a $96 million jail bond voters approved in 1986 is nearly paid off, county officials are preparing another jail bond for the November ballot to reopen closed jails.

“It’s clear we have to do something to address the jail system,” Supervisor Zev Yaroslavsky said. “The county has $10 billion of debt capacity. It’s not as though the county has extensively used general obligation bonds. It has been used very sparingly.”

At the state level, a number of new bonds have been proposed this year, including a $600 million library bond on the June 6 ballot and a $9.95 billion high-speed passenger train bond on the Nov. 7 ballot.

“Since 1988, the price tag for our libraries has risen 600 percent in borrowed money,” wrote Coupal, Assemblyman Ray Haynes, R-Temecula, and Lew Uhler, president of the National Tax Limitation Committee, in their ballot opposition to the library bond.

“Since 1988, the state budget has increased 500 percent from $20 billion to $100 billion. The state has five times the money it had in 1988 and it can’t find $600 million for libraries?

“We spent $9 billion on illegal alien welfare last year, yet the state can’t find one dime in money for libraries, and has to borrow money again? Something is wrong.”

And Byers pointed out a little-known fact — that state bonds don’t increase property or other taxes and are paid out of existing general fund revenues.

“People are hearing all these wild things about building new freeways and a new port and doing all this water conservation,” Byers said.

“But unless they have increased revenues, they will have to pay for it out of the existing budget. All these new bond issues require cuts in something else to pay for it.”

In the San Fernando Valley, some residents said paying more is fine, as long as it goes where it’s supposed to.

“We’re taxed enough, but if we don’t pay, then the Valley will fall apart,” said Charleene Feldman, 50, who was tending to her checkbook as she worked inside her soon to be own needlepoint shop called Needle Hearts in Tarzana.

Born and raised in the Valley, Feldman said her business depends on the expendable cash of others.

She said it seems local government keeps coming at residents with an open hand, asking for more money.

Fine, she said, but as long as it goes to the right places such as schools, and more police.

“I just think we’re being pulled in all these different directions, but at the same time, we need to appropriate that money better.”

At Jerry’s Pizzeria in Canoga Park, David Gordon, 52, said government spending has gotten out of control, but residents who have the money, who can afford to fill their SUVs with the rising cost of gas, won’t feel the pinch.

He said he has had to cut down on driving.

“It’s sad to see,” he said. “Everything is so high now. So we drive over some potholes, so what?

“They should take that money and pay for more cops, instead of raising the trash rates.”
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Staff Writer Susan Abram contributed to this story.