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Too Many Tax Measures Spells Defeat at the Polls By ROB WRENN

Special to the Planet
Monday January 03, 2005

In November’s election, Berkeley voters decisively rejected four City of Berkeley tax measures, while giving solid support to Measure B, a parcel tax for the schools. 

The results of the 2004 election are very similar to the results of the 2002 election where voters also faced multiple tax measures on the same ballot.  

In that election, they rejected two tax measures and a bond measure, while only narrowly approving a bond measure for a new animal shelter.  

The 2002 and 2004 elections signal that there are limits to the willingness of Berkeley voters to support additional city taxes. At the same time voters continue to show strong support for funding Berkeley schools. 

In a sharp departure from the previous two decades, since the November 2000 election, Berkeley voters have been asked to support a much larger number of tax measures on each ballot.  

In the 1980s and 1990s, in 10 election years, there were a total of eight tax and bond measures on the ballot, not including re-authorizations of existing taxes. Since 2000, in just three election years, sixteen measures have been put before the voters.  

From 1980 through 1998, facing no more than one new tax or bond per ballot, Berkeley voters approved four measures to establish or increase parcel taxes, and three bond measures.  

During this period, they also voted to reauthorize existing taxes by large margins. They rejected only one measure, a fire service fee in 1984.  

In 2000, at the end of the economic boom of the 1990s, voters were in a generous mood. Confronted for the first time with a large number of tax measures on the same ballot, they nonetheless approved three small city bond measures along with a very large bond measure for the schools.  

They also approved an increase in the parcel tax for landscaping and parks and a parcel tax for school maintenance. One parcel tax, for street lights, was rejected however. 

In 2002, after the economy had taken a turn for the worse, voters were in a less generous mood. Measure M, which would have increased the property transfer tax to provide funds for affordable housing, and Measure L, a parcel tax for pedestrian safety improvements, were both defeated.  

These measures along with a bond measure to retrofit Old City Hall were defeated even though there was not much of an active campaign against them.  

By contrast, the tax measures this year faced organized opposition, with campaign mailers funded in large part by contributions from a Berkeley Property Owners Association “Housing Justice Coalition”. 

It would be a mistake to conclude that Berkeley voters have become “anti-tax.” The strong support for Measure B shows a willingness to continue to tax themselves for things they see as priorities, but voters have clearly shown that there are limits to how many new taxes they are willing to absorb. 


Responding to Proposition 13 

To understand why the city has regularly gone to the voters for additional taxes, it helps to keep in mind the enormous impact that Proposition 13 has had on Berkeley and other cities. 

The passage of Proposition 13 in June 1978 created a major problem for Berkeley by severely limiting property tax revenues. Berkeley voters had opposed Proposition 13 by a 73 percent-27 percent margin.  

From 1978 through 1982, Berkeley’s revenues fell sharply. A drop in property tax revenues was exacerbated by cuts in federal funds. 

In the 1980s, Berkeley responded by enacting new taxes and assessments to undo the damage caused by Proposition 13 and ensure adequate funding to maintain city services and the schools.  

The Utility Users Tax, the Property Transfer Tax, and the Street Lighting and Landscaping assessments had all been enacted by 1985. Together, they generated about $8.4 million in revenue in the 1984-1985 fiscal year. The business license tax was also increased in this period.  

These taxes helped restore the city to fiscal health. 

Proposition 13 required a two-thirds vote to increase local non-property taxes, so other taxes that were enacted had to go before Berkeley voters for approval. 


Progressive Over Regressive 

Of the five taxes on the November 2004 ballot, Measure J, the measure to increase the utility users tax from 7.5 percent to 9 percent for four years, was the least popular. While it required only 50 percent to pass, it failed to gain a majority of votes in a single precinct. It topped 40 percent in only three City Council districts. 

The across-the-board rejection of Measure J is not hard to understand as it was the most regressive of the four taxes and would have affected a large majority of the city’s residents including tenants. 

It was strongly rejected in student areas and tenant neighborhoods as well as by hills residents and flatlands homeowners. 

The fact that Measure J revenues were not earmarked for a specific purpose, but would have gone to the General Fund for “general governmental purposes” may have also been a factor in its defeat. 

Measure K, a proposal to fund youth services by increasing the property transfer tax on sales of $600,000 or more garnered the most support from voters.  

It would have impacted the smallest number of residents and was clearly the most progressive tax, one that would have fallen more heavily on more affluent homeowners.  

Measure K, which won 54 percent of the vote citywide, won majorities in six of the city’s eight council districts. It won the two-thirds or more needed for passage in 15 of the city’s 88 precincts, including student-dominated precincts within half-mile of the UC campus and in South Berkeley south of Ashby.  

The impact of student precincts on the citywide results was not as great as it could have been because many students did not vote on one or more of the tax measures. In student precincts, there were at least 20 percent and in some cases more than 40 percent blank votes cast on each tax measure. 

By contrast, citywide, blank voting ranged from 13.2 percent on Measure B to 18.8 percent on Measure M. 


No Rescue for the Libraries 

Measure L for the libraries failed to win two-thirds support in a single precinct. It did win a majority of the vote in five Council districts. In hills areas, it won more support than any of the other city tax measures, but fell short of 50 percent.  

It also failed to gain even majority support in most precincts in the San Pablo Park area of District 2, an area that has traditionally been supportive of tax measures. 

The original library tax, the Library Relief Act of 1980, was the first tax to go to the voters after the passage of Prop. 13. It passed with 69.3 percent of the vote. In 1988, voters agreed to amend the Library Relief Act to increase the tax rate by a narrower 67-33 percent margin.  

The amended tax was designed to generate enough revenue to keep the Main Library open on Sunday and the branches six days a week. 

The library parcel tax and other parcel taxes allow for inflation adjustments without going back to the voters, but when costs rise faster than the rate of inflation, the tax fails to generate sufficient revenue to cover costs.  

Costs have risen faster than inflation and this has led once again to the more limited hours and Sunday closure that the 1988 measure was designed to prevent. And this time around voters who reauthorized the current library tax in 2000, were not willing to increase the tax rate further. 

The City Council could provide the libraries with some General Fund money to supplement the amounts generated by the Library Tax, but this is unlikely to happen with all the demands being made on the General Fund. 

In the last four years the share of the General Fund going to the police and fire departments has increased from 45 percent to 51 percent, leaving less money available for other city services and programs. The cost of salaries and benefits per employee for the police department have increased by 43 percent in just four years. 


Support Continues for Schools 

While the city tax measures fared poorly, Measure B, a two-year parcel tax for the schools, won handily, with 72.2 percent. It garnered the necessary two-thirds or more in 67 precincts. It fell short primarily in hills precincts of Districts 5, 6 and 8. Only one flatlands precinct, in West Berkeley, fell short of two-thirds and only by a few votes. 

Measure B is the third parcel tax that voters have approved for Berkeley’s schools. They have also approved two bond measures, one for $158 million in 1992 and one for $116.5 million in 2000. 

Altitude continues to play a role in Berkeley politics. Hills areas close to Tilden Park and Kensington in Districts 5 and 6, and above Claremont Avenue in District 8 produced the smallest percentages of yes votes on all four measures. These same areas also failed to produce two-thirds support for the more closely contested bond measures and parcel taxes in the 1990s.