Blog Post < Previous | Next >
costmarin.org
The First Wave of Tax Tsunami on November Horizon
A tsunami of tax measures is on California’s horizon, with the leading edge breaking on our shores in November 2024. This could be an inflection point, with significantly higher taxes — particularly at the local and regional level — exacerbating unaffordability for millions of residents and businesses alike.
Across California, agencies are struggling to fund promised services while protecting their employees and our state government faces a California’s massive deficit.
Raising taxes is the go to solution.
The rub: More voters are resisting higher taxes, unless they aren’t on the hook for paying them. Millionaire taxes remain popular. Apartment renters may be amenable to taxing property owners if they don’t make the connection to their own cost of living.
Enter stage left: ACA-1, a constitutional amendment on the November 2024 ballot.
ACA-1 is supported by The California League of Cities and opposed by California’s Chamber of Commerce, Association of Realtors, and leading business and individual taxpayers’ organizations. If passed, ACA-1 will lower the threshold to pass many new taxes from 2/3 to 55%, particularly if the tax measure states it will fund affordable housing or infrastructure (which could encompass a wide swath of tax proposals). If ACA-1 passes, it is instantaneously effective, lowering the threshold for tax measures that are on that same November ballot. This will spur a tidal wave of bond and other tax measures starting in November 2024 and, if ACA-1 passes, extending through 2026 and beyond until tax exhaustion peaks.
Per Dr. Gary Galles, economics professor at Pepperdine University,
“ACA 1 would sharply lower Proposition 13’s two-thirds voter threshold to 55% for local special taxes to fund ‘infrastructure’ so vaguely defined that virtually anything could qualify.”
Bond measures typically last 30 years. So the impact of ACA-1 cannot be unwound for a generation even if it is repealed or modified in the next decade.
CO$T is currently tracking a number of local and regional measures that could be on the November ballot and will keep you posted. The first big one moving forward is a Bay Area regional tax measure that would greenlight the Bay Area Housing Finance Authority (BAHFA) issuing up to $20 billion in bonds (which could cost taxpayers twice that with interest). This is projected to add $120 in property taxes per $1 million assessed valuation over the bond’s 30-year life.
As detailed in our letter to Marin County Supervisors, this is a very expensive, inefficient way of funding a small amount of affordable housing and obligating local governments (= taxpayers) to provide in perpetuity a host of consequent, unfunded services and subsidies.
The BAHFA bond could be on the same ballot as a second try at passing a $1 billion Tam Union High School District tax very similar to Measure A that voters rebuffed in the March election. Tam Union’s board will likely hire this month consultants and pollsters to assess how to get more Yes votes in a retry.
Several Marin cities are also looking to place bond and sales tax measures before voters in November. If taxpayers are to avoid being drowned by the tsunami – or if they are concerned about the fates of their children, friends and neighbors — they are going to have to start being selective. CO$T will also be selective, using our existing Sensible Tax Criteria and developing new Bond Guidelines and Guardrails to screen tax proposals.
While the outlook is concerning, it is possible that voters will reject ACA-1. It is disturbing that Marin County supervisors aren’t waiting for the November vote.
They will consider on April 2 (agenda item 6) approving money to create an affordable housing two year Fixed Term Principal Planner position at a cost of $450,000. This person would oversee and direct Marin’s portion of the not-yet-approved BAHFA bond program.
This reminds us of Tam Union High School District, which many months before the ill-fated vote on Measure A, also hired a bond project manager as well as spending over $7 million on developing plans for large new building complexes at Redwood and Tam high schools. It’s fiscally irresponsible to spend our tax dollars gambling on the outcome of a future election.
Email your Supervisor NOW!
Join us in urging Marin Supervisors to
(1) Vote "NO" on hiring an affordable housing Principle Planner at least until voters approve the BAHFA measure, and
(2) Seriously consider opting out of the regional tax measure as not in the best interests of Marin County residents.
If you are concerned about the tax tsunami, please consider a donation to CO$T today to help fund our advocacy on behalf of Marin taxpayer-voters.
CLICK HERE to read CO$T’s letter to Marin County’s Board of Supervisors to learn more about our objections to the BAHFA bond measure and why Marin should reject this proposal as unduly costly, financially inefficient, and fiscally irresponsible.