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http://www.sacbee.com/content/politics/story/14285227p-15098748c.html
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'Arena' missing in arena measure
If voters OK tax hike, the ballot language may spark a test case.
'Wed Aug 2 00:01:00 PDT 2006
By Mary Lynne Vellinga and Terri Hardy -- Bee Staff Writers
Published 12:01 am PDT Wednesday, August 2, 2006
Sacramento city and county leaders are racing to nail down final details on an agreement with the Sacramento Kings for public financing of a new arena. But the questions they put before voters in November will offer none of those myriad specifics. The ballot measure calling for a quarter-cent sales tax boost won't mention an arena. A companion advisory measure will ask in vague terms whether voters want to spend the money on an arena and various community projects.
Indeed, the county's entire strategy hinges on being as nonspecific on the ballot as possible. By design, the county is trying to make promises without specific language on the ballot to enforce them, thus avoiding a requirement that taxes destined for clear-cut purposes pass by a two-thirds rather than majority vote.
Is the approach legal? If voters approve the arena funding plan in November, it will likely emerge as a test case.
Opponents say the strategy is an attempt to dodge the two-thirds requirement. They promise a court challenge.
"It is very likely that if this moves forward, we will be filing suits," said Kris Vosburgh, executive director of the statewide Howard Jarvis Taxpayers Association.
Even proponents acknowledge that the county may be venturing onto unknown legal territory.
"I believe we're on solid legal ground here, but it hasn't been tested," said Sacramento County Counsel Bob Ryan.
Supervisors today are expected to vote to place the complicated "A-plus-B" financing plan for the arena on the November ballot. It was carefully crafted to avoid California's requirement that taxes for specific purposes win by a two-thirds margin.
"It's very ambitious to try to get anything passed with a two-thirds vote," said Sacramento Vice Mayor Rob Fong, one of the drafters of the arena agreement. By classifying the tax as "general," they only need a majority vote.
One ballot measure will simply ask voters to adopt the new quarter-cent sales tax for 15 years. A companion advisory measure will ask voters if they would like to see $1.2 billion raised by the tax divided among the arena and community projects throughout the county. While the money clearly would be intended for an arena and other projects, legally the county could still spend it on anything. Thus, proponents argue, the tax is general.
The advisory measure "is by no means binding on the Board of Supervisors," said Jenna Magan, a lawyer with Orrick, Herrington & Sutcliffe, which advised Sacramento County on the arena proposal.
Magan said she thinks the A-plus-B measure would withstand legal scrutiny, citing a 1998 case in which the courts upheld a similar tax used by Santa Clara County for transportation projects.
But the legal backdrop may not be the same today. Santa Clara voters adopted the tax in 1996 on the same day that the Howard Jarvis Taxpayers Association secured voter approval of Proposition 218, a measure aimed at eliminating tax loopholes for local governments. Proposition 218 broadened the definition of a specific tax to include one intended for a specific purpose, even if the money first went to a county's general fund.
It was too late for Proposition 218 to apply to the Santa Clara measure.
Since then, the Howard Jarvis group has been itching for a chance to challenge an "A-plus-B" financing plan, Vosburgh said. He's not aware of one that voters have approved since Proposition 218.
This year, Santa Clara County went to the voters again with a request for higher taxes to pay for transportation projects such as a Bay Area Rapid Transit extension to San Jose. But the only thing on the ballot was a general sales tax measure. The companion advisory measure was left off.
"We opted not to try the A-plus-B approach in 2006 because it was dicey on whether or not it would be upheld in court," said Carl Guardino, chief executive officer of the Silicon Valley Leadership Group, which sponsored the tax measure.
The measure failed with 57 percent of voters opposed. Guardino blames an anti-tax mood among voters.
But Randy Rentschler, spokesman for the Bay Area Metropolitan Transportation Commission, said he thinks part of the problem was the same difficulty that will face Sacramento: There's no way to assure voters that money will be used for projects touted in the campaign.
A 2003 study by the Public Policy Institute of California found that local governments have a better chance of selling new taxes if they are very specific about how the money will be used.
"In general, voters appear more willing to support specific services or construction they feel will be of direct use to them," the study found.
Those embracing the A-plus-B approach readily admit it's flawed. But they blame California's tax law -- crafted at the ballot box and in the courts.
"California's crazy tax structure penalizes specificity with a two-thirds vote threshold and rewards ambiguity with a majority threshold," Guardino said. "You can thank the folks at the Howard Jarvis Taxpayers Association."
Jeff Raimundo, a Sacramento political consultant not involved in the arena issue, said the two-thirds requirement for specific taxes amounts to an "insurmountable" hurdle, forcing local governments to search for alternative approaches.
Local governments can sometimes obtain a two-thirds majority to continue an existing tax -- as Sacramento County did with Measure A in 2004 -- but they can rarely win such hearty approval for a new levy, he said.
Even if Sacramento County's approach holds up in court, a legal challenge could delay the planned 2010 opening of the new arena in the downtown railyard.
"It could take awhile," Ryan said. "Between trial and appeal, you're probably talking about two years."
Sacramento County Supervisor Roger Dickinson, one of the crafters of the arena deal, said he's not sure whether construction would start if the new tax to pay for it was being challenged in court.
"I don't think that question can be answered with absolute certainty at this point," he said in an e-mail message Tuesday. "It would depend on the specifics of the suit and all the facts and circumstances at the time."
BREAKING DOWN THE ARENA DEAL
• Proposal: $1.2 billion measure funded by a Sacramento County quarter-cent sales tax.
• Breakdown of funds: $470 million to $542 million for arena and parking structure; interest on construction loan $35 million to $51 million; minimum of $594 million for unspecified community projects.
• From the Kings' owners: Lump-sum payoff of an outstanding $71 million loan; sign 30-year lease, pay $4 million annually; $20 million repair fund.
• On the ballot: Requires approval by 50 percent plus one voter -- a simple majority.
• Next vote: Sacramento County supervisors, today, on whether to place the funding measure on the Nov. 7 ballot.
About the writer:
The Bee's Mary Lynne Vellinga can be reached at (916) 321-1094 or mlvellinga @sacbee.com.
===========================================================
'Arena' missing in arena measure
If voters OK tax hike, the ballot language may spark a test case.
'Wed Aug 2 00:01:00 PDT 2006
By Mary Lynne Vellinga and Terri Hardy -- Bee Staff Writers
Published 12:01 am PDT Wednesday, August 2, 2006
Sacramento city and county leaders are racing to nail down final details on an agreement with the Sacramento Kings for public financing of a new arena. But the questions they put before voters in November will offer none of those myriad specifics. The ballot measure calling for a quarter-cent sales tax boost won't mention an arena. A companion advisory measure will ask in vague terms whether voters want to spend the money on an arena and various community projects.
Indeed, the county's entire strategy hinges on being as nonspecific on the ballot as possible. By design, the county is trying to make promises without specific language on the ballot to enforce them, thus avoiding a requirement that taxes destined for clear-cut purposes pass by a two-thirds rather than majority vote.
Is the approach legal? If voters approve the arena funding plan in November, it will likely emerge as a test case.
Opponents say the strategy is an attempt to dodge the two-thirds requirement. They promise a court challenge.
"It is very likely that if this moves forward, we will be filing suits," said Kris Vosburgh, executive director of the statewide Howard Jarvis Taxpayers Association.
Even proponents acknowledge that the county may be venturing onto unknown legal territory.
"I believe we're on solid legal ground here, but it hasn't been tested," said Sacramento County Counsel Bob Ryan.
Supervisors today are expected to vote to place the complicated "A-plus-B" financing plan for the arena on the November ballot. It was carefully crafted to avoid California's requirement that taxes for specific purposes win by a two-thirds margin.
"It's very ambitious to try to get anything passed with a two-thirds vote," said Sacramento Vice Mayor Rob Fong, one of the drafters of the arena agreement. By classifying the tax as "general," they only need a majority vote.
One ballot measure will simply ask voters to adopt the new quarter-cent sales tax for 15 years. A companion advisory measure will ask voters if they would like to see $1.2 billion raised by the tax divided among the arena and community projects throughout the county. While the money clearly would be intended for an arena and other projects, legally the county could still spend it on anything. Thus, proponents argue, the tax is general.
The advisory measure "is by no means binding on the Board of Supervisors," said Jenna Magan, a lawyer with Orrick, Herrington & Sutcliffe, which advised Sacramento County on the arena proposal.
Magan said she thinks the A-plus-B measure would withstand legal scrutiny, citing a 1998 case in which the courts upheld a similar tax used by Santa Clara County for transportation projects.
But the legal backdrop may not be the same today. Santa Clara voters adopted the tax in 1996 on the same day that the Howard Jarvis Taxpayers Association secured voter approval of Proposition 218, a measure aimed at eliminating tax loopholes for local governments. Proposition 218 broadened the definition of a specific tax to include one intended for a specific purpose, even if the money first went to a county's general fund.
It was too late for Proposition 218 to apply to the Santa Clara measure.
Since then, the Howard Jarvis group has been itching for a chance to challenge an "A-plus-B" financing plan, Vosburgh said. He's not aware of one that voters have approved since Proposition 218.
This year, Santa Clara County went to the voters again with a request for higher taxes to pay for transportation projects such as a Bay Area Rapid Transit extension to San Jose. But the only thing on the ballot was a general sales tax measure. The companion advisory measure was left off.
"We opted not to try the A-plus-B approach in 2006 because it was dicey on whether or not it would be upheld in court," said Carl Guardino, chief executive officer of the Silicon Valley Leadership Group, which sponsored the tax measure.
The measure failed with 57 percent of voters opposed. Guardino blames an anti-tax mood among voters.
But Randy Rentschler, spokesman for the Bay Area Metropolitan Transportation Commission, said he thinks part of the problem was the same difficulty that will face Sacramento: There's no way to assure voters that money will be used for projects touted in the campaign.
A 2003 study by the Public Policy Institute of California found that local governments have a better chance of selling new taxes if they are very specific about how the money will be used.
"In general, voters appear more willing to support specific services or construction they feel will be of direct use to them," the study found.
Those embracing the A-plus-B approach readily admit it's flawed. But they blame California's tax law -- crafted at the ballot box and in the courts.
"California's crazy tax structure penalizes specificity with a two-thirds vote threshold and rewards ambiguity with a majority threshold," Guardino said. "You can thank the folks at the Howard Jarvis Taxpayers Association."
Jeff Raimundo, a Sacramento political consultant not involved in the arena issue, said the two-thirds requirement for specific taxes amounts to an "insurmountable" hurdle, forcing local governments to search for alternative approaches.
Local governments can sometimes obtain a two-thirds majority to continue an existing tax -- as Sacramento County did with Measure A in 2004 -- but they can rarely win such hearty approval for a new levy, he said.
Even if Sacramento County's approach holds up in court, a legal challenge could delay the planned 2010 opening of the new arena in the downtown railyard.
"It could take awhile," Ryan said. "Between trial and appeal, you're probably talking about two years."
Sacramento County Supervisor Roger Dickinson, one of the crafters of the arena deal, said he's not sure whether construction would start if the new tax to pay for it was being challenged in court.
"I don't think that question can be answered with absolute certainty at this point," he said in an e-mail message Tuesday. "It would depend on the specifics of the suit and all the facts and circumstances at the time."
BREAKING DOWN THE ARENA DEAL
• Proposal: $1.2 billion measure funded by a Sacramento County quarter-cent sales tax.
• Breakdown of funds: $470 million to $542 million for arena and parking structure; interest on construction loan $35 million to $51 million; minimum of $594 million for unspecified community projects.
• From the Kings' owners: Lump-sum payoff of an outstanding $71 million loan; sign 30-year lease, pay $4 million annually; $20 million repair fund.
• On the ballot: Requires approval by 50 percent plus one voter -- a simple majority.
• Next vote: Sacramento County supervisors, today, on whether to place the funding measure on the Nov. 7 ballot.
About the writer:
The Bee's Mary Lynne Vellinga can be reached at (916) 321-1094 or mlvellinga @sacbee.com.
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