Commentary: Local tax hikes cleverly packaged

Over the past few years, voters in hundreds of California cities and other local governments were asked to pass tax increases, and indications are that another big batch of local tax measures will be on this year’s ballots.

All but a handful of the previous tax hikes were approved, although one failed sales tax, in Coalinga, was unique. It lost by just 33 votes because of an overwhelming vote against it by residents of Coalinga State Hospital, an institution for the mentally ill, who apparently didn’t want prices to rise for their personal sundries.

One could conclude that the high passage rate for most cities reflects voters’ faith that those they elected to city councils and other governing bodies would spend the additional tax revenues wisely.

Perhaps so, but they also reflect some very clever, even propagandistic, packaging of the tax proposals by political consultants who boast of their ability to overcome resistance to such measures.

Local governments cannot, by law, directly finance campaigns to win voter approval of new taxes. However, local officials can – and quite often do – hire consulting firms to test voter sentiment in advance, design tax proposals to give them the best chance of winning approval, and design supposedly educational mailers and other materials that portray the taxes in positive terms.

How far they can go without running afoul of the law is uncertain. The California Taxpayers Association accused one city, Carson, of stretching the law last year by publishing a “full-color campaign-style mailer” to pass a special tax on the local oil industry.

One of the leading consulting firms, The Lew Edwards Group, claims to have helped enact tens of billions of dollars in local tax increases, saying in one presentation it would provide “accurate, on-point public opinion research that effectively assesses your constituents for their attitudes and practices” and “nationally recognized, award-winning public agency communications materials.”

Passing local tax measures has become big business, and California voters will face another barrage of proposals this year because cities are facing unprecedented fiscal crises, born mostly of rapidly increasing demands by the California Public Employees Retirement System (CalPERS) for more money to shore up its shaky finances.

However, based on how these local tax measures have been packaged by Lew Edwards and other consultants in past years, this year’s voters won’t be told that more of their money is needed for pensions, because that wouldn’t sell very well.

What does sell, according to the polling that Edwards and others conduct, is “public safety,” along with fixing local streets and roads. Therefore the demands for more pension funds are typically reconfigured in tax proposals as bolstering police and fire protection.

It’s a half-truth because the biggest drivers of pension spending are benefits for police officers and firefighters. Their pensions can approach, or even exceed, 100 percent of their salaries, and they are costing close to 50 cents for every dollar of salary now, and costs are still rising.

Typically, too, the “public safety” mantra is amplified by campaigns financed by public employee unions. Or, as one how-to article in a public agency management publication put it, “The city’s message needs to be supported by a political side that doesn’t have the same advocacy limitations a city does.”

As the local tax wave continues to build, it will eventually hit some limits, not only because voters’ appetites for paying more are finite, but because state law caps the combined sales taxes of all local agencies to two cents per $1 of purchases.

The wave could flatten, too, if the underlying pension costs that are driving tax proposals get more media and public exposure.