45 Cents of Service for Every $1 of Taxes

The deal offered to property owners for a LLAD tax hike provides only 45 cents of service for every new dollar of taxes. (The LLAD, or Landscape and Lighting Assessment District, is a parcel tax assessment.)

The LLAD tax currently collects $18 million a year. The council's proposal to homeowners, commercial property owners and even churches would increase the City's take to $28 million. In addition, annual increases after that would be automatic.

How will the council spend the new $10 million? The answer is in the city administrator's March 28, 2006 report:

"The proposed LLAD increase would generate an additional $10 million of which $4.3 million of that amount would replace the gap funding from other sources already appropriated by the City Council in the FY05-07 Budget. Approximately $1.02 million would continue the additional support for park and tree maintenance funded directly by the General Purpose and Capital Reserve Funds from one-time sources. An additional $0.2 million would cover the increased County Administration fee for Assessment Collections. The remaining approximately $4.48 million is proposed to be allocated as shown in the draft budget (Exhibit C)." (Pages 1-2, emphasis added)

What is "gap funding from other sources"? As the City's adopted budget for 2005-07 explained last summer, "In FY 2005-06, a General Purpose Fund surplus from the prior fiscal year (FY 2004-05) will be used to bridge the $3.0 million gap." (Budget transmittal letter, p. 17)

For the entire history of Oakland until a LLAD tax was created in 1989, the City took care of parks and street lights out of the general fund. That's what city governments are supposed to do: maintain public safety and basic infrastructure. Now, however, councilmembers are horrified that the City used general fund money to help maintain parks and street lights. They want that money back. And so, in the City's own words quoted above, of $10 million of new money being sold in the name of parks and lighting, the council will allocate only $4.48 million for park and street light services.

Thus, less than 45 cents of each new tax dollar will enhance park and street light services. A majority of the new money, 55 cents on the dollar, provides no new park or street light maintenance. Meanwhile, the general fund will receive millions of dollars for councilmembers' politically motivated grants to social programs and subsidies to favored developers like insider Phil Tagami.

The council adds insult to injury by demanding the extra money for pork barrel purposes even as they rush to spend an $8.5 million budget surplus.

Is this really a surprise from the council that sold Measure Y taxes with a commitment to 802 police? We actually have fewer police than when the council wrote Measure Y, but the City collects the tax nonetheless, also freeing up general fund money for pork barrel giveaways.

The city council must think that all Oakland homeowners are rich. The LLAD tax, like Measures Q and Y and all other parcel taxes, is regressive. Every homeowner pays basically the same amount, no matter whether the house is a palace in the hills or a cottage in the flatlands, no matter whether your income is $50,000 a year or $500,000 a year. Perhaps an increase of $40 or $50 a year looks small, but the total of special assessments on your property tax bill is a seriously large amount, and the councilmembers keep piling it on. Every election seems to bring more parcel taxes. This is wrong. Homeowners and small businesses cannot remake Oakland society; they cannot finance the endless programs and agency grants that councilmembers love to hand out. The LLAD tax hike is another step in the wrong direction.

It is time to call a halt to the council's parcel tax mania. Property owners will receive their mail-in ballots, along with a City brochure stacked in favor of a tax increase, shortly after May 5. Let's return the ballot with a NO vote!