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Taxpayers Held Hostage

Over and over communities are told: Pass this bond issue or kiss high school football goodbye. This election year it's happening again.

By 10.13.06

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Many a school board across the land has used a timeworn -- if not honored -- tradition the day after the local school bond issue loses at the poll. The board announces solemnly that, as a result of the election loss, the high school football team will be eliminated next year.

The purpose of this is to shame and/or intimidate the voters into changing their votes at the next election and passing the school bonds. Some municipalities aren't waiting until after this year's election day. They are engaging instead in preemptive strikes.

Take the case of Eureka, a modest-sized county seat on California's north coast -- redwood country. Like many California cities it has had to make do with less money than was due it for a dozen years now. That is how long the state has been helping itself to funds collected on behalf of counties and cities. It has been doing this to try to pay for the profligacy of the state legislature and the there's-no-tomorrow attitude of voters who pass initiatives and referenda that sound good, but are ruinously expensive.

In 1994, to make up for the lost revenue, Eureka added a three percent surtax on utility bills for residences and businesses. It is now before the voters for renewal. (As Ronald Reagan once said, "There is nothing quite so permanent as a temporary tax.")

This is where the preemptive strike comes in. First the city's Finance Advisory Committee was asked to assess the impact of a defeat of Measure U at the polls. City department heads were to detail the impact of a seven percent across-the-board cut in funds (the utility surtax brings in $1.4 million annually).

Then, during the late summer the city manager made the rounds of civic organizations. He was careful to point out that he was not speaking for or against the measure, but simply "explaining" the probable cuts in service that would occur if it failed.

Next, the fire chief hit the rubber chicken circuit. He said reaction time to emergencies would suffer and there would be more injuries and deaths as a result of the shutdown of equipment. The police chief did the same. Drug-related crimes would increase. Gang violence would become a bigger problem. As a postscript to all this, an assistant city manager bemoaned the impact on the city's children. A youth center would close. No more summer swimming or roller skating program.

You get the point: It's deja vu all over again, as in no-more-high-school-football.

It doesn't have to be that way, critics say. One points out that the city's population has declined by three percent over the last 10 years, while the city staff has increased in size by 14 percent and the general fund budget by 51 percent. The city's budget, adjusted for inflation, equals $562 per capita, which is 69 to 98 percent greater than that of nearby cities.

The city is owed several million dollars by its redevelopment agency which, in turn, owns a good deal of unused land. Because of a quirk in the law, the redevelopment agency does not have to pay back the city loans it received so long as it operates at a deficit. You will not be surprised to learn that it manages to operate at a deficit year after year and much of the land it has acquired remains undisturbed. Collect the loans and sell the land, the critics say, and the proceeds would more than make up for the loss of funds from the utility tax for years to come.

City officials say extension of the tax is needed because of the state raid on funds. Yet, the nearby cities have had the same problem and have much lower per-capita budgets. Furthermore, there will be relief beginning next July, when a ballot measure that passed in 2004 will sharply reduce the state's pick-pocketing of municipal funds.

While the national media are obsessed with Rep. Foley's e-mails to House pages and North Korea's outrageous behavior, the folks in Eureka, California -- like voters in many other communities -- are focusing on local bread-and-butter issues.

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About the Author
Peter Hannaford was closely associated with the late President Reagan for a number of years. He is a member of the board of the Committee on the Present Danger. His latest book is “Presidential Retreats.”