Terry Lamphier: Taxing times, again | TheUnion.com

Terry Lamphier: Taxing times, again

Other Voices
Terry Lamphier

In 2018, voters will likely be voting on local and state tax proposals, accompanied by the typically simplistic pro/con arguments. While higher taxes can be good and even desirable if you get what’s promised, this is not always the case and Grass Valley voters should keep this in mind with the City’s new tax increase proposal.

One glaring example: a few years ago, voters passed a state gas tax increase that was supposed to be used to improve California transportation. Proceeds were later diverted by the legislature into the State’s all-purpose general fund, making said funds unavailable for transportation uses.

Grass Valley’s recent history with tax money management is no less colorful, but not as well known. Years ago, Grass Valley and Nevada City both proposed tax increases. Nevada City’s proposed uses were well defined; Grass Valley’s were not. Nevada City’s passed, while Grass Valley’s failed but was later resurrected, improved with better definition and a promise of citizen oversight and ultimately passed.

During the same time frame, tax-related Redevelopment Agencies statewide were ordered dismantled. The original premise for redevelopment agencies was to use any collected taxes to invest in blighted areas, the idea being that renovated business areas would generate new tax revenue that would offset loss of sales tax revenue that ordinarily would have been distributed to the State, host cities and counties, and local schools and special districts.

Is this good enough? We’ve been down this road before – the Dorsey bonds — and taxpayers deserve more.

RDA’s statewide got a little too creative with use of tax money and the State ordered them dissolved. Their dissolution was intended to restore any collected tax monies, including proceeds from the sell-off of any RDA holdings, to the original aforementioned agencies. In Grass Valley’s case, according to then County Auditor, nearly 50 percent of recovered funds would go back to our local schools.

As an appointed member of Grass Valley’s Redevelopment Agency Oversight Committee, I was intimately involved with oversight of dissolution of the City of Grass Valley’s tax investments and subsequent redistribution of tax monies. While the rules from the State were dense, poorly written and under constant change, myself and our local school district’s RDA committee representative correctly interpreted State regulations and, though we were frustratingly outvoted by the City-dominated RDA committee majority, supported by the Nevada Irrigation District representative, our minority positions were consistently later upheld by the State on review.

For one example, State rules dictated that any City properties purchased with tax money were to be sold and the proceeds disbursed unless the property was in active use for government purposes. The local RDA oversight committee majority incorrectly voted to keep some vacant lots but the State overruled, forcing sale and recovery of money.

A more significant example was the use of nearly $6 million in Redevelopment Agency bonds, originally issued for “streets, water, sewer, drainage … curb and sidewalk improvements (handicap access) … public parking … beautification of public spaces”, etc. (“Implementation Plan for the Redevelopment Plan for the Grass Valley Redevelopment Project Area”, Resolution 06-03B) that was instead transferred to close the City’s Dorsey interchange funding gap. These bonds are essentially loans with interest and repayment is through future City tax collections, so in essence, taxpayers subsidized the interchange instead of getting our streets fixed.

Despite a Superior Court Judge’s ruling that this altered use was appropriate (“Judgement of Validation, Sean Dowling, July 29, 2011”), the State overruled the Judge and a later Oversight Committee’s majority vote of support, stating that the bond use was for Dorsey was “not permitted” (Dept. of Finance, May 5, 2013; bonds were later recalled and new bonds issued).

The City’s new move to raise taxes is being promoted as providing increased funding for enhanced police and fire services, typically a popular use. However, the tax proposal surfaced shortly after a City Council meeting where our local police force stated their intention to purchase and install surveillance cameras at various city locations and purchase at least one surveillance drone. While this may be palatable with some voters, others will assuredly have concerns.

Soon the City will be circulating petitions to put the tax proposal up for a vote. The City’s “notice of intent to circulate petition” (The Union, Dec. 13) states that it will be a “general tax” and the City is not legally bound to use the funds in the ways they propose. The proposal doubles the earlier temporary tax and makes it permanent.

Is this good enough? We’ve been down this road before – the Dorsey bonds — and taxpayers deserve more.

Terry Lamphier, a former Nevada County supervisor, lives in Grass Valley.

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