The sales tax history of the State of California, and the City of Manteca in particular, tells part of a sad, sad story.
In 1978, California voters staged what has been described as a property tax revolt by approving a statewide ballot initiative known as Proposition 13.
Proposition 13 followed many years of rapidly rising real property taxes in California. From fiscal years 1967-1968 to 1971-1972, revenues from these taxes increased on an average of 11.5% per year. See Report of the Senate Commission on Property Tax Equity and Revenue to the California State Senate 23 (1991) (Senate Commission Report). In response, the California Legislature enacted several property tax relief measures, including a cap on tax rates in 1972. Id., at 23-24. The boom in the State's real estate market persevered, however, and the median price of an existing home doubled from $31,530 in 1973 to $62,430 in 1977. As a result, tax levies continued to rise because of sharply increasing assessment values. Id., at 23. Some homeowners saw their tax bills double or triple during this period, well outpacing any growth in their income and ability to pay. Id., at 25. See also Oakland, Proposition 13—Genesis and Consequences, 32 Nat. Tax J. 387, 392 (Supp. June 1979).
By 1978, property tax relief had emerged as a major political issue in California. In only one month's time, tax relief advocates collected over 1.2 million signatures to qualify Proposition 13 for the June 1978 ballot. See Lefcoe & Allison, The Legal Aspects of Proposition 13: The Amador Valley Case, 53 S. Cal. L. Rev. 173, 174 (1978). On election day, Proposition 13 received a favorable vote of 64.8% and carried 55 of the State's 58 counties. California Secretary of State, Statement of Vote and Supplement, Primary Election, June 6, 1978, p. 39. California thus had a novel constitutional amendment that led to a property tax cut of approximately $7 billion in the first year. Senate Commission Report 28.
(Ref: U.S. Supreme Court opinion, NORDLINGER v. HAHN, 505 U.S. 1 (1992)*)When property owners passed Proposition 13 in 1978, the State of California, the counties, the cities, and the school districts all experienced a huge and immediate decline in revenues - and faced a future without the windfalls of the past. They were used to the "fat" and must now make do with the "lean."
Municipalities started diverting the skinnier local property taxes into project-restricted Redevelopment Agencies (RDAs) to keep it from going to Sacramento. School districts cried "Foul" and another proposition was passed to lock in a fixed percentage of the state general fund allocated to education. A system of pass-throughs was implemented to equalize the distribution of money and other sources of revenue became a government survival imperative.
One of those sources was ad valorum sales tax - raise the rates and keep raising them. Leading up to 1994, things got so bad where the people live that the state added a half-cent increment to the sales tax collections, earmarked for Local Law Enforcement (Counties and Cities).
The City of Manteca decided, leading up to 2007, just before another real estate bubble burst and recession ensued, that another half-cent sales tax was the ticket. They were using sales tax breaks as chips in a bidding war against nearby cities to woo big retail business into the new but empty shopping centers lining Hwy 120. The trouble is that they were already "locked in" to some long term and overly generous labor contracts, especially those of the public safety service unions. To both play (shoveling tax breaks out the back door) AND pay (front door revenues to sustain high local law enforcement costs), Measure M(orphine) was just the injection needed to sustain the frenetic activity. The voters were convinced to supply the drug.
However, the problems with morphine are: it is addictive; it only treats the pain, not the condition; and, it does not heal terminal patients. An overdose may just kill the patient outright - or incite the geese that lay the golden eggs to vigorously attack the profligate patient!
Voters are now being bombarded with, "Wait! Can't we just trade - or add - marijuana and morphine? Couldn't that solve our revenue problems?" See Proposition 19 - Legalizes Marijuana in California. Why not add another "sin tax?" Why not condone drug use while chasing the almighty $$$ ? Vote NO.
Thrusts, feints, strikes and parries, counter-strikes and hosts of other maneuvers continue to this day over the raising and distribution of various taxes, fees, and other euphemisms for the citizens' money. See Proposition 22 - Prohibits the State from Borrowing or Taking Funds Used for Transportation, Redevelopment, or Local Government Projects and Services. Initiative Constitutional Amendment. (And everybody thinks water politics is bad in California? Money politics is worse!)
Tough Love
The solution is to pare the government back to where it performs only the duties delegated to it by the sovereigns - the citizens. All other programs, transfers, activities, etc. need to be jettisoned or truly transitioned back to private interests. "Privatize" is merely a code-word for government out-sourcing, where the money is collected or paid by government out to a private firm - the money still goes through the government's books. Except for specifically delegated and essential services, do not let government touch the money! Every time it does, the money or service comes back to you in a diminished fashion and constitutes an interference in the economy.
When this approach to limited, efficient government is made to work, the repeal of Measure M(orphine) could be achieved.
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* Court humor: In the Supreme Court opinion referred to, above, Justice Blackmun used these words to sum up the position of protecting current homeowners from upward spiraling property taxes versus those who newly buy a home with the higher assessment values and, thus, higher beginning propertry taxes:
In short, the State may decide that it is worse to have owned and lost, than never to have owned at all.
It is a humorous, but true, adaptation of Alfred Lord Tennyson's poem In Memoriam:27, 1850:I hold it true, whate'er befall;
I feel it, when I sorrow most;
'Tis better to have loved and lost
Than never to have loved at all.
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