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Jarvis Tax Reform 6/20/92 [OA 7575] [2]
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Jarvis Tax Reform 6/20/92 [OA 7575] [2]
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26
22
6
2
"California's Organization of Tax Fighters"
Taxing Times
The Official Newsletter of the Howard Jarvis Taxpayers Association
Howard Jarvis, Founder
Fall 1991
PROP. 13 IS 13; WILL IT SEE 14?
John Barr for Taxing Times
High Court Agrees To Hear Prop. 13
Challenge, Then Macy's Withdraws Suit
treatment after the company's 1986
TAXPAYERS WAGE 100 HOUR
WAR ON DEPT. STORE CHAIN
reorganization forced a reevaluation of
its property at Sunvalley Mall, had been
On June 3. word that the United
rejected by three California courts in-
States Supreme Court would hear the R.H.
cluding the state Supreme Court. Legal
Macy and Co. challenge to Proposition
experts agreed that if Macy's pre-
13 sent shock waves through California
vailed, they would succeed in over-
homes.
turning Proposition 13 protections for
Macy's suit was one of three chal-
homeowners as well.
lenges filed against Proposition 13 after
On learning the Macy's case would
HJTA goes
the U.S. Supreme Court had ruled in a
be heard by the U.S. Supreme Court, there
on the
1989 West Virginia case that.a county tax
was a spontaneous eruption of outrage by
offensive.
policy, with similarities to Proposition 13,
California taxpayers that would have made
Estelle Jarvis and
was in violation of the equal protection
Howard Jarvis and Paul Gann proud.
Joel Fox with copy
clause of the United States Constitution.
Macy's was deluged with angry calls and
of the six page
The Macy's suit, charging unfair tax
See PROP. 13 IS 13, Page S
"Don't Blame
Proposition 13"
ad that ran in the
H.LTA GOES TO COURT TO EIGHT
on June 13. Joel
holds a seventh
SCHOOL ASSESSMENT DISTRICTS
page, with
additional names,
Districts Begin To Back Down
the Fullerton school district cancelled
which ran in both
efforts to impose an assessment. A week
"Don't Blane
the Bee and
HJTA has filed suit against the
later, Huntington Beach and three other
Proposition
Sacramento Union
Orange Unified School District to overtum
school districts that had combined to
on July 8.
a recently created maintenance assessment
create an assessment district, rescinded
district for school facilities.
their action under threat of HJTA legal
"This is an arrogant attempt by the
challenge and continuing citizen protest.
school district to circumvent Proposition
Proposition 13 requires a two-thirds
13's requirement for a vote of the people
vote for local special taxes. those taxes
for special taxes," stated HJTA president
which are earmarked for a particular
Joel Fox at a July 30 news conference at
purpose. The Orange Unified School
the Orange County Court House.
District and nearly a dozen other school
Commenting on the escalating growth
districts are attempting to use the author-
in the number of these school assessment
ity of the 1972 Landscaping and Lighting
SENATE COMMISSION WOULD
districts in recent weeks, Fox said, "Our
Act to levy a "fee" for the maintenance of
lawsuit is the penicillin for the raging tax
school facilities. "We believe this is an
OVERHAUL PROPERTY TAXES
assessment epidemic running wild in
outrageous perversion of the landscaping
California. We filed against the Orange
and Lighting Act, and we are confident
Longtime Homeowners
As HJTA members know, the 18
Unified because, to our knowledge, it was
the court will agree," said Fox.
the first to approve this new burden for
The 1972 act was intended to allow
member Senate commission was estab-
Would Pay More
lished last year by legislation sponsored
taxpayers. If the court rules for the
assessment districts to be formed for
On June 13 the Senate Commission
by Senator Gary Hart. HSTA opposed
taxpayers, we expect this to invalidate
property related services such as sheet
lighting. The measure's author, State
on Property Tax Equity and Revenue re-
the commission's creation, seeing it as a
assessments by other districts as well."
leased its long awaited plan 10 change
ploy to promote property tax increases.
HJTA is also preparing other suits.
Senator Robert Beverly, has called these
See COMMISSION, Page 6
The day after HJTA filed against Orange,
See ASSESSMENT, Page 7
Proposition 13.
Howard Jarvis Taxpayers Association
Nonprofit
621 S. Westmoreland Avenue Dept. 2526
Organization
Los Angeles, CA 90005-3971
U.S. POSTAGE
Taxing Times
PAID
Howard Jarvis
GOV. WILSON
Taxpayers
Association
Published quarterly by the Howard Jarvis Taxpayers
Association (HITA) and the American Tax Reduction
WRITES TO
Movement (ATRM). Kris Vosburgh, Editor.
HJTA MEMBERS
Members of HJTA and ATRM enjoy
dual
HEADQUARTERS
See Page 6
621 Westmoreland Ave.
Los Angeles, CA 90005-397
Photo Copy Preservation
PAGE 2
TAXING TIMES
TAX
THE LEGAL FRONT
PRESIDENT'S MESSAGE
CON
i
the
mon
page
By Trevor Grimm, HJTA General Counsel
The Tax Revolt is rising again.
affili
On the heels of the recession, state
HJTA Files Lawsuits Over New Property Taxes
Con
and local government have made the
and
decision to turn to the taxpayer for more
As part of the ongoing fight to preserve the integrity of Proposition 13,
funds to balance their budgets. It is a
HJTA has filed suits against the City of Los Angeles and the Orange Unified
truism that government budgets are
Cha
School District.
always balanced by cuts. The question
Rob
The suit against the City of Los Angeles was made necessary when the
is, will government cut its budget or will
Assi
city increased its real estate transfer tax by over 800 percent! Bringing the
the taxpayers have to tighten their
Univ
lawsuit for HJTA are attorneys with the Pacific Legal Foundation, its longtime
belts? Unfortunately, the taxpayers usu-
tax fighting ally.
Vice
ally end up as the victims. This year is
The plain language of Proposition 13 prohibits real estate transfer
Kirk
no exception.
taxes. Section 4 permits local government to increase "special taxes" with a
Presi
HJTA is fighting back.
two-thirds vote "except ad valorem taxes on real property or a transaction
of C
The assessment district problem we
tax or sales tax on the sale of real property within such City, County or
special district."
have warned about for years is starting to
Davi
get some media attention. School districts.
Form
Until recently, local governments obeyed Section 4 and did not impose
have latched onto the "lighting and land-
new or increased real estate transfer taxes. Then, relying on another court
created loophole in Proposition 13, a Court of Appeal in Oakland said that real
scaping" assessment district as a way to
to write such a law and we are determin-
Iren
raise funds. We think this is an illegal and
estate transfer taxes were legal as long as the revenue was placed into the
ing if the practice has spread to the point
Presi
outrageous use of the law and HJTA has
"general fund" of the city or county levying the tax. HJTA believes that case,
where enough outraged taxpayers will
Sena
Cohn V, City of Oakland, ignored the specific language of Proposition 13 and
begun filing lawsuits against it.
support a costly initiative effort.
State
In Ventura County's Port Hueneme,
violated several rules of legal interpretation.
The state tax situation is well known
the city council used the same law to raise
Because of the devastating effects of the Cohn case, HJTA tried unsuc-
to HJTA members. A record $7.5-billion
Jack
what amounts to a "view tax." The better
cessfully to convince the California Supreme Court to review it.
was raised to help close a $14.3-billion
Vice
When the City of Los Angeles imposed its own tax hike, HJTA saw this
view you have of the ocean, the higher
deficit. The money will come from sales
Loca
as an opportunity to challenge not only an ill-advised, grossly excessive new
tax you pay. Our attorneys are assisting
tax, vehicle fees, and income tax increases
in a lawsuit against the view tax. If this is
on higher earners.
Sena
property tax, but also an opportunity to challenge the Cohn decision. Simply
not stopped, who knows what will be
put, the Court of Appeal in Los Angeles is not bound by the Court of Appeal
We have invited Governor Pete
State
taxed next?
in Oakland. Moreover, if HJTA can create a "conflict" among the Courts of
Wilson to address the issue of the budget
Gera
Appeal, this would increase the chance that the California Supreme Court
In other communities, we have given
deficit and the tax increase for Taxing
Coun
would have to resolve the issue once and for all.
advice and support to local activists. We
Times readers. His article appears
Why should HJTA members be concerned about this issue? Even if you
have found from experience the most
on page 6. Judge the Governor's case
Mau
have no current plans to sell your house, chances are you will eventually. A
influential lobbyists of local governmen-
for yourself.
Presi-
tal bodies are local residents who will be
real estate transfer tax is really a tax imposed on your property now, even
(To find out how your representa-
Calif
though it won't be collected until your sell your house. Moreover, higher tax
forced to pay the new tax or assessment.
tives voted on the new taxes, please see
(Now
burdens reduce the value of your property. In short, by imposing this onerous
HJTA is also supporting a bill intro-
the Sacramento Report on page 4.)
Deve
tax hike, the City of Los Angeles has lowered the value of property as well as
duced by Senator John Lewis (R-Orange)
I believe there will be a move to lower
unfairly hurt the current real estate market.
which will require a two-thirds vote of
some of the new taxes as the economy
Patsy
the people for the school assessment dis-
To cut off another end-around Proposition 13 by local officials, HJTA
breaks out of recession, and to guarantee
Teac:
attorneys have filed suit against the recently created maintenance assessment
tricts. We are asking all HJTA members
the right to vote on assessment districts
district (MAD) through which the Orange Unified School District is attempt-
to write their, legislatorsinsupportofthe4sassthe1992election-year approaches
Lewis school assessment bill, which,
HJTA will be active in these efforts.
BLAP
ing to impose an annual $50 levy to maintain school facilities.
unfortunately, did not have a bill number
A final note. I want to thank all of
charg
Proposition 13 permits local governments and special districts to impose
at press time.
"special taxes," but only with a two-thirds vote of the people. The school
those who contacted state representatives
from
The final solution is an initiative to
district has attempted to circumvent Proposition 13 by using the authority of
protesting bills that would undermine
to $3
firmly give, the taxpayers a right to vote
Proposition 13. Your cards and letters
I
the 1972 Lighting and Landscaping Act which allows assessments for certain
on these newly created assessment dis-
property related services.
are critical to our effort to preserve
devic
In three causes of action, HJTA's suit charges the maintenance assess-
tricts. Our lawyers are studying the ways
Proposition 13.
Il
which
gland
ment districts lack statutory authority, violate the constitutional special tax
in ser
provisions of Proposition 13 and constitute an illegal double property tax.
assurance that even those on fixed incomes
property taxes provide $8.5-billion a year
gener
Since HJTA filed suit against Orange Unified, several other districts that
can remain in their homes.
(1988-89) for cities, counties and special
lands
approved MADs have rescinded them, and several more that were considering
Before Proposition 13 passed
districts, other taxes and fees, not in-
ment
creating MADs, have had a change of heart.
Californians were in the same predica-
cluding sales taxes, supply an additional
1978
As "Taxing Times" goes to press, HJTA has just filed suit against the
ment President Bush now finds himself.
$6.5-billion year.
ures,
Whittier Union High School District, which has also imposed a MAD on
Recently, an assessor announced the
Business license taxes. hotel/motel
set as
local taxpayers.
President's Maine home had increased in
taxes, and utility user taxes have jumped.
such
(For more on assessment districts see "HJTA Goes to Court..." page 1.
value about 250%. Without a major
The utility user tax revenue has gone from
have
For update on HJTA efforts to defend Prop. 13 against "equal protection" suits
decrease in the tax rate, the President's
just over $200-million before Proposition
see "High Court..." page 1.)
property tax bill is about to sky-rocket.
13 passed to over $777-million in 1988-
entie
In California, because of Proposition 13,
89, a 250% increase in increase. Service
the
property owners are protected against such
See BLAME, Page 11
reven
This column appeared in the May 31, San Diego Union
unpredictable increases.
Sales
CORRECTIONS
I
Don't Blame Prop. 13
It also has provided substantial and
stable funding for local government.
on Il
New figures compiled by the business-
In our rush to get out the summer
Prope
by Joel Fox
sponsored California Taxpayers Assoc-
1991 issue of "Taxing Times" and keep
Supre
iation from records in the state Board of
our members abreast of fast moving
Pries
With California now facing over a
feel government does not get enough of
Equalization and the state Controller's
events in the Capitol, we made the fol-
$14-billion deficit, supporters of big
the taxpayers' money. Proposition 13
office paint a clear picture of healthy
lowing errors:
passe
could
government are certain where to place
co-author Howard Jarvis once said gov-
revenue streaming into local coffers.
Page 7. In the story on the Cali-
effect
the blame: Proposition 13.
ernment officials would blame the erup-
Property taxes for cities, counties, and
fornia Poll we incorrectly reported that
would
Proposition 13 passed as an initiative
tion of Mt. Saint Helens on Proposition
special districts were $4.7-billion the year
a 1/2 cent sales tax increase was op-
cation
in 1978, cutting property taxes by nearly
13 if they could. and he was right.
before Proposition 13 passed. The first
posed by 57% of respondents. In fact,
take
60% and setting up restrictions for prop-
Ugly charges continue to be made
year under Proposition 13 property tax
57% found a 1/2 cent sales tax increase
ing.
crty tax increases, as well as tough bar-
against it. At a recent Sacramento rally,
collection for these government divisions
acceptable while 40% did not. The
than
riers for increased state and local taxes.
sponsored by the state teachers' union,
statewide dropped to $2.3-billion. How-
other figures we published were correct
sition
Since that time, Proposition 13 has
Jesse Jackson declared Proposition 13 a
ever, in 1988-89 property taxes have
56% objected to a 10% income tax
I
been a handy scapegoat for those who
"Scud missile which must be blown from
swelled to $8.5-billion, or a 271% increase
increase and 67% were opposed to a
Califi
the sky."
despite Proposition 13's restrictions.
10% property tax increase.
obvio
See Page 4 for
The truth is Proposition 13 has been
But that's only a part of the local
Page 8. In typesetting the column
states
Sacramento
good for the taxpayers of California. Not
revenue picture. Bureaucratic creativity
"The Bomb in Wilson's Budget Plan,'
much
only did it save people's home and prop-
turned to other methods of raising revenue
which had appeared in the Los Angeles
vider
Report
crty. it relieved them of the fear of rising,
when Proposition 13 checked the unre-
Times, Joel Fox's by-line was inad-
with
out-of-control taxation, while giving the
stricted flow of property taxes. While
vertently deleted.
the
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Photo Copy Preservation
PAGE 4
TAXING TIMES
HOW THEY VOTED
INCOME TAX
SALES TAX
VEHICLE TAX
Sacramento Report
SB 169
AB 2181
AB 758
NOT
YES
NOT
SENATE
NO
NO
YES
NOT
YES
NO
VOTING
VOTING
VOTING
By Steve Carlson
Alquist
.
.
.
HJTA Legislative Advocate
Ayala
.
Bergeson
.
Beverly
.
Boatwright
.
Calderon
.
BLOODY BUDGET BATTLE
Craven
.
.
Davis
.
.
Deddeh
.
.
.
Dilla
In a very rough debut for Governor Wilson, the 1991-92 budget was
C. Green
.
approved minutes before midnight on July 16th, over a month after the
B. Greens
.
.
L.Greene
.
.
constitutional deadline and more than two weeks after the beginning of the
Hart
.
.
.
1991-92 fiscal year.
HIII
.
Faced with a deficit exceeding $14 billion, Wilson pushed through a
Johnston
.
Keone
.
combination of spending cuts and tax increases. Needing a two-thirds vote for
Killea
.
.
approval of new taxes as required by Proposition 13 - the Governor was
Kopp
.
Leonard
.
able to corral the votes of barely enough lawmakers to pass his program.
Leslie
.
The major elements of the state tax increases were contained in two bills,
Lewis
.
.
.
Lockyer
.
SB 169 (Alquist) and AB 2181 (Vasconcellos). What good news there is,
Maddy
.
.
.
A
is that in the final tax package there is no general utility tax increase, no limits
Marks
.
McCorquodale
.
.
0
0
on the home mortgage interest deduction, and, most important, no new
Mello
.
property based taxes.
Morgan
.
.
e
Patris
.
.
.
Presley
.
a
The major provisions of SB 169 include:
Robbins
.
.
Robertl
.
.
Rogers
.
.
.
An increase in personal income tax rates to 10 percent for single
Rosenthal
:
.
.
.
Royce
.
.
-
persons making over $100,000 and couples making over $200,000
Russell
.
and 11 percent for singles making over $200,000 and couples
Torres
.
.
making over $400,000. The new rates expire at the end of the
Thompson
.
a
Vuich
.
.
.
1995 tax year.
Watson
.
.
.
NOT
NOT
NOT
ASSEMBLY
YES
NO
YES
NO
YES
Reduction of the renter's credit for high income taxpayers.
VOTING
VOTING
NO
VOTING
Allon
Alpert
.
Increase in the withholding rate-for supplemental wages.
Achie-Hudson
.
.
.
Andal
.
.
.
Arelas
.
.
.
Conformity to many provisions of the federal tax law.
Baker
.
.
.
Bane
.
.
.
Batos
.
0
.
Also approved were increases in the vehicle registration fee, the drivers'
Becorra
.
.
.
license fee and the vehicle license fee.
Bentley
.
Boland
AB 2181 is the one-and-a-quarter percent sales tax increase that also
Bronzan
.
.
removes previous exemptions for items such as snack foods,candy. bottled shres
r(Brown minute
19 -
-
Bruite
water, newspapers, magazines, and bunker fuel.
Burton
Votes of your Senate and Assembly representatives on SB 169,
Compbell
.
.
.
Cannella
.
.
.
.
AB 2181 and AB 758 (Bates), the vehicle license fee increase, are shown
Chacon
.
.
in the accompanying chart.
Chandler
.
Clute
.
Conhelly
.
Cortese
.
.
Costs
.
.
.
.
BILLS HOSTILE TO PROP. 13
Eastin
.
.
.
Eavos
.
Eldor
.
AWAIT ACTION
Epple
Farr
.
Felando
.
.
.
.
Forguson
At press time we had just entered the month-long summer legislative
Filante
.
recess. The legislature is due to return August 19th and adjourn on September
Floyd
Frazee
15th. Although we have disposed of or delayed most of the bills hostile to
Friedman
.
.
.
Prop. 13 and the initiative process, there are still some very important measures
Firzzelle
.
Golch
.
.
.
pending which we oppose.
Hannigan
.
.
As we have reported to you in the past, the three anti-Proposition 13
Hansan
.
Harvey
-
.
.
measures of greatest concern are ACA 4 (Klehs). ACA 6 (O'Connell) and SCA
Houser
.
.
.
8 (Hart). These will be considered at the end of the session. You will recall
Haydon
o
.
.
Horcher
-
that these bills deal with reduction of the two-thirds vote requirement at the
Hughes
.
0
.
local level for special taxes or increases in property taxes, either directly or
Hunter
Isenberg
.
.
.
through bonding authority. ACA 4 also reduces from two-thirds to majority
Johnson
.
.
the vote necessary for the Legislature to impose new state taxes. Your cards
Jones
.
.
Katz
and letters opposing these bills have had a major impact. We will continue
Kelly
our vehement opposition until these ill-conceived measures are defeated.
Klehs
.
.
.
Most of the bills hostile to the initiative process have been killed except for
Knowles
.
.
.
Lancaster
.
h
ACA 17 (Farr), which would increase the number of signatures needed to place
Lee
.
.
a constitutional amendment on the ballot, and SCA 9 (Roberti), which would
Lampert
.
o
Margolin
.
.
.
.
remove the ability to have a "severability clause" in an initiative. If SCA 9
Mays
.
.
o
were to pass this would mean that if even one minor provision of an initiative
McClintock
-
Moore
.
.
.
C
were found invalid by the courts, the entire initiative would be invalidated. We
Mounjoy
.
.
.
Murray
.
S
are strongly opposed to ACA 17 and SCA 9 and will continue to oppose these
.
.
Nolan
.
and future attempts to obstruct the access of California's citizens to the ballot.
u
O'Connell
.
Another bill that we, along with CalTax and the Contra Costa Taxpayers
Peace
.
e
Palonco
.
Association, strongly oppose is AB 394 (Campbell) which would permit a
Queckenbush
.
n
number of cities and counties to impose or increase property tax rates above
Roybal-Allard
.
.
.
Seastrand
Proposition 13's one percent limit to fund costs of their pension system. Our
y
Sher
strong opposition was responsible for the bill being tabled for this year,
Speier
p
Statham
.
although it will be back in January.
Tanner
0
.
.
In our next edition of "Taxing Times" we will report to you on how your
Tucker
.
representatives voted on the anti-Proposition 13 bills still awaiting action.
Umberg
Vasconcellos
.
Woodruff
.
.
Wright
Wyman
.
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PAGE 6
TAXING TIMES
TAY
Gov. Wilson Writes To Taxing Times
As taxpayers begin to feel the pinch of the new state levies, many
are asking about the thinking of the man they helped elect Governor
last November. Pete Wilson ran as a fiscal conservative, proudly pointing
sure
to his record as a tight-fisted administrator during the eleven years he WILL
desti
mayor of San Diego. But in his first seven months as Governor, he has
at the
overseen one of the largest tax increases in state history. While the rate
again
of increase in state spending has been cut from the 12.8 percent of last year.
I
spending is still up 7 percent.
Paul
How did this come about? Will the taxpayers receive something
anno
substantial in return for their additional sacrifices? Will reforms in the
1992
operation of state government assure that more tax increases will not be
initia
necessary next year?
I
HJTA has asked the Governor to respond to the legitimate concerns
prope
of taxpayers and HJTA members. The following column by Governor Wilson
is an exclusive for "Taxing Times" readers.
vote
chang
stitut
two-1
"To raise taxes goes against my every instinct."
Furth
infan
requi
By Pete Wilson
quali
Final.
Call 1991 the year of living dangerously. During my first six months as Governor,
California has faced a major earthquake, a killer freeze. a searing fifth year of drought
was more than twice as large as the one facing California this year. The increase in
visor
1967 took the top income tax bracket from 7% to 10% and also raised sales taxes and
peopl
and, most recently, a deadly herbicide spill. But none of these challenges compares in
the bank and corporations tax.
gover
magnitude or severity to that posed by the largest state budget gap in American history.
This year we rejected out-of-hand Democratic proposals to repeal income tax
out
In January, I took office to discover that California faced a $7 billion budget gap.
indexing, which would have automatically raised the income taxes of middle-class
powe
Lest anyone forget, let me emphasize that I did not create this gap. I inherited it.
Let me also remind readers of the wise requirement in our state constitution for a
Californians. After cutting spending by $5 billion, we were compelled to raise taxes
balanced state budget. Unlike the Congress, we in California wisely and properly
but chose only those taxes that would do the least harm to our state's economy and
competitiveness.
This
balance our income and spending. We can't and don't want to run a deficit to
mortgage our children's future.
I stood firm against all attempts to raise property taxes through the notorious
But that means that a new governor must balance the budget in one year even
split-roll. And I rebuffed attempts to repeal the present sales tax exemptions on food,
if that means closing a gap you inherited and even if that gap is one-third of the
medicine, and prescription drugs, or to extend taxes to services like dry cleaning, the
whole budget!
preparation of taxes, hair care, and medical treatment.
So, first you logically cut spending as much as you can without imposing
To protect California jobs, we rejected a proposed increase in bank and cor-
by
hardship.
poration taxes but secured a five-year extension of the research and development tax
In January, I proposed a plan to balance our budget that included more than
credit. We also took the first step toward workers' compensation reform, and secured
$4 billion in cuts and no general tax increases.
a five-year extension of the net operating loss carry-forward - tax relief of great
suit
But as the months passed and as the recession deepened and state tax revenues
importance to new small businesses struggling to survive.
Prope
continued to fall, the state's fiscal hole deepened from $7 billion to $12.6 billion. It
In fact, during this year's budget negotiations we achieved far more reform in the
grinds
bottomed out at $14.3 billion - a shortfall of nearly a third of our state's entire general
way state government does business than ever before in California's history.
fund. In fact, it was greater than the entire budget of all but ten other states.
To control costs, we demanded spending reform - and we got it. In fact, we've
To balance this budget we continued to look for cuts, but the more we cut the more
suspended cost-of-living increases throughout state government.
it became obvious that this budget couldn't be balanced by spending cuts alone. In
To make government more efficient, we are transferring health and social services
fact, if we were to close all our state universities, shut down every state prison, and
to the county level, SO that we can trim bureaucracy and cut red tape. It will both
even fire every worker on the state payroll, we still would not have cut enough
improve the quality of service and produce enormous taxpayer savings.
spending to balance this budget.
We are also reforming the state's public pension system to bring it in line with
And while many programs suffered deep cuts, I rejected more extreme measures.
similar benefits in the private sector. And I've appointed a taxpayers' watchdog to
I refused to release dangerous felons back to the streets or to jeopardize aid for the
as the employer.
blind, disabled and elderly.
To raise taxes goes against my every instinct, and against a long record as a fiscal
Finally, we reformed welfare so that the system will reward, not punish, those
conservative opposed to taxes and spending. As Mayor of San Diego, I cut property
who want to work. By reducing grants, for the first time in California history, we have
taxes substantially. In fact, when I was Mayor of San Diego, Howard Jarvis said, "If
rolled back part of the welfare state. Reform will save taxpayers $5 billion over the
they had all run their cities the way Pete Wilson has run San Diego, we wouldn't have
next five years. But more important, working mothers will be allowed to work another
organ prope state that plan teent! calls lawso intere matte the lated U.S. ( 1 S I
the ju
keep the board honest, and to gain control over what taxpayers are required to contribute
needed Proposition 13." And during my eight years as a United States Senator, I won
8 hours a month and keep their additional earnings. They will be able to teach their
the Watchdog of the Treasury Award every year.
children that welfare isn an acceptable, permanent lifestyle.
able
And I'm the same Pete Wilson who first imposed a spending limit on San Diego
No budget is perfect, and this - by common consensus was far and away the
and then helped Paul Gann put into place a similar limit on state spending.
most difficult and challenging in California's history. Neither taxes nor spending cuts
by
And you and I last shared a common cause last year when I endorsed Prop-
are welcomed by many Californians. But by acting fairly and responsibly now, we
osition 136.
have avoided even more painful taxes and spending cuts later. We have not only
But this wasn't the first time a conservative Republican governor was forced
balanced this year's budget but brought major reform, so that we can now set a new
to raise taxes to close an inherited budget deficit. During his first year in office,
course for California - a course that will allow us to achieve the golden promise of
discus
then-Governor Ronald Reagan was forced to sign a tax increase that, proportionally,
our Golden State effective and affordable public expenditures and prosperity for
13:
private citizens.
11
ASSI
COMMISSION, Page /
be maintained by lowering the countywide
The commission's recommendations
level with a simple majority vote, increas-
school
Three members of the commission. in-
tax-rate to level which would generate
ing the likelihood that tax increases on
"I nev
proved HJTA to be correct.
an amount of revenue equal to the prior
cluding the chair and vice chair, opposed
H
In the event that Proposition 13 is
property owners could be approved
year's revenue, "to be adjusted annually
splitting the tax roll saying it would drive
by voters who, because they own no
ment
overturned by the U.S. Supreme Court,
industry out of the state. Seven commis-
for growth in population and an appropri-
the Senate commission recommends a re-
property, would not be obligated to pay
well.
ate inflation index." In other words, taxes
sion members, who supported the plan.
the tax.
behine
turn to an inflation driven system, or as it
would increase with inflation and popula-
recommended that the Legislature initiate
Finally, the Senate commission rec-
Lewis
is known, "market valuation" for prop-
tion growth, and homeowners would
the changes without waiting for action by
crty. To accomplish this, the commission
ommends immediately reassessing all
a two
lose the predictability they enjoy under
the U.S. Supreme Court.
would increase the annual reassessment
business property, including apartment
the in.
Proposition 13, which limits tax increases
Regular readers of Taxing Times will
buildings, at market value (a split roll)
tenane
cap for longtime homeowners by two per-
know that HJTA President Joel Fox
to no more than two percent.
for a total tax increase of $5.9 billion.
requir
cent per year so that taxes would increase
led a team of experts that defended
While some recent home buyers
by four percent the first year, six percent
The commission did not deal with the
distric
might see a modest decrease in their taxes
Proposition 13 before the commission dur-
effect this could have on small businesses,
ducing
the second year. eight percent the third
at the expense of long time homeowners,
ing hearings last December (see Spring
the economy, jobs or price increases.
must
year and so on, until the assessment
their saving would be temporary as infla-
1991 Taxing Times). HJTA members
The commission justified its recom-
Comn
reached market value.
tion pushes everyone's taxes higher.
will be pleased to know that the six page
mendations for a tax increase saying that
venes
The commission claims that revenue
The commission would also allow
"Don't Blame Proposition 13" ad was run
neutrality for residential property could
overturning Proposition 13 would cause
memb
property taxes to be increased at the local
in the Sacramento Bee on the same day
over $11 billion in property tax increases.
Senate
See COMMISSION, Page 11
A
Photo Copy Preservation
Photo copy Preservation
4ES
TAXING TIMES
PAGE 7
Gann Proposes Initiative to Protect the Initiative
Proposition 137, HJTA's 1990 mea-
the legislature.
by citizens.
sure to protect the initiative process from
The Gann initiative to preserve and
law banning assault rifles is so technically
If legislators claim the process is out
destruction by the legislature was defeated
flawed that enforcement is not practical.
protect the initiative could not come at a
of control, they should look to their own
at the election, a victim of the backlash
The law was co-authored by Senator
more important time.
house and colleagues for a reason.
against the long ballot.
The initiative process is under threat
Roberti, and he has introduced "clean-up"
Perhaps the legislative attack against
Now Richard Gann, president of the
legislation to fix the problems. If he were
of drastic change from legislators who
the initiative is prompted by resentment
Paul Gann's Citizens Committee, has
operating under the provisions he wants
feel abused by the process. About 40 bills
over the term limit initiative.
announced he will circulate for the
initiative writers to work under, his law
to change the initiative were intro-
However, the real issue isone of power.
1992 ballot a new initiative to protect the
would be stricken from the books.
duced into the legislature. Most have
The legislators don't want to share law
initiative process.
been defeated. Steve Carlson, HJTA
Asecondbill requiring drasticchanges
making power with the citizenry.
HJTA is strongly endorsing this
on qualifying initiatives for the ballot is
Legislative Advocate is lobbying to defeat
Two noteworthy initiative "reform"
proposition.
also still alive. Assemblyman Sam Farr
those that remain.
measures are still under consideration as of
Gann's measure calls for a 75 percent
wants to increase the number of signatures
The most often declared justification
this writing. One, by Senator David Roberti,
vote in the legislature to pass any statutory
required to qualify a constitutional amend-
for changing the initiative process is the
among other things, would do away with
changes to the initiative process. (Con-
ment from 8% of the number of votes cast
lengthy ballot faced by the voters last
the severability clause. The clause, added
stitutional changes already require a
in the last gubernatorial election to 10%.
November. Voters and commentators ex-
to most initiatives, declares that if a section
two-thirds vote, plus a vote of the people.)
Richard Gann's initiative will protect
pressed frustration with both the number
"
of the initiative is found deficient by the
Further, the Gann initiative will repeal the
the citizens' right to make law in the face
of decisions to be made, and the complex-
courts, it shall be severed from the remain-
of these threats.
infamous Chacon bill passed in 1988 which
ity of the issues presented on the ballot.
ing law, which will stay in force. Roberti
required a greater number of signatures to
If you want more information about
The number of ballot propositions does
wants the whole law thrown out if one
qualify initiatives for the local ballot.
the initiative or want to sign a petition,
not mean we have too many initiatives.
section is found wanting.
Finally, the Gann measure allows for ad-
please write to Richard Gann at:
Twenty-eight propositions appeared on the
Roberti's bill declares that the citizen
visory initiatives which would allow the
ise in
state ballot in November. fter subtract-
lawmaker must adhere to a stricter stan-
people to express their feelings to the
and
ing those measures placed on the ballot by
dard than legislators who employ an
Paul Gann's Citizens Committee
government about important matters with-
legislative action, and those initiatives
experienced army of consultants and law-
9848-B Business Park Drive
out setting a law. This would be akin to the
e tax
sponsored by elected officials, only six of
yers to draft a law. Recently, Attorney
power of Resolution now enjoyed by
Sacramento, CA 95827
class
28 ballot propositions were sponsored
General Dan Lungren stated California's
taxes
and
This column appeared in the June 13, Los Angeles Times
rious
food,
11. the
13
Gets
Changed,
Back
to
Basics
cor-
by Joel Fox
and residential property, and a reassess-
estate market. There would be no reason-
seem to be a political impossibil-
at tax
ment of residential property to full
able relationship between ability to pay
Although the R. 11. Macy Co. law-
ity because of the need to impose a
cured
market value with a floating tax rate be-
and a property tax based on home value.
suit challenging the constitutionality of
replacement tax, probably on income
great
low the current 1%, which will produce
Increasing the taxes on long time
Proposition 13 has succumbed to a
or consumption.
no more revenue than is now collected
homeowners could place homeownership
in the
grinding bombardment of angry phone
Selling a new tax to the voters to
from homeowners.
in jeopardy for people on low and fixed
calls and cut-up credit cards, two other
replace the property tax appears politi-
The split roll system would place an
incomes. The solution, we are told, is to
lawsuits arguing that Proposition 13 vio-
cally impossible.
ve've
even greater burden on income producing
let these people live in the house until
lated the equal protection clause of the
Yet, looked at in the context of the
property, which already shoulders
U.S. Constitution are making their way to
they die, with the government claiming
history of property taxes, it may not
vices
two-thirds of the property tax collected in
pastdue tax revenue upon the sale of
both
the nation's highest court.
be hopeless.
California. The split roll may be the last
the home.
Because the court has expressed an
Property taxes originally were a good
straw for many businesses as they weigh
It is a heartless state which deprives
interest in challenges to Proposition 13,
test of people's wealth before the advent
with
the excessive cost of doing business in
citizens who have lived in, improved and
the justices are likely to consider the
of intangible property which evaded the
og to
California against the siren song of
paid taxes on their homes for years to be
ribute
matter sooner or later.
tax collector, such as stocks and bonds.
out-of-state business recruiters.
denied the pleasure of leaving them to
So as Proposition 13 passed its thir-
Farmers, whose land was readily available
A higher commercial property tax
their children or using their equity for
teenth birthday on June 6, some in the
for the tax collector to assess, started the
those
will be a tremendous obstacle to small
retirement or health emergencies.
movement toward income and other taxes
have
state were making plans to replace it.
businesses, which often operate on a small
As news, spread of this threat to
But, it won't be easy to develop a
to ease the burden of property taxes.
:f the
profit margin and cannot easily absorb
Proposition 13, the Howard Jarvis
Proposition 13 also eased the burden
other
plan that can be sold to a voting public
the tax or pass it on to customers.
Taxpayers Assn. was inundated with calls
that has come to expect a simple, predict-
of property taxes by reflecting an ability
their
The plan dealing with homeowners
from senior citizens asking whether they
able property tax system.
to pay property taxes at the time property
is even more disturbing. The floating tax
should sell their homes now - before
y the
One proposal was made public today
was purchased. In retrospect, Proposition
rate and reassessment to full market value
taxes go up and they. lose them to
cuts
by a divided state Senate Commission
13 may be just a step toward the end of an
means that long time homeowners would
the taxman.
archaic property tax system.
we
organized more than a year ago to study
pay more taxes and newer homeowners,
Proposition 13 was Howard Jarvis'
property tax equity.
If the court decides against Prop-
only
less. The protection of Proposition 13's
fourth attempt to change the property tax.
new
The plan relies on the two most often
osition 13, the property tax law will fall
inflation cap would be removed for all
His first effort, eliminating the property
se of
discussed "remedies" to fix Proposition
back into the chaos of the political arena
and, once again, property taxpayers would
tax, will be re-considered in light of
where best laid plans have met uncertain
y for
13: a split tax roll separating commercial
be at the mercy of an out-of-control real
the court challenges. However, this would
fates before.
ASSESSMENT, from Page /
district front has taken place in the coastal
school assessments farfetched, saying,
community of Port Hueneme, where the
in-
"I never intended this for the act."
city council has voted to impose a fee
osed
HJTA will be battling school assess-
based on residents' view of the ocean.
Drive
ment districts on the legislative front as
HJTA is providing assistance to local
mis-
well. HJTA is throwing its support
plan,
citizens and legal action is pending.
behind legislation by State Senator John
tiate
The special assessments will vary
Lewis which would specifically require
from $66 to $184 per year depending on
by
a two-thirds vote of the people before
proximity to the beach and will be used
the imposition of any future school main-
will
for beach clean up. Mayor Orvene
tenance assessment districts as well as
Carpenter has denied that the assessment
Fox
requiring a vote to renew any existing
aded
is a "view tax," saying "Even a blind man
districts. Because the deadline for intro-
living in an oceanfront home would have
dur-
ducing new legislation has passed, Lewis
to pay:" Local HJTA members have no
bring
must get a waiver from the Senate Rules
doubt. "This city would tax a potato if
ibers
Committee when the Legislature recon-
its eyes were on the beach," one resident
page
venes August 19. (We will keep our
commented.
run
members informed on the progress of
(For more on view taxes see Joel
day
Joel Fox and Senator John Lewis spoke to the press outside the Orange County
Senator Lewis' bill.)
Fox's column "The Sweet Things in Life
Court House after HJTA filed its suit against the Orange Unified School District
Another outrage on the assessment
Will Cost You Dearly" page 9.)
maintenance assessment district.
PAGE 8
TAXING TIMES
PROP. 13 IS 13, from Page /
letters, some containing cut up credit
quick to point out that the new resident is
cards, from angry customers who vowed
equally protected by Proposition 13 be-
never again to shop in any Macy's owned
cause taxes on the new home would be
No. 90-1912
stores (which include Bullock's and
capped at one percent of the value and
1. Magnin).
increases limited to two percent annually,
After a hundred hours of this bom-
just as for other homeowners. Before
In The
bardment, Macy's New York based man-
Proposition 13 the tax rate averaged 3
agement announced on June 7 that it was
percent and property was regularly reas-
Supreme Court of the United States
withdrawing its suit. "It has become clear
sessed upward as other homes in the
to that there is no way to guarantee
neighborhood sold at higher prices.
October Term, 1990
that pursuing this through the courts would
Thanks to Proposition 13 taxes are held
not ultimately have some effect on home-
at a reasonable level and the homeowner
STEPHANIE NORDLINGER,
owners," said Macy's representative.
will always know what his or her taxes
"Sometimes it pays to raise hell," said
are going to be.
Petitioner,
Estelle Jarvis, in tribute to those who had
V.
contacted Macy's.
HJTA WILL BE READY
HJTA President Joel Fox said, "We
are a little surprised but very pleased to
Attorney Jonathan Coupal, holder of
see that Macy's has come to their senses.
the Howard Jarvis Chair of Citizen/
KENNETH HAHN, in his capacity as Tax Assessor
Taxpayer Law with the Pacific Legal
for Los Angeles County and the
We were prepared for any eventuality,
Foundation, has prepared an amicus
COUNTY OF LOS ANGELES,
but this public outpouring of support for
Proposition 13 shows how important
curiae - friend of the court brief that
Respondents.
Proposition 13 is to the average Califor-
has been submitted to the U.S. Supreme
nia homeowner. I hope our elected
Court on behalf of HJTA and the Paul
officials are making note of this."
Gann's Citizens Committee. The brief
Petition for Writ of Certiorari
argues that the Court should let stand the
to the Court of Appeal of the
SECOND SUIT PENDING
ruling of the state courts in support of
State of California
BEFORE HIGH COURT
Proposition 13 by not agreeing to hear
the case. If the Court does agree to hear
The Macy's case was the first to be
the suit, Coupal will file a second brief in
BRIEF AMICUS CURIAE OF HOWARD JARVIS
appealed to the U.S. Supreme Court. The
support of Proposition 13.
TAXPAYERS ASSOCIATION AND PAUL GANN'S
case of Los Angeles attorney Stephanie
Additionally, HJTA has hired attor-
CITIZENS COMMITTEE IN OPPOSITION TO
Nordlinger has also been appealed to the
ney Jay Curtis, a nationally recognized
PETITION FOR CERTIORARI
high court and a decision on whether or
expert on tax policy with the firm of Baker
not to hear her case is expected this fall.
& Hostetler, McCutchen, Black. Curtis
The Nordlinger suit maintains that Propo-
is assisting Los Angeles County Assessor
RONALD A. ZUMBRUN
sition 13 violates the equal protection
Kenneth Hahn in preparing the county's
ANTHONY T. CASO
clause of the U.S. Constitution. She ar-
response to the Nordlinger challenge.
JONATHAN M. COUPAL
gues that because a person buying a new
Although elected to the assessors' post
*Counsel of Record
home would be taxed on the purchase
just last year, Hahn has proven a stalwart
Pacific Legal Foundation
price, and this could result in having to
supporter of Proposition 13 and HJTA
2700 Gateway Oaks Drive
pay more taxes than longtime owners of
will continue to work closely with his
neighboring homes, this interferes with
Suite 200
office to assure that Proposition 13 gets
the "right to travel.'
Sacramento, California 95833
the best-legal defense possible.
Proposition 13 supporters would be
Telephone: (916) 641-8888
Attorneys for Amici Curiae
This column appeared in the July 25 editions of the
COCKLE LAW BRIEF PRINTING CO. (800) 225-6964
OR CALL COLLECT (402) 342-2831
Los Angeles Daily News and the San Francisco Chronicle
BUDGET THAT RELIES ON LUCK
Cover of the 19 page amicus curiae brief filed with the United States Supreme
IS RISKY BET FOR TAXPAYERS
Court on behalf of HJTA and Paul Gann's Citizen Committee.
by Joel Fox
The box score on the state budget
that money continued to pour into the
therefore, be a worthwhile investment?
be on the docket next year.
reads taxes up; spending up, but slowed;
state treasury after the shortfall was fixed,
If you don't get concessions in times
Meanwhile, taxpayers budgets are
and errors made all around.
helping to set the stage for the tax revolt a
of crisis, they cannot be won in more
already stretched to the breaking point.
Reading the fine print you find the
decade later.
sedate periods.
Their pockets are turned inside out and
public employees claim they caught
However, not enough of the new
Governor Wilson did get cutbacks in
they are empty. If budget reform is to
Governor Wilson stealing (from their
taxes will sunset. The Governor says two-
welfare payments, the highest in the 48
have meaning, then government must be
pension fund); Assemblyman Tom
thirds of the deficit problem is recession
contiguous states. And, as noted, he
streamlined, waste and duplication must
McClintock's "no new taxes" pledge was
driven, yet only one-third of the taxes and
stopped the automatic spiraling of cost-
be cut, and innovative new ways to pro-
considered a wild pitch; Assembly Re-
fees, the income tax increase and a half-
of-living increases-for awhile, at least,
vide services must be found. Look for the
publican leader Ross Johnson was tossed
cent of the sales tax, were made temporary
He did start his prevention programs to
Governor to search for savings in this
from the game; and while the tax on pea-
to deal with the recession problem.
control future costs by arresting problems
direction. And, if the economy doesn't
nuts in the stands didn't go up, the tax on
The budget plan calls for an end to
now. He also got a small victory in mod-
recover, the Governor should propose a
crackerjacks did.
the income tax increase in five years. At
est reform of the workers compensation
tax cut to stimulate business.
There were no homeruns, but plenty
the same time a freeze placed on the
program for stress claims.
Much of the focus in the media was
of sacrifices-by those who pay the taxes
automatic cost-of-living increases paid
But, he didn't end the Proposition 98
on the Governor convincing members of
and those who receive public monies.
to people on welfare would also end. In
guarantees for school funding, thus leav-
his own party to go along with the budget
It was a difficult game to follow and
other words, state spending will rise just
ing intact the idea that certain govern-
compromise. Wilson was faced with a
perhaps even more difficult to analyze
when tax revenue drops off. What hap-
ment services can earmark a portion of
Democratic majority. How different
after it was over.
pens then? Do we end up in the same
the state general fund for themselves, with
would his program have been if his own
Taxes and fees were raised a record
fix? And, why didn't the legislators and
no oversight from elected representatives.
party controlled the Legislature?
$7.5 billion, which will undoubtedly slow
Governor deal with this irony? Could it
Other government services were watch-
That is why coming budget battles,
the bounceback from recession and keep
be that five years in politics is a lifetime,
ing and may take to the ballot for similar
taxincreases, and budget reforms will not
California's extraordinary high unem-
and many will be gone if the term limit
guarantees. Health care seems lined up to
necessarily be won or lost in future sum-
ployment rate up for some time.
initiative takes effect?
do just that.
mer tussles under the capitol dome, but
Wilson, learning from the experience
Reforming the budget was a major
This is a budget based on faith
right now, when the Legislature and
of his predecessor, Ronald Reagan. pushed
part of the Governor's agenda. He is proud
and luck. Faith that the economy will
Governor hook up to determine how to
for some temporary taxes to bridge the
of the reforms he forced through the
rebound, and luck if it does. If the
reapportion the seats of elected officials.
gap. When Reagan raised taxes to cover a
Legislature. but are they enough for the
economy doesn't recover to the extent of
When it comes to the politicians home
huge deficit in the 1960s, the income tax
price paid by the taxpayer? Will they cut
the rosy forecast made by administration
turf, the box scores are quite different.
change was permanent, with the result
the cost of government in the future and
officials, a deficit and more taxes-will
Sacrifices never.happen.
Photo Copy Preservation
Photo Copy Preservation
MES
TAXING TIMES
PAGE 9
This column appeared in the July 22, Los Angeles Times
The Sweet Things in Life
3
OT
Will Cost You Dearly
TING
by Joel Fox
The Port Hueneme City Council has
networks and instantly found itself No. 1
passed a tax on ocean views to offset its
on school board agendas. The act assumes
city budget crunch. Assessments to pay
that the schools' neighbors will receive
for beach upkeep would vary depending
benefits from these facilities and well-
on how close the homeowner is to the
kept yards - that is, if they can climb
strand. City officials think this makes
over, the locked fences in the dead
sense considering the market value of the
of night.
breathtaking views of the Channel Islands
It's anybody's guess where this will
ASSESSMENT
from the beachfront. The question is, will
end?
the Port Hueneme residents have a rebate
If Port Hueneme officials get away
coming on foggy days?
with their ocean view assessment, up and
DISTRICTS
It seems there is no end to the
down the coast we may soon see toll
expanding use of assessment districts in
booths collecting fees for a peek at the
the hands of bureaucrats. Assessment
ocean. Taking deep breaths of salt air
districts are revenue devices, historically
would demand a surcharge.
used to pay for capital improvements,
If assessments are appropriate for
from Roman roads to medieval English
ocean views, why not assessments for
sea-walls to California irrigation projects
certain city views? Doubters should re-
of the early 1900s.
member that beauty is in the eye of the
The creative use of assessments for
beholder who sets the rates. There could
maintenance and services has mush-
be an assessment on mountain views for
roomed in recent years because they have
those in Los Angeles. There would be a
been ruled outside Proposition 13's
smog discount, of course, for the days the
restrictions. Although the assessments are
Hollywood sign is lost in the haze or al-
TAXPAYERS
levied against property and appear on the
tered by pranksters. But, don't spend that.
property tax bill, on the theory that the
IOT
money you get back for the smoggy days
TING
property benefits from the new greenbelt
you' need it to pay the assessment
or updated street lighting, the assessment
levied to clear away the smog.
is not counted against Proposition 13's
Rationales for assessments appear
1% property tax limit. Nor is a vote of the
endless. As long as there is a remote con-
CFRL REPORT
people required before assessments are
nection between a taxpayer and the object
By: Mark Dolan, Chairman
levied. Both characteristics put assess-
to be built; protected, maintained, cleaned,
ments at the top of city hall wish lists.
Californians For Fair Rent Laws (CFRL), a special project of HJTA, was formed
observed or enjoyed, there is a potential
Benefit assessments have stretched
in direct response to the CALIF-data outlining the horrendous impact on landlords and
assessment lurking.
like, Pinocchio's nose beyond their origi-
rent-paying tenants of the current and recurring abuse of the state's unlawful detainer
Assessments have gone from land to
nal size,and intent Recently, school
(eviction) system. CFRL's legislative approach to the problem was the financing and
sea. and probably will turn space. Is
districts were advised that they, too, can
it so hard to imagine an assessment to
creation, of SB 270, the pre-trial. rent deposit law now carried. by. Senator Quentin
use special tax assessments to build and
protect against a killer asteroid destroy-
Kopp, and sponsored/supported by: Apartment Association of Greater Los Angeles,
maintain pools, play yards and the like
ing Earth?
California Association of Realtors, California Apartment Association, Apartment
under the Landscape and Lighting Ben-
One thing is certain: the chances of
Owners Association, Apartment Association of California Southern Cities, Apartment
efit Assessment Act. This "discovery"
our wallets getting hit by an assessment
Association of San Fernando Valley/Ventura, among others. A hearing deciding the
flashed around the state over computer
fate of the legislation will be reported on in the next issue of "Taxing Times."
district are improving by the day.
RESULTS OF TAXPAYERS OPINION POLL
CALIF REPORT
By: Leonard Walsh, Chairman
Thank you to those HJTA members who took the time to complete
the Taxpayers Opinion Poll we sent you several months ago. Here
As mentioned in prior articles, with HJTA's support, the California Apartment
are the results.
Law Information Foundation ("CALIF") was itself founded as a research source/liti-
gation arm to service the many landlords and tenants who help make up the hundreds
of thousands of HJTA members. Since its inception, and with the direct financial
Question 1: Should California's state taxes be higher, lower or
contribution of HJTA members and members of the apartment industry, including the
should they remain the same?
Apartment Association of Greater Los Angeles, CALIF has: (1) produced two statewide
studies establishing that taxpayers are saddled with paying the cost of courts necessary
Higher: 4% Lower: 38% Stay the same: 58%
to handle an annual 236,000 eviction actions, or 40% of all municipal court filings,
and that rent-paying tenants pay about 1/3 of a billion dollars in higher rents each year
because of the recurring annual losses caused by the non-payers; and, (2) filed 5 major
Question 2: Do you support or oppose a 10% increase in the state
lawsuits against public entities, alleging the imposition of illegal ordinances on the
tax-paying public. CALIF's most recent and dramatic success was its obtaining of a
income tax which would raise 1.5 billion dollars in new government
revenue?
judgment from Los Angeles Superior Court Judge Carol Fieldhouse (7/31/91) invali-
Support: 5% Oppose: 95%
dating a Los Angeles ordinance requiring the payment of interest on tenant security
deposits, meaning untold administrative-cost savings for Los Angeles rental property
owners. (Apartment Association of Greater Los Angeles V. City of Los Angeles)
CALIF attorneys are also assisting HJTA with the current "MAD" lawsuits, attacking
Question 3: Do you support or oppose a one cent increase in the
the spread and taxing appetites of municipal assessment districts. Contributions to
state sales tax?
CALIF are tax-deductible.
Support: 28% Oppose: 72%
QUOTES WORTH NOTE
Question 4: Do you support or oppose a new tax on services such
as lawyer services, dry cleaning and auto repair?
"I keep telling people that two days
"The reason school districts are
after the budget passes everybody
having trouble is bad budget man-
Support: 10% Oppose: 90%
forgets it. People don't know what's
agement. They overspent what they
in it. Later, when they have to dig
didn't have."
for some higher taxes, they may
Question 5: Do you support or oppose plans to raise property taxes
above the limits set by Proposition 13?
think about it for awhile, but
Treasurer Kathleen Brown
that passes."
in remarks to the Los Angeles
Taxpayers Association on
Support: 2% Oppose: 98%
Senate Republican Leader
May 17.
Ken Maddy
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Photo Copy Preservation
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TAXING TIMES
PAGE 11
COMMISSION, from Page 6
Melvin Gagerman
Marla B. Marshall
the commission released its report. (For
CPA/Managing Partner
Special Projects Coordinator
more information see photo and caption,
Good, Gagerman & Berns
Office of the President, CSU
TAX BYTES
page 1.)
San Marcos
Following are the names and
Michael Glaze
affiliations of the Members of the Senate
General Manager, Lake Oroville Area
Tom Rogers
EXERCISING YOUR
Commission on Property Tax Equity
Public Utility District
Supervisor, County of Santa Barbara
TAX MONEY
and Revenue.
Senator Gary K. Hart
Jack Theimer
The Associated Press reports
State of California
Principal, Jack Theimer & Associates
that the IRS is paying for employee
Chairperson
memberships to an expensive pri-
Robyn Phillips
Michael A. Kahn
Iola Williams
vate fitness center next door to its
Assistant Professor of Economics
Attorney, Folger & Levin
President. League of California Cities
Washington, D.C headquarters
University of California, San Diego
This spares workers the six block
Vice Chair
walk to a free, government gym.
Kirk West
About 125 memberships, each
President. California Chamber
costing approximately $700 a year,
are being purchased
of Commerce
David E. Anderson
IT STARTS AT THE TOP
Former CEO, GTE California
When Bill Anton became Su-
perintendent of the Los Angeles
Irene Angelo
President, Angelos Marketing Properties
Unified School District last year,
one of the first things he did was
II
Senator Ruben Ayala
give up the chauffeur enjoyed by
State of California
his predecessors. With the School
11
district facing spending cuts, this
Jack Baugh
May he volunteered to take a 10
n
Vice President, Operating Engineers
percent cut in his $161,390 annual
Local Union No. 3
salary to set an example for district
Senator Marian Bergeson
employees that all should work to
State of California
cut spending a rare gesture of
CALIF VOTERS
economy on the part of a public
1
Gerald Cochran
official
g
County Assessor, Del Norte County
PROP
WON'T TAKE "NO"
Maureen G. DiMarco
President
CALIE PoLiTiciANS
13
FOR AN ANSWER
California School Boards Association
Last November, Pasadena vot-
(Now California Secretary of Child
ers overwhelmingly rejected pay
Development and Education)
raise for the City Council. This July
P.M.
'I'
the council voted to create a sub-
Patsy Estrellas
KIRKCALD
committee to propose pay increases
Teacher. Nuffer School
for members of the Community
Development Commission, whose
CITIZEN TAXPAYERS
pay be raised without a public
BLAME, from Page 2
vote. The seven members of the
charges and fees have increased 260%
A POWERFUL FORCE
Community Development Com-
from the year following Proposition 13,
mission also happen to be the seven
to $3.3-billion.
10
members of the City Council
Benefit assessments, a traditional
Howard Jarvis always believed in the power of the individual to shape politics.
device to pay for capitol improvements
And he believed that if informed, motivated individuals were to join forces to pursue a
M-I-C-K-E-Y
which dates back to pre-medieval En-
common goal, this could be an irresistible political force.
gland, have been creatively altered to take
While the taxpayers have been receiving much bad news lately, we still see many
M-O-N-E-Y
in services normally paid for out of the
successes achieved at the local level because citizens are willing to step forward and
The Disney Development Com-
general fund such as street lighting and
fight efforts to impose unjust taxes or assessments.
pany is seeking $395 million in tax
landscaping. These non-voted assess-
The following letter from Al Goeppinger of Escondido illustrates the point.
payers aid to support the expansion
ments have grown from $36-million in
of Disney theme.parks. Among the
1978-79 to $279-million in the latest fig-
projects Disne would like to see
ures, a rise of 672%. In special districts,
Dear Mr. Fox:
federal highway funds used for
|
set aside to perform individual functions
would be transportation improve
I.
such as flood control, benefit assessments
Thank you for your letter of June 13th with some helpful suggestions on fighting the
ments, parking facilities and
n
have increased 2506%.
assessment district as proposed by the Escondido Union High School District.
people mover. Critics, who object
11
Compare these figures with the rev-
to-taxpayers being asked to finance
enue produced for local government by
We are happy to report that through the efforts of " grass roots public protest with
projects that primarily benefit
the sales tax, which has been a steady
petitions, telephone calls and attendance at the school board meeting. the school
single private enterprise, include
revenue source during this time period.
board saw fil to postpone indefinitely any formation of the tax district.
Congressman Robert K. Dornan
Sales tax revenue has increased 118%.
The district spent between $36,000 and $40,000 for engineering and legal fees which
who represents the district that in
It is true the schools no longer rely
we feel is a great waste of school district funds.
cludes Disneyland. "Disney,
on the property tax as they did before
much as love them. is a commer
Proposition 13. However, the California
Perhaps the best chance of retaining Proposition 13 will be an awareness by the
cial enterprise the Los Angeles
Supreme Court decision in Serrano VS
public at the local level.
Times quoted Doman as saying.
Priest - handed down before Prop. 13
passed stated that "spending on schools
Thank you for your interest and help!
DING DONG
could not be a function of wealth." The
SNACK TAX CALLING
effect of that ruling was that property taxes
would no longer be the backbone of edu-
We appreciate Mr. Goeppinger's remarks and agree with his comments on the
Many are confused by the new
cation revenue. This forced the state to
California 'snac tax under which
importance of awareness at the local level. Our HJTA hat is off to Al and the other
take over the major portion of school fund-
popcorn, brownies and Ritz crackers
Escondido residents who proved what can be accomplished by an aroused citizenry.
ing. The state school budget today is larger
While we are on the subject of active citizens we would like to mention another
are taxed, but peanuts doughnuts
than the entire state budget when Propo-
dedicated tax-fighter from the other end of the state, Ralph Morrell of Dixon. Almost
and saltine crackers are exempt.
sition 13 passed.
Brad Sherman. chairman of the state
single handedly, Ralph and his Committee to Reform Spending Practices in the
Proposition 13 is not the cause of
California Legislature (known as Operation Slush Fund) has exposed such practices as
Board of Equalization. is (urging
California's budget crisis, just as it is
"phantom voting" where legislators who are not in attendance are recorded as voting,
taxpayers to protest this new tax by
obviously not the cause in the 30 other
or where recorded votes are changed after the vote is concluded so legislators can
deluging the Governor with taxable
states facing budget deficits. Mix too
deceive constituents on how they actually voted.
Hostess Ding Dongs,
much spending spurred on by the pro-
Ralph is continuing his efforts to shine light into dark corners by pressing to have
viders of government services together
the Legislature's own budget audited as well as that of the Governor's office.
Compiled by HJTA Executive
with a national recession, and you'll find
In spite of some reverses, citizen taxpayers continue to be a powerful force to
Director Kris Vosburgh
the reason for the budget shortfall.
correct irresponsible, corrupt, or abusive government practices.
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2) Require able-bodied welfare recipients to work or perform community service
in exchange for benefits received.
3) Increase the financial rewards available to low-income working families, both
married and single, relative to the rewards to non-working parents on welfare by
providing tax relief to low-income working families.
4) Increase the financial rewards available to low-income working families, both
married and single, relative to the rewards to non-working parents on welfare by
providing tax credits and vouchers for medical insurance to working families who
currently lack medical coverage.
Of these four tools for reforming the welfare incentive system, the work requirement is the
most important. Under the current welfare system a non-working single mother receives an in-
come from the government for free; if she becomes employed she must give up all or part of this
free income. However, if the welfare recipient is required to work in exchange for benefits, a
new cost is attached to welfare dependence and the attractiveness of welfare relative to employ-
ment is greatly reduced. Indeed, if the work requirement can be coupled with other government
policies which ensure the family will be somewhat better off financially when the mother is em-
ployed than when the family is on welfare, then the anti-work incentives of welfare would be
utterly eliminated. However, as long as the welfare recipient has the option of receiving a size-
able income from the government without work, then it will be impossible through other means
to reduce significantly welfare's anti-work incentives.
Surprisingly, a work requirement also eliminates the anti-marriage incentives of the current
welfare system. Under the current welfare system, when a single mother marries a fully em-
ployed male she loses most of her welfare benefits. Under a welfare system with a work
requirement, a single mother still would lose her benefits upon marrying-but she would now be
losing benefits which she had to earn rather than a free income, so the loss would be far less sig-
nificant. As long as the mother could obtain a private sector job which paid roughly as much as
welfare, then marriage would no longer impose a significant financial or personal cost on the
mother or her prospective spouse. Indeed, if required to work for welfare benefits, some welfare
mothers would prefer to marry and be supported by a husband's income rather than enter the
labor force. By converting welfare from free income to income which must be earned, a work re-
quirement eliminates most of welfare's anti-marriage incentives and would make marriage
economically rational once again for millions of low-income parents.
While few states have attempted to establish serious work requirements for AFDC parents,
those experimental programs which do exist indicate that work requirements can have a signifi-
cant impact in reducing welfare dependency. As part of a workfare program operated on an
experimental basis in six Ohio counties, AFDC mothers were required to perform community
service for twenty hours per week. While only 25 percent of all AFDC mothers were required to
participate, the work program reduced overall number of families on AFDC by some 12 percent.
In other words, for every hundred mothers that were required to work in exchange for benefits,
over forty mothers left welfare entirely.²²
22 Bradley R. Schiller and C. Nielsen Brasher, "The Effects of Saturation Workfare on AFDC Caseloads,"
8
While a serious work requirement will change the welfare incentive structure and reduce de-
pendency, it is also vital for other reasons. Society should provide aid to those in need. But aid
which is merely a one-way handout is harmful to both society and the recipient. Such aid under-
mines the individual's ability to take responsibility for his or her own life. If the habit of
dependence becomes entrenched, it limits the individual's capability to become a fully function-
ing member of mainstream society.
Welfare is currently a check in the mail with no obligations. This is wrong. Instead, welfare
should be based on reciprocal responsibility: Society will provide assistance, but able-bodied re-
cipients will be expected to contribute back to society in exchange for the benefits they receive.
TOWARD COMPREHENSIVE WELFARE REFORM
What is needed is a comprehensive welfare reform strategy. Many elements of comprehensive
reform can be implemented at the state level; however, state actions should be complemented by
tax relief and an overhaul of the U.S. medical system at the federal level. Although tax policy
and medical reform are formally outside the welfare system, reforms in these areas will have a
significant impact on the opportunities and behavior of low-income families, and therefore are an
important part on any welfare reform strategy.
Comprehensive welfare reform must strike a balance between two key themes. First, it must
seek to increase the rewards for work and marriage among low-income families. Second, it must
reduce the incentives currently provided by welfare for non-work and single parenthood. Re-
forms which fail to follow this balanced approach will be unsuccessful. Comprehensive reform
would have seven parts:
1) Reduce Benefits. Welfare benefits for families on AFDC should be reduced. This is particu-
larly true in states with high benefits levels. AFDC recipients are eligible for benefits from
nearly one dozen major welfare programs. In all but five states, the combined value of benefits
received by the average AFDC family exceeds the federal poverty income threshold. Moreover,
there is considerable inequality in welfare benefit levels within each state. Because some fami-
lies receive aid from many programs, they will have overall benefits much greater than other
welfare families of the same size and characteristics within the state. Example: AFDC families
that also receive housing aid will have overall benefits some $4,000 to $5,000 higher than other
AFDC families within the state. In almost every state such families will have combined welfare
benefits well above the poverty threshold. States should reduce AFDC payments to families that
also receive housing aid.
2) Require Work in Return for Benefits. States should require some but not all welfare recip-
ients to work in exchange for benefits received. Recipients of Food Stamps and General
Assistance who are not elderly and not disabled and who are not directly caring for children
should be required to perform community service for at least twenty hours per week. 23 Within
unpublished paper, November 1991.
23 Requiring someone to perform community service means that they would perform useful functions in
government or in non-profit private sector organizations. Community service is also called "work experience."
Many legislators argue that they would like to require welfare recipients to work in for-profit private sector
jobs, but this expectation is unrealistic because few private sector employers are willing to employ persons
who literally have to be forced to work. However, requiring the recipient to perform community service with a
government organization removes the recipient's option of receiving welfare income without labor. The work
requirement makes welfare less attractive relative to employment and will thereby induce many recipients to
take real private sector jobs.
9
the AFDC program, mothers who do not have children under age five or who have received
AFDC for over five years should be required to perform community service for at least 35 hours
per week in exchange for benefits. In all two-parent families receiving AFDC, one parent would
be required to work. For all programs the work requirement should be permanent, lasting as long
as the individual or family receives benefits.
This policy specifically exempts most mothers with pre-school children from the work require-
ment. Because of the high costs of providing day care, work requirements for mothers with
pre-school children would almost certainly increase rather than cut welfare costs. Moreover,
great caution should be exercised toward any policy which separates young children from their
mothers, as this will often have a significant negative effect on the child's development. Thus a
well designed work program generally would not include mothers with young children; how-
ever, a second rule requiring work from mothers who have received AFDC payments for over
five years, either continuously or in separate periods, is needed to discourage mothers from inten-
tionally having added children in order to avoid their work obligation.
If a work requirement of the sort outlined here were established, roughly 50 percent of AFDC
mothers would be required to work as a condition of receiving benefits. This would be an enor-
mous improvement from the present situation; in the average state only 6 percent of AFDC
mothers currently participate in job search, work, or training programs.
3) Require Responsible Behavior. States should require responsible behavior as a condition
of receiving welfare benefits. This would include policies such as insisting that unmarried minor
mothers reside with their parents or in some other adult supervised setting, and reducing pay-
ments to mothers who fail to provide their children with free immunizations. Most important,
mothers who bear additional children while they are already receiving welfare should not receive
an increase in welfare benefits.
4) Enforce Education Requirements. States should rigorously enforce the current federal
law requiring all AFDC mothers under age eighteen who have not completed high school or
passed a GED to attend school. To avoid the negative affects of separating infants from their
mothers, however, mothers with infant children should not be required to participate more than
twenty hours per week.
5) Experiment with Wedfare. More mothers leave AFDC through marriage than through em-
ployment. States should experiment with "wedfare" programs which provide bonuses to AFDC
mothers who marry, leave AFDC and remain off the welfare rolls. However, since the real ef-
fects of wedfare programs are uncertain, any such program should be rigorously evaluated
through controlled experiments.
6) Provide Tax Credits or Vouchers for Medical Coverage to All Working Families. The
current welfare system which provides free medical coverage to single parents and non-working
two-parent families on AFDC, but does not provide medical assistance to low income working
families, discourages both work and marriage. The federal government could reduce the anti-
work/anti-marriage effects of welfare by enacting the comprehensive medical reform proposed
by The Heritage Foundation in A National Health System for America. 24 This plan would,
among other reforms, provide federal tax credits and vouchers for the purchase of medical insur-
ance to low-income working families not eligible for Medicaid. A proposal similar to the
Heritage plan recently was introduced by President Bush.
24 Stuart M. Butler and Edmund F. Haislmaier, eds., A National Health System for America (Washington, D.C.:
The Heritage Foundation, 1989).
10
7) Provide Tax Relief to All Families with Children. The federal government currently im-
poses heavy taxes on low-income working families with 25 children. A family of four making
$20,000 a year currently pays $3,780 in federal taxes. This heavy taxation promotes welfare
dependence by reducing the rewards of work and marriage relative to welfare. A crucial step in
welfare reform is broad family tax relief along the lines proposed in The Heritage Foundation's
A Prosperity Plan for America: How to Strengthen Family Finances, Revive the Economy, and
Balance the Budget. 26 This plan would provide a $1,000 tax credit for each school-age child in a
family and a $1,500 tax credit for each pre-school child; the tax credits could be used to reduce
the family's income tax liability and both the employee and employer share of the Social Secu-
rity payroll tax. The effect of this plan would be to eliminate all federal taxes on working
families with children with incomes below 120 percent of the poverty threshold. The revenue
loss of these tax credits would be offset by corresponding spending constraint through capping
the growth of total federal domestic spending at 5 percent per annum. Thus the plan would not
add to the federal deficit.
CONCLUSION
Any attempt to reform the current structure of public welfare must begin with a realization that
most programs designed to alleviate "material" poverty lead to an increase in "behavioral" pov-
erty. While the poor were supposed to be the beneficiaries of War on Poverty's transfer
programs, they instead have become its victims. If policy makers fail to recognize or respond to
this relationship, the welfare state will continue to worsen, rather than improve, the lives of
America's poor.
The rule in welfare as in other government programs is simple: You get what you pay for. For
over forty years the welfare system has been paying for non-work and single parenthood and has
obtained dramatic increases in both. But welfare which discourages work and penalizes marriage
is a system which ultimately harms its intended beneficiaries.
Comprehensive welfare reform must combine toughness and refusal to reward negative behav-
ior with positive rewards for constructive behavior. Reforms which fail to include both sides of
this equation will not succeed.
25 Figures are for 1991.
26 Scott A. Hodge, ed., A Prosperity Plan for America: How to Strengthen Family Finances, Revive the Economy
and Balance the Budget (Washington, D.C.: The Heritage Foundation, 1992).
11
3/15/92
16:08
0202 737 1069
NCSL
F-165 T-372 P-882/202 MRY 14 '92 12:07
+2825452886
NAT TRXPAYER'S UNION
Fish
NATIONALI
A NONPARTISAN NONPROFIT ORGANIZATION DECICATED TO THE PUBLIC INTEREST
WASHINGTON, DISTRICT of COLUMBIA 20002
TELEPHONE: AREA CODE (202) 543-1360
329 PENNSYLVANIA AVENUE. SOUTHEAST
543-1300
NASTONAL TAXPAYERS UNION CONTINMS COUNT an 32 STATE LEGISLARS
TO HAVE CALLING FC II:
COMMENTION ON A MEANCED
The 32 state legislatures which have passed balanced budget amendment resolu-
tions are:
HJR 227, Act 302
1976
Alabama 1
1982
Alaska
HJR 17
SJR 1002, BOI 2003
1979, 1977
Arisona
1975
Arkansas
HJR 1
1978
Colorado
SJM 1
1975
Delaware
HCR 36
Ben. Mamorial #234, NY 2801
1976, 1976
Florida 2
Res. Act. #93, MR #469-1267
1976
Georgia
1979
Ideho
HCR 7
1979
Indiana
SJR 8
1979
SJR 1
Iewa
1978
SCR 1661
Kansas
Louisiana 3
SCR 4, SK 73, ACR 269
1979, 1978, 1975
Maryland
5JR 4 (Original), Md JR 77 (Enrolled) 1975 1975
Mississippi
HCR 51
1983
Missouri
SCR 3
1976
Nebraska
LR 106
SJR 0, SJR 2
1979, 1977
Nevada
1979
New Sampshire
HCR 8
1976
New Mexico
SJR 1
North Carolina
Recolution 5
1979
1975
North Dekota
SCR 4018
1975
Cklahoma
HJR 1049
1977
SJ Memorial #2
Oregon
1976
Pennsylvania
HR 236
South carolina
SCR 1024, SCR 570
1978, 1976
1979
South Dakota
SJR 1
1977
Tennessee
SJR 22
1978, 1977
Texas
MCR 13, HCR 31
1979
Utah
HJR 12
1976
Virginia
HJR 12 (Original) JR 1 (Enrolled)
SJR 36
1977
Ryoming
Certified copies of these resolutions are on file at the National Taxpayers
union.
1 Alabama voted to rescind 4/28/08.
2 Florida voted to rescind 5/25/88 (SM 302).
3 Louisiana voted to rescind 7/90.
DRII:67
Contact Al Cors
202/543-1303
TWE AMERICAN TAXPAYER ACTS THROUGH NTU
TEW:
FROM
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16
6TH STORY of Level 1 printed in FULL format.
Copyright 1992 American Broadcasting Companies, Inc., All
rights reserved.
ABC NEWS
SHOW: THIS WEEK WITH DAVID BRINKLEY
This is an uncorrected copy. Not a final version.
May 24, 1992
LENGTH: 9024 words
BODY:
ANNOUNCER: From ABC News, This Week with David Brinkley. Now, from our
Washington headquarters, here's David Brinkley.
DAVID BRINKLEY, ABC News: In 1969, the U.S. Government spent $3 billion less
than it collected in taxes and so did not have to borrow a nickel. In the 23
years since, that has not happened again, not once. Instead, government has
spent more and borrowed more every year, which the debt has risen into the
trillions and the estimate for this year alone is to borrow $400 billion more.
Congress is already in deep trouble with the American people. It thinks it might
redeem itself if it can put a stop to this with a constitutional amendment to
force federal budgets to be balanced and an end to the borrowing. And they say
this year, after years of talking about it, they may actually do it. Even if
they do, it'll not be simple and it will not be easy. Well, why not?
[voice-over] We'll ask today's guests- Representative Tom Foley, a Democrat,
Washington, Speaker of the House; Senator Phil Gramm, Republican, Texas, a
member of the Senate Budget Committee; and Representative Leon Panetta,
Democrat, California, Chairman of the House Budget Committee. Some background
from our man, Jack Smith, and our discussion here with George Will, Sam
Donaldson and Tom Wicker- here on our Sunday program. [on cameral First a little
news since the Sunday morning papers. General Suchinda in Thailand tried to
shoot his way in the office of Prime Minister without being elected and by
having his troops fire on people who protested, killing a hundred or more. He
did not succeed. Here's ABC's Bill Redeker in Thailand.
BILL REDEKER, ABC News: [voice-over] The Thai Prime Minister's brief and bloody
rule came to an end in a nationally televised announcement. "I have submitted my
resignation to the king," said former General Suchinda, "to show my political
responsibility." On the streets, thousands of Thais gathered at Democracy
Monument where, only a few days ago, hundreds of their countrymen had been
killed or wounded by soldiers. Many said they were relieved Suchinda had stepped
down.
THAI WOMAN: We don't want him out, but we want to kill him here.
REDEKER: [voice-over] The man who ruled Thailand for only 48 days appeared
briefly in public today after visiting a Buddhist shrine and Thailand's supreme
patriarch. [on cameral Suchinda's resignation has defused a lot of tension here,
but after 60 years of military interference in Thai politics, no one here
expects a truly representative democracy to emerge overnight. Bill Redeker, ABC
News, Bangkok.
Mr. BRINKLEY: In anger over the continued civil war in what used to be
Yugoslavia, Secretary of State James Baker says he will ask the United Nations
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to invoke Chapter Seven. That is a resolution allowing formation of a military
force like that used against Iraq. We'll be back with all the rest of today's
program in a moment.
[Commercial break]
Mr. BRINKLEY: Balancing the budget would require less spending or higher taxes
or both. Some economists oppose it, saying government should have some
flexibility in taxing and spending to get out or stay out of recessions. That
may be true, but it's had that flexibility for years and we have had recessions
as usual. Of every dollar we all pay in taxes, one-fifth goes to interest on the
debt. It will soon be the biggest single item in the federal budget, doing
nothing for health, for education, the environment. It is a massive transfer of
wealth from working people to those rich enough to buy government bonds. Jack
Smith has background on all of this. Jack?
JACK SMITH, ABC News: [voice-over] David, meet Pat and Bob Worniewski [sp?], two
Americans getting help planning their financial future.
FINANCIAL CONSULTANT: Save as much as you can out of your cash flow.
SMITH: [voice-over] They are balancing their budget, something millions of
Americans every day, but which the government in Washington hasn't been able to
do in 23 years. And with Washington now spending a billion more every day than
it takes in, the deficit is out of control.
1st MAN ON STREET: It's infuriating. I have to balance my budget. Why shouldn't
they?
BOB WORNIEWSKI: [sp?] I can't see how we can continue- how the country could
continue to spend the way it is without having some kind of, you know, balanced
budget.
PAT WORNIEWSKI: [sp?] And at some time, we're going to have to sort of bite the
bullet and just do it.
SMITH: It's because of sentiment like this than an amendment to the
Constitution, requiring a balanced budget, is now making its way through the
Congress and, for the first time ever, it's expected to pass with the required
two-thirds majorities in both houses and then be ratified by three-quarters of
the states within two or three years.
Rep. CHARLES STENHOLM, (D) Texas, House Budget Committee: It seemed to us, 278
of us, that the time has come for a constitutional amendment to give us the
backbone, to give us the courage, to give us whatever is necessary to deal with
our nation's fiscal problem.
SMITH: [voice- over] Democrat Charles Stenholm of Texas is sponsoring an
amendment in the House. Democrat Paul Simon of Illinois is doing the same in the
Senate and lobbying his colleagues. What's making this possible is the large
number of liberals, traditionally opposed to restraints on government spending,
who've changed their minds. Why? Well, for one thing, despair of ever
controlling the federal deficit that today stands at a record $400 billion and
is slowly bleeding the country dry. Interest payments on the national debt now
siphon off one-fifth of federal spending.
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Sen. PAUL SIMON, (D), Budget Committee: interest is going to be the number one
expenditure of the federal government this next fiscal year.
Rep. BOB WISE, (D), Budget Committee: It's competing directly with education,
infrastructure, health care- all the vital domestic programs- job training,
economic growth, that are vital to make our country and our economy grow.
SMITH: [voice-over] And politics is involved, too. A balanced budget amendment
gives political cover to incumbents in a year when voters are angry with
do-nothing government.
WOMAN ON STREET: They just want to get reelected and that's all. And I think
most people feel that way. We're all disgusted- and powerless. We feel
powerless.
2nd MAN ON STREET: At the rate that this country is into deficit spending, how
in heaven's name can the economy improve?
SMITH: [voice-over] But is a constitutional amendment the right way to go?
Skeptics and opponents think not and believe a balanced budget amendment will
rank with prohibition as misguided and even dangerous.
IRWIN KELLNER, Economist: There are times in the economic cycle where you don't
have to have a balanced budget. In recessions, the government should be spending
more and taxing less to make up for the reduction in spending by the private
sector.
SMITH: [voice-over] But what mainly animates skeptics is the belief that a
constitutional amendment is unworkable, just a hoax by politicians who lack the
courage to really cut the deficit.
CHARLES KRAUTHAMMER, "Washington Post" Columnist: You can be sure that, faced
with a choice of a radical rise in taxes or huge cuts in entitlement spending -
which are going to be the only says to really do this and the way that we ought
to do it - that they will choose some kind of trick and the tricks are out
there.
SMITH: [voice-over] Remember the Gramm- Rudman deficit-reduction law to balance
the budget by 1991? It only missed by $269 billion and the same techniques used
to emasculate it are still available today to Congress and the White House -
things like phony economic forecasting and declaring items off-budget, which is
what's been done with the cost of the S&L mess - and skeptics don't expect
anything different this time.
MOLLY IVINS, "Fort Worth Star-Telegram": People are smart enough to understand
that passing a constitutional amendment is not going to solve the deficit. When
you find a politicians who is willing to look you in the eye and say, "OK, I'll
tell what we'll do about the deficit, we'll put a dollar-a-gallon tax on
gasoline," then you're talking to a politician who's leveling with you.
SMITH: There is no free lunch, but no politician is going to risk his job by
saying that. In fact, in a year when voters want to throw the bums out, scared
incumbents are likely to point to a constitutional amendment, even if it ends up
accomplishing nothing, as a real accomplishment. David?
TM
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ABC NEWS, May 24, 1992
Mr. BRINKLEY: Jack, thank you. Coming next, Representative Leon Panetta,
Democrat, California, Chairman of the House Budget Committee; and shortly,
Senator Phil Gramm, Republican, Texas, a member of the Senate Budget Committee;
and the Speaker of the House, Tom Foley, Democrat, Washington- in a moment.
[Commercial break]
Mr. BRINKLEY: Mr. Panetta, I believe you're at the Quail Valley Lodge in Carmel
Valley, California. Is that right?
Rep. LEON PANETTA, (D), California, Chairman House Budget Committee: That's
correct.
Mr. BRINKLEY: It looks awfully pretty. If you live there-
Rep. PANETTA: It's in the middle of my district.
Mr. BRINKLEY: If you live there, why would you want to be sent to Washington? I
withdraw the question. Here with us in the studio in Washington are George Will
and Sam Donaldson, both of ABC News. Now, Mr. Panetta, tell me this. Here in
Washington, we've been hearing talk for years about balancing the budget and an
amendment to require it and so on. Now, suddenly, it seems to have acquired some
life. Why?
Rep. PANETTA: Well, for a number of reasons. Obviously, the most important is
that we're in a political years and there are a lot of members that are running
scared from this issue, afraid that the public is looking for some kind of
symbol that they really are serious about taking on the deficit, and also
because, obviously, we're looking at $400-billion deficits. So the fact is that
all of those issues are now driving the institution towards trying to get some
kind of amendment in place.
Mr. BRINKLEY: Well, if you got some kind of amendment in place, is the Congress
able and willing to deal with it. It would be very hard.
Rep. PANETTA: That's my concern. My concern is that what we're looking at is the
prospect of changing this country's most important governing Constitution - that
deals with the rights of people, that deals with the powers of government - when
the fact is this is not a constitutional problem. We have the powers now. The
President has the power, the Congress has the power to deal with balancing the
budget. The problem is getting the leadership to make the touch choices
necessary in order to get that done. And no constitutional amendment is going to
assure that kind of leadership.
GEORGE WILL, ABC News: Congressman, it can't assure it, of course, but when one
looks at the groups that are adamantly opposed to a constitutional amendment to
require a balanced budget - organized labor, particularly public employees
unions, lobbies for the elderly in the cities and others - they seem to think
that it really might work all too well.
Rep. PANETTA: You know, obviously, there are going to be groups that are
looking at their own personal interests in terms of what does or does not
happen. My view is that if you're going to get a balanced budget, there's no
reason why the President of the United States can't start now, present a
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proposal to get us to a balanced budget, deal with the issues that have to be
confronted in order to get us there- the spending cuts, the entitlement savings,
the issues related to defense savings or taxes, the combination that you're
going to need. The Congress Budget Office tells us that we need to achieve
almost $600 billion in deficit reduction if we want to a reach a balanced budget
by 1997. That means about another $40 billion that we would have to do in
deficit reduction this. We want to know the answer to how you get there, not
just simply do an amendment and hope that somebody down the road will deal with
issues themselves.
Mr. WILL: Well, you're absolutely right, of course, that political will would
obviate the need for this amendment, but is it not the case that political will
might be instilled by raising to the level of a constitutional infraction what
we now all recognize to be an immoral use of the country's resources?
Rep. PANETTA: That's the primary argument, obviously, George - is that somehow
there'll be the moral force now, with the Constitution, to do the right thing -
but I'm not so sure that really is going to be the result. I mean, the fact is
that you can find ways around laws that have been enacted, such as Gramm-Rudman.
You can find ways around constitutional amendments. The states do that all the
time.
Mr. WILL: Yet- Congressman, that is another argument one hears, is that we
daren't trivialize then Constitution because the current leadership and
political class in Washington would be corrupt regarding this, tricky and
devious and cook the numbers and all the rest. What does that tell us, that
argument against a balanced budget amendment, about the political class's
assessment of itself?
Rep. PANETTA: Well, look, it still comes down to one thing, which is the will of
the President and the will of the Congress to confront the tough choices that
you have to make to deal with this. That means you have to take risks. The
President, in 1990, showed us that you can do this without a constitutional
amendment. He basically challenged the Congress to come up with a deficit
reduction package of $500 billion. It took us five months of negotiating, but we
came up with what I think is probably the best discipline we've put in place in
a long time. Why can't the President do that again? Why do we have to resort to
a constitutional amendment in order for the President and the Congress to exert
that kind of leadership?
SAM DONALDSON, ABC News: Mr. Panetta, last week, you wanted to tie a vote on the
constitutional amendment in the House to actual guidelines about how you would
achieve the reduction if it became part of the Constitution. You lost that. The
people who want the constitutional amendment said, "Now, let's have that first
and then we'll tell you how we're going to do it." But that's the crux of it.
How are you going to do it? If that constitutional amendment were in place
today, how would you do it?
Rep. PANETTA: Well, Sam, first of all, it tells you a lot about those who are
advocating a constitutional amendment and their motives. I mean, the problem is
it's easy to pass a constitutional amendment. It's tough, again, to make the
policy decisions. My approach was, "Why don't WE make those policy decisions at
the same time that we're considering a constitutional amendment?" But the reason
why people don't want to do it obviously because it means offending a lot of
constituencies out there. If you're going to do it, if you're going to achieve
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this $600 billion in deficit reduction just to reach a balanced budget by 1997,
you're talking about probably doing something in the vicinity of $200 billion in
the savings in the entitlement areas. That largely means that you have to deal
with health care costs, which are the greatest villain right now, and it means
establishing some very tough cost controls on health care. Secondly, you got to
deal with retirement programs, either limiting-
Mr. DONALDSON: Social Security?
Rep. PANETTA: That's correct- limiting cost-of-living increases or taxing Social
Security benefits. You've got to get additional defense savings above and
beyond what the President has already called for and you also have to look at
taxes. You've got to look at the possible of a gas tax or a VAT tax or
increasing the rates. You need a combination of all of those if you're going to
be serious about taking on the deficit. That's where the crux is of the
challenge. If the President's not willing to confront those issues, if the
Congress is not willing to confront those issues, you can pass all the
constitutional amendments in the world and you're not going to get a balanced
budget.
Mr. DONALDSON: Now, what's going to happen if the constitutional amendment is in
place and on a Monday morning, the Treasury reports that, in fact, the
government has slipped over into deficit, into red ink? I take it, by law, the
government is required to shut down.
Rep. PANETTA: Well, unless you can get a three-fifths vote under these
constitutional amendments we're dealing with. One of the other problems you have
is the requirement for a three-fifths vote in order to be able to have an
unbalanced budget. We already have witnessed the kind of constructions the
Senate can place on itself when it allows the minority to basically run the
show. I think that's one of the problems with this constitutional amendment, is
that it could put a straight-jacket on what is a $5 trillion national economy.
There's no other Industrialized country in the world that has this kind of
constitutional amendment requiring that kind of balanced budget. The other
problem you have is that we may wind up putting very sensitive economic
decisions not in the hands of the elected leadership of this country, where it
should be, but in the unelected judges of the federal court, who will then have
to decide issues related to constitutional amendment. We could have a
constitutional crisis as a result of doing this kind of amendment.
Mr. BRINKLEY: thank That's quite a hops' nest you're
describing th
Rep. PANETTA:
GRamm
Mr. BRINKLEY:
ber of
the Senate Bu
Foley,
Democrat, Was
[Commercial b
Mr. BRINKLEY:
h us.
Sen. PHIL GRA
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Mr. BRINKLEY: Now, you've heard what has gone before. The Gramm-Rudman - a third
of it is yours, the name is yours - and it was a spending limitation law.
Members of Congress found a way to get around it. Why wouldn't they find a way
to get around this constitutional amendment?
Sen. GRAMM: Well, first of all, David, if you're looking for a four-sided fort
where you can pull up the drawbridge and the citizenry can go to sleep, you're
not going to find it in American democracy. And when Jefferson said the price of
liberty is eternal vigilance, he wasn't talking about the British coming over
the water or the Indians coming over the mountain. He was talking about
vigilance abortions government. The advantage of a balanced budget amendment to
the Constitution is it strengthens the hands of those in the Congress and the
country that want to balance the budget. It tilts the debate in their favor.
Gramm-Rudman made a great progress for 4-1/2 years, but the S&L bailout and the
recession killed it. The problem with it was it was a law. It's like pulling a
trailer up a hill. When the chain got too tight, you either had to back off or
it broke. The strength of a balanced budget amendment to the Constitution is
it's a contract between the people and their government and Congress cannot undo
it and that's why we need it.
Mr. WILL: But the other side of that is is that if Congress scoffs at
fundamental law, then the Constitution is trivialized and brought into
disrespect, 50 let's go to what Mr. Panetta was dealing with and that is the
problem of enforcement. Congress, under this amendment, would be required to get
outlays and revenues in synch. Congress really controls neither in a great
welfare state. Suppose we come to the end of the fiscal year, the budget isn't
balanced. Who has standing to sue? How do you keep the courts out of this?
They've made enough of a hash of the school system, we don't want them in this.
How do you answer those questions?
Sen. GRAMM: Well, David, I've already started to work on it with a balanced
budget implementation act and how I would do it is I would give the President,
every member of Congress and every Attorney General of every state and all the
territories standing in court, give them the ability to file a suit in the
Appellate Court of the District of Columbia is they claim that the budget was
out of balance. If that court found that they had a case, it would go to the
Supreme Court. If the Supreme Court determined that the constitutional amendment
had been violated, then they would be empowered by Congress or directed by
Congress to cut all programs, projects, activities and entitlements across the
board.
Mr. WILL: Time out. Who gives that order to cut- judges? The Supreme Court?
Sen. GRAMM: Well, the Supreme Court- the way the enabling legislation would work
is that it would say, in preserving Congress's relative priorities, it would
pare back all programs, projects and activities through a federal court order.
Now, Congress obviously would respond to this, the public would demand it and it
would force Congress to go back and to do it right. That's the enforcement
mechanism I see.
Mr. WILL: Well, might you not avoid that potential mare's nest if you simply
said, "The balanced budget amendment will require a super majority to raise the
debt ceiling"? The government-
Sen. GRAMM: Well, that's what I- you've got several versions of the bill, but
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one ingredient [that], I think, is indispensable, is a 60-vote, 60-percent
margin to raise the debt ceiling. I think, in doing that, you get an enforcement
not only in terms of balancing the budget, but also, you get a protection
against people taking programs off- budget to avoid the constitutional
amendment.
Mr. DONALDSON: I take it the fundamental objective is to force legislature to do
what it has been unwilling to do on its own because it has a constitutional
mandate to do it. But I'm not certain how that would work and I'd like you to
explain it to me. I think all of the members of the Senate are for reducing the
deficit, but in someone else's area. Senators from states that have large
farming communities, livestock communities, oil interests, have not been in the
forefront, for instance, of balancing the budget that way. So, if you have this
amendment, but you have a three-fifths vote escape clause, how do you force each
other to vote for your own programs?
Sen. GRAMM: Well, Sam, I think the strength of the constitutional amendment is
that it forces choices. You have the three-fifths vote to deal with emergencies
that you can't foresee, where you've got three- fifths of the members of both
houses and the President who believe that there is a crisis. But the idea is
that that raises the threshold you've got to get over, forces Congress to make
hard choices and gives congressmen from agricultural districts the ability to go
to their district and say, "Look, I don't want to redo this farm program, but we
have a constitutional prohibition, there's going to be an across-the-board cut
if we don't do it and therefore, I've got to vote to do it."
Mr. DONALDSON: And you think their constituents would buy that any more than the
constituents would buy the same members saying, "We've got this problem, this
deficit problem and everyone has to contribute"?
Sen. GRAMM: Well, the reason that we need this in the Constitution is to force
A
choice. People say, "Well, Congress can do it already." Well, Congress can
protect freedom of religion, freedom of the press. Congress can do everything
in the Constitution, but the founders recognized that people are imperfect and
they set out prohibitions limiting the power of Congress. When Jefferson first
saw the Constitution he'd been in France during the debate -- he said, "It has
one flaw and that is it doesn't limit the power of government to borrow money."
I believe this amendment closes that loophole in the Constitution.
Mr. DONALDSON: Well, it closes it by making the threshold a little higher from
the vote. It does not close it.
Sen. GRAMM: There isn't a perfect solution. Ultimately, citizens have to be
involved. They have to determine who the good people are and the bad people are
and they have to vote on the basis of it. But it puts a stone wall to your back
in a gunfight, as opposed to a four-sided fort. That's a big advantage. It
affects the debate.
Mr. DONALDSON: Senator, I'm simply unclear as to how strong that gunfight would
be. In the face, for instance, of the elderly, if you try to cut back Social
Security- today, you could do it by a 51-49 vote or 50-50 with the Vice
President breaking the tie. Now, you would require 60 votes and I'm not so
certain that the elderly would let you get away with that.
Sen. GRAMM: Well, let me respond by saying it's the 60 votes you've got to
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have to raise the debt ceiling. That then forces you to come back and make hard
choices- Medicare, for example.
Mr. DONALDSON: By your plan, but there's three-fifths plan, for instance, that
doesn't embroider what you propose.
Sen. GRAMM: Well, but Medicare, for example- everybody knows we can't go on with
that program growing at 14 percent a year, yet Congress does not want to take
the political heat of dealing with it. What I'm saying is, with a balanced
budget, you're going to force hard choices.
Mr. BRINKLEY: Sam-
Mr. DONALDSON: Well, one- I know- I really have to nag about this. One final
questions- you don't want to take the political heat, but how can you stand the
heat if you say, "I had to do it," and your constituents say, "You could have
voted to raise the ceiling. You could have been part of that 60-vote majority to
exempt that program and you didn't make that vote"?
Sen. GRAMM: You've made the threshold higher. Again, you can't make the system
perfect. We're not going to reinvent democracy with the amendment, but I think
we're going to strengthen it and I think America will gain from it. And I think
the people who are against it do not want to 52e the growth of government
slowed.
Mr. BRINKLEY: George, we have a few seconds left.
Mr. WILL: Some conservatives say that a balanced budget amendment without a
super majority requirement to raise taxes will simply guarantee tax increases.
The representatives will go to their constituents with the alibi you've just
given them, saying, "I had to raises, the Constitution made me do it."
Sen. GRAMM: George, I would rather have the two-thirds majority to raise taxes,
but I don't agree with that thesis. Remember, catastrophic health care was
adopted at the peak strength of Gramm-Rudman. It's the first entitlement that we
ever had to pay for. People hated it. Socialism is popular when somebody else
pays for it. It's terrible when you have to pay for it and Congress came back
and repealed it. That is living proof, in my opinion, that if people have to pay
as they go, there are many cases in which they will not go.
Mr. BRINKLEY: They had a head-on collision with human nature, Senator.
Sen. GRAMM: That's right.
Mr. BRINKLEY: Thank you very much for being with us today. Pleasure to have
you.
Sen. GRAMM: Thank you.
Mr. BRINKLEY: Good luck to you. Coming next, the Speaker of the House,
Representative Tom Foley, Democrat of Washington- in a moment.
[Commercial break]
Mr. BRINKLEY: Mr. Speaker, thanks for coming.
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Rep. THOMAS FOLEY, (D), Washington, House Speaker: Pleasure.
Mr. BRINKLEY: Pleased to have you with us. You heard what has gone before. Tell
us, how politically horrible would it be if there were a constitutional
amendment, as discussed, and all those cuts had to be made?
Rep. FOLEY: Well, I'm not sure all the cuts would be made. I think the problem
would be that we would constitutionalize, as George Will said very well 10 years
ago, economic policy-
Mr. BRINKLEY: You remember George Will from 10 years ago?
Rep. FOLEY: Yes, indeed.
Mr. BRINKLEY: That's not fair.
Rep. FOLEY: July 25, 1982. In that column, he said it was wrong to pass a
constitutional amendment to balance the budget. I think it's still wrong. It
would complicate our fiscal policy, might create increased costs, would
certainly lead to inflexibility in dealing with economic problems, could
threaten actually raising the specter of default, which would force U.S.
government securities to stream upwards in rates and cost the American people
billions of dollars. Beyond that, it would, as Senator Gramm just indicated,
almost necessarily involve the courts. A year ago, Judge Bork wrote me a letter
opposing a constitutional amendment to balance the budget and spoke of this
possible judicial intervention as either a vain hope or a dismal prospect and I
agree with him on this issue.
Mr. BRINKLEY: Which way- dismal prospect?
Rep. FOLEY: Dismal prospect. To have the courts, unelected, decide to file
suits, either through hundreds of district courts or in the Circuit Court for
the District of Columbia, try to give orders to either raise taxes or cut
spending- we're doing our whole constitutional support-
Mr. BRINKLEY: If it is as you say-
Mr. DONALDSON: Well now, you really fight dirty, don't you?
Mr. BRINKLEY: -and George was right 10 years 200. what do WP do? You don't let
the defi
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entirely different than mandate a fiscal policy.
Mr. WILL: I understand, but it-
Rep. FOLEY: And what we're dealing with here is making a fiscal problem, an
economic problem into a constitutional problem and a constitutional crisis,
altering the nature of American government. Minorities- the 60-percent,
three-fifths rule changes the nature of fundamental democracy. It leads to
minorities of every kind in the Congress. In each House and Senate, there would
be a 60-percent requirement to either eliminate the balanced budget limit or to
raise the debt ceiling. That will lead to a crisis almost inevitably-
Mr. WILL: Congressman-
Rep. FOLEY: -in which each small group of interests in the Congress will hold
out to get its particular objectives met until it provides the help to get the
60-percent majority.
Mr. WILL: Congressman, there are super-majority provisions all through the
Constitution. This is not a novelty.
Rep. FOLEY: No, but it's a novelty for the direct implementation of fiscal
policy, the day-to-day business of meeting obligations and paying costs.
Mr. WILL: When you bring up the problem of enforcement - and all sides recognize
it as a problem - you seem to be assuming that Congress will not fulfill what
will become a constitutional obligation, 50 you're assuming that Congress will
sort of "disobey" the Constitution. It won't have-
Rep. FOLEY: I think the same pressures are going to be there, with or without a
constitutional amendment, to find easy ways for various groups in the Congress
and the executive branch- we don't want to forget that [neither] this President
nor his predecessor ever, not once, recommended a balanced budget to the
Congress. President Bush has been for just about every constitutional amendment
I can think of, from protecting against burning the flag to abortion to dealing
with term limits and now, a balanced budget amendment.
Mr. WILL: But aren't you really saying that we daren't put this in the
Constitution because the Constitution would be brought into disrespect because
the political class in Washington - Republicans, Democrats, executive and
legislative branches - is so corrupt and spineless that it will misbehave under
this?
Rep. FOLEY: Not corrupt, but obviously, under great pressure to avoid very
difficult things to the constituencies they represent. That's not the only
problem. It's not just the problem that there will be efforts to get around it,
but the problem is you might not be able to get around it and if you can't get
around it; will make recessions; will lead to defaults on government
obligations; will create circumstances where the country's national economic
interests will be perverted by the operation of this amendment if it works and
if it cannot be superseded or be-
Mr. DONALDSON: Mr. Speaker, the people who are for the amendment - whether they
were for it previously or not - have a very powerful argument, which is, "You
are not doing it on your own." Now, without going in the blame game some more,
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what assurance could you give the American people today that if they will not
support a constitutional amendment, Congress will get its act together, will, in
fact-
Rep. FOLEY: It's not just Congress, Sam.
Mr. DONALDSON: Well, there you are.
Rep. FOLEY: It's Congress and the President that have the joint responsibility
for fiscal policy in the country.
Mr. DONALDSON: All right, that the two of you-
Rep. FOLEY: All right. If President Bush-
Mr. DONALDSON: -that the two of you would get your act together. There is no
evidence that you'll do it.
Rep. FOLEY: -or his successor or all the candidates who are running to be his
successor today will pledge that on their election, they will call a meeting of
the Congress to devise a means to deal, over a reasonable period of time - I
would say five or six years - a balanced budget process-
Mr. DONALDSON: You mean another study commission, Mr. Speaker?
Rep. FOLEY: Not another study commission, but specific hard choices. Everybody
likes this amendment because it's absolutely painless. It doesn't say anything
except, "Sometime in the future, we'll do this." Nobody's particular benefits
have to be cut, nobody's taxes have to be increased. Nobody loses anything by a
constitutional amendment vote. We need the hard choices, hard, difficult choices
that the Administration, the President and the Congress have to make jointly. If
we get about doing that, rather than dealing-
Mr. DONALDSON: Well, with all due respect, I think campaign promises are worth
what, in the past, they have demonstrated that they were worth- nothing, often.
So, for all the candidates'-
Rep. FOLEY: Well, I used to have a saying that some of the worst things about
campaign promises, [were] if they're kept, not that they're violated, but-
Mr. WILL: True.
Rep. FOLEY: -the practical problem we have here is that the amendment itself
will do nothing without the implementation language. The implementation language
could be adopted if the President and Congress came together to devise a policy
over a reasonable time - I would say five years, six years to get the budget
deficit down - without imposing upon the Constitution- what President Johnson,
the first President Johnson, suggested was a way of trivializing the document
and leading to its eventual demise.
Mr. BRINKLEY: If the amendment were passed, it would be four, five, six, seven
years before it took effect.
Rep. FOLEY: Oh, I don't think 50. I provides two years after its ratification
or, in some cases- no, I think its ratification, if we passed it and sent it
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to the states this year, its ratification would probably be next year.
Mr. DONALDSON: Mr. Speaker-
Rep. FOLEY: I think we'd have the provisions imposed in about three years' time.
Mr. WILL: There's another-
Mr. BRINKLEY: We've got a little time left, George.
Mr. WILL: There's another constitutional amendment, now bottled up by a 20-term
congressman in the Judiciary Committee, preventing term limits from coming to a
vote on the floor. There are those who say, "If you had term limits" - thereby
reducing the career legislator's incentive to spend borrowed money, pleasing
this year's voters, burdening coming generations "if you had term limits, you
wouldn't be having this pressure for a constitutional amendment to balance the
budget." Why don't you just let the term-limit amendment come to the floor and
see what happens?
Rep. FOLEY: Well, in the first place, this is another one on which you used to
be right, George, and have changed your mind, regrettably.
Mr. WILL: I saw through a glass darkly, now face to face.
Mr. BRINKLEY: He's been going through your old columns.
Rep. FOLEY: As a matter of fact, the idea for term limits proceeds from the
notion that the Congress is full of professional members that never leave-
Mr. WILL: Where'd they get that idea?
Rep. FOLEY: After this election, in particular, I think you're going to see a
very substantial turnover in the Congress and I think-
Mr. WILL: Would you just come to the question, though? Why not bring out term
limits and-
Rep. FOLEY: Because I think it's a bad idea. I don't think we ought to propose
bad ideas to the Constitution. It limits the democracy of the country by
preventing people from making choices.
Mr. WILL: Would it pass if it came to the floor?
Rep. FOLEY: I'm not sure. It might be like this amendment, passed more in
defense than for reasons that are sound.
Mr. BRINKLEY: Sam, we have a few seconds.
Mr. DONALDSON: Mr. Speaker, on May 6th, subpoenas came up Capitol Hill for three
sitting members of the House, Democrats, and two members of your staff, and you
suppressed that knowledge. Why? Why didn't-
Rep. FOLEY: I did not suppress the knowledge. The United States Attorney
subpoenaed certain documents of three members and the Sergeant-at-Arms and the
Clerk, who are custodians. They're not involved in any way- in any other way.
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We were in discussions with the U.S. Attorney about what he actually needed and
as soon as that was determined, the subpoenas were laid down and the-
Mr. DONALDSON: Well, the view is that you kept that from public view which you
got your ducks in order because Congressman Rostenkowski, a very powerful member
of Congress, was one of those whose records were subpoenaed.
Rep. FOLEY: There was no, in any way, violation of any of the rules of the House
and there was no effort to keep it from anyone's attention. I explained this
fully in the House on the day that the subpoenas were-
Mr. DONALDSON: Well, will you now pledge that any more subpoenas will be
immediately divulged?
Rep. FOLEY: We have just created new procedures so that the Republican leader
and I and the Democratic leader are all informed at the same time the moment any
subpoenas arrive in the House.
Mr. BRINKLEY: Mr. Speaker, thank you.
Rep. FOLEY: Thank you.
Mr. BRINKLEY: Thanks very much for being with us.
Rep. FOLEY: Pleasure to be here.
Mr. BRINKLEY: Pleasure to have you. Come again.
Rep. FOLEY: Thank you.
Mr. BRINKLEY: Coming next, our discussion here, dealing with what else is
happening in the world, and joining us will be commentator Tom Wicker- in a
moment.
[Commercial break]
Mr. BRINKLEY: An actress on a television program called Murphy Brown had a baby
out of wedlock. This is the way the story went. Would that have happened, could
that have happened five, six, eight, 10 years ago and if not, why? George, what
do you think?
Mr. WILL: Well, it couldn't have happened a decade ago, I think, probably,
because popular culture follows values and values have changed in the country
and that, in a way, is what the argument's been about this week- some people
saying popular culture merely reflects values, that if the values hadn't already
moved, television wouldn't have dared to put it on. Others say, the Vice
President among them, that it's more complicated than that, mass culture not
just reflects but shapes values and that we ought to be very careful about what
we put on the air, particularly in a era when we are seeing, at all hands, the
evidence of the cost of unwed parenthood.
Mr. DONALDSON: Well, mass culture shapes values, but, George, I must reveal
something to you here. Women were having babies out of wedlock and men were
fathering them long before television was invented. I must tell you that that
practice was not shaped by television and-
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Mr. WILL: You're right. As you know perfectly well, the rate has gone up rather
a lot recently.
Mr. DONALDSON: Well, the rate of illegitimate children is another thing. [It
has] always been with us. But what the Vice President did - and if you read his
speech, there's a lot in it that people may agree with, as far as family values
- was shoot himself in the foot quite clearly. He never watched the television
show, he says, and if this is the way he makes decisions, I think that's scary.
He wanted to criticize Murphy Brown for deciding not to have an abortion, but to
have the child and I thought the Vice President was on the other side of that
issue. I think what he simply did was show that, in trying to enhance his
message's prominence, to get it on the front page, he chose a route that, in
fact, like the Australian boomerang, came around and knocked him in the head.
Mr. BRINKLEY: Tom, what are your ideas?
TOM WICKER: It seemed to me he wanted Murphy Brown to "just say no" and I think
that's not very likely to happen in modern times. As you point out, it didn't
happen in past times. But what's really struck me about that episode was that
Murphy Brown is a fictional character, this is a fictional episode and yet, you
would have thought that the Vice President had attacked Martha Washington. And I
think it shows the extent to which television has become a reality in our lives,
a reality that's greater, let us say, for most Americans than the reality of
life in the ghettos of Los Angeles. What happens on television, that's a true
reality. When the Vice President or anybody mentions that sort of thing. I mean,
the country either goes up in arms or else it comes to his defense, as the case
might be, but-
Mr. DONALDSON: But if you accept George's argument, which I do not, that
television shapes our lives, then the shaping from this show must be not to have
an abortion.
Mr. WICKER: I don't think that's the case. As George said, the Murphy Brown
episode-
Mr. BRINKLEY: When you say "this show," you mean the Murphy Brown show?
Mr. DONALDSON: Yeah, yeah.
Mr. WICKER: Yeah, the Murphy Brown episode wouldn't have happened 10 years ago
because that wasn't common in popular culture. On the other hand, I think the
fact that it did happen on the Murphy Brown show now tends to - to this extent,
I would agree with the Vice President tends to reinforce that as an acceptable
fact of modern life. Again, it's a reality on television, rather than the true
reality that it's all about us, that has the importance.
Mr. WILL: Surely, Sam, you are not enjoining, upon public officials or anyone
else, indifference about what messages are contained and what is pumped into 100
million American living rooms. Surely, this is something we can talk about
without dissolving into the sniggering hysteria that a good bit of the media
lavished on Dan Quayle.
Mr. DONALDSON: Well, they need not be indifferent and the Vice President
certainly has not only the constitutional right, but, I would urge, the public
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duty to say whatever he thinks about any television show.
Mr. WICKER: Yeah, and surely-
Mr. DONALDSON: But if he's a smart guy and he wants his message on family values
to be read and debated on its merits, then smart guys don't attack Murphy Brown.
I mean, I think this is another example. of the Vice President simply going off
half-cocked.
Mr. BRINKLEY: Don't we know, Sam, that children growing up without fathers - and
there are increasing numbers of them - are far more likely to wind up
uneducated, in trouble, in crime, in jail?
Mr. DONALDSON: Absolutely, and the Vice President's message there seemed to be
one that, on the surface, we'd all adhere to. It is far preferable to have a
two-parent home. It is far preferable not to have illegitimate children. I would
agree with that. But the way he would achieve that, of course, is the old
Republican bootstrap- "Let them pull themselves up by their bootstraps, if they
will."
Mr. BRINKLEY: That's a rather long leap, isn't it, Sam?
Mr. DONALDSON: No. Read his speech, David. That's what people haven't been able
to do because we've all be talking about Murphy Brown.
Mr. BRINKLEY: OK. Anything further on this? I think not. Let's raise a question
about Ross Perot, who, by one poll, anyway, is leading for President of the
United States - ahead of George Bush, ahead of Governor Clinton - and he's
almost unknown until, what, two months ago. How did this happen? Is he running a
new kind of campaign for President?
Mr. WICKER: That's why he's leading.
Mr. BRINKLEY: Because no one knows anything about him?
Mr. WICKER: The more he's defined in the public mind, the less- the more he'll
lose votes from various factions who don't like whatever the definition is that
they see. I'm not suggesting that Ross Perot will decline into insignificance
here, but the fact that he seems such a powerful figure now is due, to a great
extent, to the fact that people can read into him anything they want to read
into him.
Mr. BRINKLEY: Well, don't you think he will try to continue working that way,
without actually offering any position?
Mr. WICKER: Yes, I'm sure he will, if he's smart, but he won't be able to, as
time goes on. For example, at some point, constitutionally, if he runs for
President - and I'm not persuaded that he will, finally, but if he does - he's
going to have to choose a Vice Presidential candidate. Now, most people would
think, "Well, you know, that'll strengthen him," but it won't. Choosing Vice
Presidential candidates tends to hurt presidential candidates.
Mr. DONALDSON: Well, his news management is brilliant in the way they're going
about it, because no one wants to come to election day, running for the
presidency, having all of his positions out there - or her positions, some day
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- because then, you anger a lot of people who are on the other side. If Ross
Perot had been on this program this morning and we'd asked him the same
questions about the balanced budget amendment we asked both supporters and
detractors of that amendment, he would have said - judging from his past
interviews recently - "Well, what is a sound bite? I don't have time here. Give
me a long time and I will. You want me to think through my position." He would
have dodged every intricate question of enforcement, of mandating, of
three-fifths. Now, if you want to buy that, folks, go ahead.
Mr. WICKER: Well, you raised another interesting question about Perot, which is
that TV interviews show that he has a very short fuse and over the long pull of
campaigning, that's likely to hurt him, too, because he'll lost his temper in
such a way - - I mean, he might - that the public would be disaffected.
Mr. DONALDSON: Well, you know, they think they can get a certain- all
politicians think they can get a certain mileage out of losing their temper, in
the sense, to something like me. "Well, we showed him. I mean-" but if they
don't have the answers, what they win, in a superficial sense, of having bested,
what, little old me, they lose because they don't come with a solution that
people like.
Mr. WILL: Right now, Ross Perot is a national Rorschach [sp?] test. The country
sees it and we learn about the country, not about Ross Perot and what they're
seeing in him. I don't think that the persona that Perot is showing is going to
wear well because I think what the country wants now is a little seemly modesty
from the political class. The country says, "Look, we have a lot of problems
and none of you has the answer, 50 quit running around pretending that you do."
Ross Perot has one message and it is that all problems are simple; they exist
because everyone but Ross Perot lacks courage; "Give me the reins of government
for four years and I'll solve them." That is, (A) preposterous. (B), it's vain
as the day is long because it means that he's the only honest man in America and
I think, over time, people will find that cloying.
Mr. WICKER: Well, yes, and that leads to another-
Mr. BRINKLEY: Well, he has got the lead in the polls. Is that- does that- what
we earlier were talking about, television shaping our habits, values-
Mr. DONALDSON: Well, could I just say something about what George-
Mr. BRINKLEY: -he's our television candidate, period.
Mr. DONALDSON: What George just said- I mean, it does require, as you know, a
huge ego and a certain vanity to run for the presidency. You don't want, really,
Mr. Caspar Milktoast, the guy next door, to run, George.
Mr. WILL: I understand, but I don't think the public, in this of all years, is
going to rally 'round a man who says, "All these problems are simple," 'cause
the public knows better.
Mr. WICKER: And that leads to another point about his high standing in the polls
and that is the deep unpopularity of the other two candidates. Ordinarily, our
parties produce at least one candidate that the public is enthusiastic about.
This time, the parties are producing assuming Governor Clinton is the nominee
- candidates that the public seems to be deeply- they either mistrust or they
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ABC NEWS, May 24, 1992
don't-
Mr. DONALDSON: Well, do you think it's going to the House of the
Representatives?
Mr. WILL: I think it's possible, but unlikely because I think the best way for
Ross Perot to maximize his strength is for him to come out and say, "Look, you
got Bush, you have Clinton- are you telling me that four years of Ross Perot
would be worse than these two guys?"
Mr. DONALDSON: Yes.
Mr. WILL: He can underscore that by saying, "By the way, I'll only stay there
four years., Wild horses couldn't drag me back for a second term, so take a risk
for four years." The country just might say, at that point, "How wrong can we
go?"
Mr. DONALDSON: If you still think he doesn't have to enunciate what he stands
for and how he would solve the problems.
Mr. WILL: Well, he'll have to do a little bit of enunciating, but you know,
throughout the 19th century, men running for the presidency were almost under a
constitutional ethic not to spell out their programs and we might be heading
back for that.
Mr. DONALDSON: I mean, don't you think women are going to want a definitive
answer - - he's sort of slid by it - on the question of freedom of choice? I mean,
don't you think the people out there want it?
Mr. WICKER: Well, that's one of the few things he's been pretty explicit about,
as a matter of fact.
Mr. WILL: Yeah, he's clear on that.
Mr. WICKER: I still think that American political history would suggest that the
importance of Ross Perot by next November is going to be that he may change the
outcome-
Mr. BRINKLEY: Make it quick.
Mr. WICKER: -as between Bush and Clinton, not the man himself.
Mr. BRINKLEY: We're almost out of time. Thank you all very much. In fact, we
are out of time. We'll be back with a few words about one of television's great
moments and great figures- in a moment.
[Commercial break]
Mr. BRINKLEY: Finally, it took 30 years of Johnny Carson doing his show almost
every night. It took how many jokes? I don't know- half a million and not all of
them about Dan Quayle. And in all those years, he became a part of show business
history. Indeed, he became a part of history history because, for several nights
a week for 30 years, blanketing 50 states, over time he had an audience larger
than anyone ever and he held it for all those years- a formidable record,
unlikely to be matched. Johnny Carson and I have been friends for a long time
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ABC NEWS, May 24, 1992
and in his years of great success, I have seen that he kept his head and his
good humor through it all. On Thursday night, Bette Midler sang to him an old
song from the '40s by Harold Arlen and Johnny Mercer, "One for My Baby and One
for the Road." It was an electric moment.
BETTE MIDLER: ["Tonight Show," May 22, 1992] [singing] For all of the years /
For the laughs, the tears / For the class that you showed / Make it one for my
baby / And one more for the road / That long, long road.
Mr. BRINKLEY: For the occasion, the perfect song, so perfectly sung it had
Carson in tears, along with maybe half the American people, including me.
Johnny, we'll miss you and I hope we'll see you around. For all of us here at
ABC News, until next week, thank you.
TM
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4TH STORY of Level 1 printed in FULL format.
Copyright 1992 Newspaper Publishing PLC
The Independent
May 14, 1992, Thursday
SECTION: INTERNATIONAL NEWS PAGE; Page 13
LENGTH: 734 words
HEADLINE: US dusts off its 'last weapon' to balance budget
BYLINE: From RUPERT CORNWELL in Washington
BODY:
THE WISHFUL thinking of advocates of Reaganite supply-side economics has
failed. So too has the Gramm-Rudman Act, which imposed strict limits on the
runaway budget deficit. Now a Congress basking in unparalleled disrepute is
dusting off its last weapon to bring the country's shambolic finances into order
- the venerable US constitution itself.
For years now, the notion of a ' balanced budget amendment'' has lurked in
the backrooms of Capitol Hill, as executive and legislature have failed to halt
a spiralling federal deficit which will reach $ 400bn ( pounds 221bn) in fiscal
1993, and which has quadrupled the national debt to $ 4,000bn ( pounds 210bn)
in barely a decade.
Suddenly though, a pipe-dream of the few has become the fashionable rage of
an apparent majority. Congressional leaders of both parties now predict that
within a month or two, both House and Senate will deliberate and approve a
change in the Constitution, obliging the country to balance its books.
Nor are any problems envisaged at the White House. Without such extra
discipline, the Budget Director, Richard Darman, said recently, there would be
no protection ''for all the Americans yet to be born and all the Americans who
are not now of voting age, who are going to pick up the bills if we don't
address this''.
By 1995, promoters of the measure are confident, the required amendment will
have been ratified by the required three-fourths majority of the 50 states - all
but one of which are already bound by law to produce balanced budgets of their
own.
That, at any rate, is the theory. In practice a host of issues have not been
settled. Not one of the several versions of the proposed amendment spells out
the painful details of how such fiscal rectitude would be achieved. Interest
groups are meanwhile queuing up to have particular areas of spending exempted.
In fact, according to the most widely backed variant, the amendment would
not outlaw a deficit but simply make one harder to pass. An unbalanced budget
would require approval by a three- fifths majority of both houses instead of the
simple majority at present. No one, however, has seriously examined what would
happen if the President and Congress still disagreed: almost certainly a
constitutional crisis played out in the Supreme Court.
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The Independent, May 14, 1992
Today, however, as critics of the scheme have been quick to point out, such
considerations are of less concern to congressmen than the overriding need, in
an election year, to convince their rebellious and disgusted voters that
Washington politics signifies more than the lurid scandal at the House Bank.
The whole idea was a ''cop- out'', according to a withering editorial in the
Washington Post this week. ''These sloppy, dangerous proposals are the ultimate
expression of the weakness and flight from responsibility they purport to
correct. Difficult decisions would be further postponed, ''the Constitution
should not become the permanent monument of a temporary failure of political
will''.
For their part, congressional opponents of the amendment dwell on what it
would mean in practice. Conservative Republicans raise the spectre of large tax
increases. Democrats have the opposite fear, that huge cuts would be made in
welfare programmes accounting for half of the pounds ,500bn of federal spending
each year, most notably social security and health care. Thus far, however, all
objections have been in vain. The balanced budget amendment' I is a nostrum
whose hour has come.
As expected, President George Bush and Governor Bill Clinton, his
all-but-certain Democratic challenger this autumn, scored easy victories in
Tuesday's primaries in Nebraska and West Virginia. Mr Clinton, who has begun
consultations to choose a vice- presidential running mate, now has almost 1,800
of the 2, 144 pledged delegates needed to be selected as the candidate.
Both, though, are increasingly threatened by the candidate-in- waiting, H
Ross Perot. A new survey shows the Texas billionaire carrying California in a
three-way contest. According to the California Poll, Mr Perot is backed by 37
per cent of Californian voters, ahead of Mr Bush with 31 per cent and Mr Clinton
with only 25 per cent. The Arkansas Governor, however, is credited with a narrow
lead over the former California governor, Jerry Brown, in the state's Democratic
primary, which is due on 2 June.
TM
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THE WHITE HOUSE
WASHINGTON
DATE: 6-8
TO:
Joe Dugan
in
FROM: HANNS KUTTNER
Associate Director for Health
and Social Services Policy
Office of Policy Development
Room 219, OEOB, x6563
As we discussed - a summary
of Wilson's plan.
or
State of California
HEALTH AND WELFARE AGENCY
1600 NINTH STREET, ROOM 460
SACRAMENTO 95814
CALIFORNIA
1992 MAY 20 All 9
TELEPHONE
(916) 654-3454
PETE WILSON
FAX
GOVERNOR
RECEIVED
(916) 654-3343
FAMILY
May 19, 1992
Jo Anne Barnhart, Assistant Secretary
Administration for Children and Families
U.S. Department of Health and Human Services
370 L'Enfant Promenade, S.W.
Washington, D.C. 20447
Dear Ms. Barnhart:
Attached is California's Welfare Reform package
demonstration project proposal pursuant to Section 1315 of Title
42 of the United States Code which has been the topic of
discussion during our meetings this past winter. Due to our
anticipation that State legislation will be enacted shortly in
support of the provisions, we request that the package be
reviewed and any identified issues be resolved as soon as
possible. In the meantime, we will continue to work with members
of your staff on details of the evaluation design.
This proposal is a historic attempt to alter the policy
underpinnings of California's welfare program. Proposal
components are aimed at providing work incentives, promoting
individual responsibility, supporting/reinforcing the policy of
family preservation, and addressing disturbing trends related to
teen pregnancy and school dropouts. We believe all of these
problems significantly contribute to the growing phenomenon of
government dependency. If successful, the proposal will help
hundreds of thousands of Californians to reduce or eliminate
their dependence on governmental support. California's welfare
population is growing at an alarming rate with increases of more
than ten percent per year. Less than eight percent of AFDC
recipients have earned income. The current AFDC program has very
few built-in incentives to work and, in most cases, works as a
disincentive for able-bodied recipients to find and maintain
employment. The result is that welfare recipients are relegated
to a life style dependent on government support, without
opportunity to realize their true potential and become productive
contributing members of our society. The proposed changes will
enhance and motivate these people to become self-supporting and
to break the cycle of dependency. This will result in tremendous
personal benefit to these individuals and their families and also
address several very perplexing State/national economic societal
problems.
Jo Anne Barnhart
Page Two
We estimate that the proposal will immediately save $1.2
billion annually ($579 million Federal, $580 million State, and
$26 million County with administrative costs taken into account)
in welfare costs in California. Given the current fiscal
condition of the State and Federal governments, it is imperative
that these reforms be implemented as soon as possible.
Currently, basic services are being sacrificed in order to
sustain over 2 million people on AFDC. In making welfare
recipients more responsible and productive members of society,
funds currently used to support them on welfare can be diverted
to other essential services and benefits which will ultimately
improve the quality of life for Californians as a whole.
The proposal makes several major changes in California's
AFDC program. These and other changes are discussed below.
WORK INCENTIVE
The proposal increases the work incentive in California's
AFDC program in three ways.
First, by reducing the Maximum Aid Payments (MAP) by 10
percent for recipients in their first six months and by an
additional 15 percent after six months, the proposal will reduce
the financial incentive to choose welfare over work. In his
"Work and the U.S. Welfare System: A Review, May 1987 (DHHS
contract No. HHS-OS-100-86-0021), Robert Moffitt states that "in
the economic model, the offer of a payment to nonworkers
decreases the need to work to generate consumption (the 'income
effect'). He goes on to state that the fact that "1986 monthly
AFDC maximum levels are in excess of monthly earnings from full-
time minimum wage" earnings in eight states (including
California) strongly suggests that such work disincentives are
present. Currently in California, households of four or more
with one full-time minimum wage worker would receive more in an
AFDC grant than they would earn from employment. If the total
economic benefits (i.e., the wage plus the Earned Income Tax
Credit, less work expenses, including child care, less taxes,
especially FICA) of work are compared to the total welfare
benefits (i.e., AFDC, Food Stamps, and Medicaid), many households
of two and three are also better off on welfare than with
employment. This work disincentive has existed throughout the
1980's and undoubtedly accounts for much of the rapid increase in
California's AFDC caseloads as evidenced by the fact that less
than eight percent of AFDC recipients have earned income. We
therefore believe that the proposed reduction in the MAP, for
which we are requesting a waiver of Title 42 of the United States
Code, Section 1396a(c), is an essential component of our welfare
reform proposal.
Jo Anne Barnhart
Page Three
Second, by leaving the Minimum Basic Standard of Adequate
Care (MBSAC) at the 1990 levels, the proposal will allow
recipients to retain net non-exempt income from all sources,
including work, in an amount equal to the difference between the
MBSAC and the MAP. This equates to 14 percent of the MBSAC for
recipients in their first six months and 27 percent after six
months. It is noteworthy that the heads of most AFDC households
would only have to work a few hours per week in order to generate
enough net non-exempt income to take full advantage of these work
incentives. This type of work incentive is also key to our
proposal because, by encouraging recipients to work, even while
they remain on welfare, it will (1) raise their self-esteem,
since they will be contributing to their own support, (2)
increase acceptance of the AFDC program by the general
population, since much of the current objection to the program
surrounds the perception that it supports able-bodied adults
without asking anything of them in return, and (3) allow
recipients, through exposure to the labor market and through
actual work experience, to increase their "human capital
formation", and thereby increase their future potential earnings.
As you know, these are all themes at the cutting edge of recent
works on welfare reform by such divergent thinkers as David
Ellwood (Poor Support), Lawrence Mead (Beyond Entitlement), and
Stuart Butler and Anna Kondratas (Out of the Poverty Trap).
Third, by eliminating the time limits on the $30 and 1/3
earned income disregard, the proposal will allow for a smoother
transition to total independence from welfare for families as
their incomes from employment increase. Without the extension of
this disregard, AFDC families have only minimal financial
incentives to increase their earned income over a broad band of
potential incomes. The disregard gives them a financial
incentive to work more hours and to seek higher wage jobs by
allowing them to retain one third of any increase in their
earnings (at least up to the point where the 185 percent gross
income limit causes them to leave aid altogether).
In addition to increasing financial incentives to work, the
proposal would also eliminate a major barrier to employment, the
100-hour work rule, for which we are also requesting a waiver.
This rule is inconsistent with the basic thrust of our welfare
reform proposal. For larger AFDC households, the 100-hour work
limit could actually prevent the household from earning enough
income to take full advantage of the work incentive that would
result from the proposed gap between the MBSAC and the MAP.
Our proposal recognizes that some recipients are not able to
work due to the incapacity or age of the head of household.
Thus, these recipients would be exempted from the 15 percent MAP
reduction that would otherwise occur after six months on aid.
Jo Anne Barnhart
Page Four
MEDICAL CARE
We also recognize the key role that the availability of
Medicaid services without a share of cost plays for many low-
income households, especially those newly terminated or about to
be terminated from AFDC due to increases in earnings. For some,
the prospect of losing eligibility to Medi-Cal could overwhelm
any other financial incentives provided by our welfare reform
proposal. We are therefore seeking the Secretary's concurrence
and approval that, if California retains the current Medicaid
maintenance need levels, the lower spenddown (a result of the
higher maintenance need levels) is an appropriate cost of the
demonstration project, and Federal financial participation would
be made available under Title 42, United States Code, Section
1315a(2).
To further alleviate concerns about potential loss of
medical benefits and also to provide additional incentives for
California's low-income families to free themselves from the
"welfare trap," California will implement CheckUp, a new State-
supported health insurance program which will provide low-income
pre-schoolers up to the age of six with access to prevention and
primary care services.
The CheckUp program is designed to provide subsidized
private health insurance to an ever-increasing segment of the
population -- uninsured low-income children, many of whom are the
dependents of working parents. More than 300,000 uninsured
children under age six will be eligible for this coverage in
California. Implementation of CheckUp will begin in FY 1992/93.
A second, longer-term goal of CheckUp will be to integrate
children currently served by Medi-Cal into the streamlined
private insurance system established by CheckUp to offer
prevention and primary. care services to all of California's pre-
schoolers. This long-term integration will ultimately reach more
than one million additional children under age six.
The longer term integration of Medi-Cal and CheckUp will
begin as Federal waivers are obtained and as provider capacity
and financial resources allow. In the short-term, the State will
use residual funds (CheckUp program funds not used to subsidize
participation for the uninsured) to enhance Medi-Cal prevention
and primary care services for pre-schoolers.
In addition to the obvious health benefits of such a
program, we also expect it to relieve the pressure that some
working families feel to reduce their incomes in order to qualify
for Medicaid.
Jo Anne Barnhart
Page Five
EMPLOYMENT SERVICES
We recognize that financial incentives to work may not be
enough for some recipients, especially those who lack job search
skills and those who are simply having trouble finding work on
their own. To address this, we are also proposing a new JOBS
component to provide voluntary up-front job club workshops to
recipients in their first six months on aid who are not being
served by GAIN. As you know, job club workshops have been proven
to be cost-effective in the past and we believe that they will
prove extremely beneficial when combined with significant
financial incentives to work. We believe that the proposed Job
clubs will be more beneficial on a solely volunteer basis. The
individuals subject to the grant reductions under this proposal
will be highly motivated to increase earned income through work
and will volunteer. It is under this basic concept that we are
requesting waiver of the good cause, conciliation and sanction
sections of the Federal laws and regulations for these job club
workshops. We intend that these workshops be a strong, positive
support of our work incentives. We also believe that our current
GAIN (JOBS) program can be better tailored to serve clients in
the new more work-oriented AFDC environment that will result from
our proposal. Thus, we are currently exploring several options
for redesigning GAIN to make it more work-oriented.
CALIFORNIA RELOCATION GRANT
The proposal reduces the incentive for families to migrate
to California for the purpose of obtaining higher aid payments.
This would be accomplished by limiting (for a 12-month period)
the grant level for families moving to California to the lesser
of California's grant level or the MAP of the State of previous
residence.
MAXIMUM FAMILY GRANT
The proposal encourages family responsibility by capping the
MAP to exclude any children conceived while the mother or father
was receiving aid. It is important to note that such children
would be counted in determining the appropriate MBSAC for the
family and would be covered by Medicaid.
TRANSITIONAL GRANT
As indicated above, the proposal would reduce a family's MAP
after six months on aid by 15 percent. We believe that it is
important to provide six months of financial assistance at the
higher transitional level in order to allow able-bodied adult
recipients to overcome temporary economic and family setbacks.
Jo anne Barnhart
Page Six
This 15 percent reduction will not be imposed on families in
which the adult caretaker is disabled and receiving SSI/SSP or
over 60 years of age nor will it apply to a minor parent living
independently and regularly attending school.
CAL LEARN
Cal Learn will encourage pregnant and parenting teens to
stay in school by providing a $50 per month incentive payment or
a $50 per month grant reduction based on school attendance. In
addition, Cal Learn participants living independently will not be
subject to the 15 percent transitional grant reduction referenced
above if they are regularly attending school. We believe that,
in the long run, keeping these children in school will increase
their parenting skills, enhance their earning potential and
reduce their chances of long-term welfare dependency. To further
assist the teen parent, child care services, necessary
transportation to and from the child care provider, ancillary
expenses and case management will be provided to Cal Learn
participants under the JOBS Program, but outside of the GAIN
program.
TEEN PREGNANCY DISINCENTIVE
The proposal also includes a provision which restricts the
conditions under which minors who have children can receive AFDC.
The additional condition of eligibility is that such minors can
be eligible for AFDC only if they remain at home with their
parent (s) or legal guardian. Current requirements provide that
the income of the parent(s) would also be considered in
determining the minor's eligibility. The provision also requires
that the AFDC payment be made directly to the parent or guardian
on behalf of the minor. The provision also recognizes certain
specified exceptions to the requirement that the minor live with
his/her parent. These exceptions were developed to ensure that
the minor is not forced to live in an unsafe or inappropriate
environment. We believe that this welfare reform component will
discourage teen pregnancy and encourage families to stay intact.
Though not a part of this demonstration project, the Wilson
Administration currently has the following three major family
planning initiatives under development which will also help
address the teen pregnancy problem. "Education Now and Babies
Later" is a multifaceted preventive health information and
education initiative that targets teens between the. ages of 12-14
to help them postpone sexual activity. "Expanded Office of
Family Planning (OFP) Teen Counseling Services" targets AFDC,
GAIN, Foster Care and other teens at risk of pregnancy due to
ineffective use of contraceptives or lack of access/knowledge of
OFP Services. "Expanded Adolescent Family Life Program" (AFLP)
expands AFLP case management services in counties with the
highest teen birth rates.
Jo Anne Barnhart
Page Seven
CHILD SUPPORT
State legislation signed by the Governor in 1991 will
increase most child support awards due to a revised statewide
mandatory formula; prohibit State licensure of professionals
(e.g., realtors, contractors) who refuse to come into compliance
with court-ordered support obligations; require labor unions and
public utility companies to provide information to child support
agencies; and mandate maintenance of Social Security Numbers as
part of the Department of Motor Vehicles' driver's license and
vehicle registration data bases. A major statewide automation
project, now in the procurement process, will significantly
increase the effectiveness of locate, enforcement and collection
actions on behalf of single parent families, thus decreasing
their need for public assistance. These activities will
complement the overall welfare reform effort by increasing child
support collections on behalf of AFDC recipients and former
recipients, as well as other single parents needing assistance
enforcing support orders.
We have attached amended sections of the IV-A State Plan to
implement portions of the welfare reform proposal. In addition,
we will propose State legislation to modify California's GAIN
program and to make it more employment oriented and remove
program barriers to employment in an effort to help welfare
recipients move more quickly to paying jobs.
We are convinced that our comprehensive statewide proposal
will significantly reduce welfare dependency in California. Yet
many of its features, the extension of $30 and 1/3 and the Cal
Learn component, for example, involve significant investments
which will further Governor Wilson's commitment to preventive
government. In combination with other initiatives that we are
proposing in the Health and Welfare area, we believe that our
welfare reform proposal will not only result in savings to the
taxpayer but in reductions in poverty and improvements in the
quality of life for California's less fortunate families.
All cost/savings estimates are subject to revision as part
of our April Subvention revision of the Governor's Budget;
revised numbers will be provided to you as soon as the Subvention
process is completed.
Jo Anne Barnhart
Page Eight
To facilitate expeditious review of the proposal, we have
separately addressed each proposal component. If you have any
concerns about any of the concepts, we would like to discuss them
with you as soon as possible in order to assure a rapid approval
date. Questions should be directed to me at (916) 654-3345, or
John Healy, Interim Director of the Department of Social
Services, at (916) 657-2598. Questions concerning Medicaid
should be directed to John Rodriguez, Chief Deputy Director of
Programs, Department of Health Services at (916) 654-0391.
Sincerely,
RUSSELL S. GOULD
Secretary
Attachments
cc: Ms. Christine Nye, Director
Medicaid Bureau
Health Care Financing Administration
East High Rise Building, Room 200
6325 Security Blvd.
Baltimore, MD 21207
Ms. Mary Kennison, Director
Office of Demonstrations
and Evaluations
Health Care Financing Administration
2430 Park Meadows Building
6325 Security Blvd
Baltimore, MD 21207
Mr. Lawrence L. McDonough
Associate Regional Administrator
Division of Medicaid
Health Care Financing Administration
75 Hawthorne Street, Fourth Floor
San Francisco, CA 94105
Sharon Fujii
Regional Administrator
Administration for Children and Families
50 United Nations Plaza, Room 450
San Francisco, CA 94102
- me.
APPLICATION FOR
& DATE SUBMITTED
Applicant teamsfer
FEDERAL ASSISTANCE
& TYPE or BURNEACH
1 AGE RECEIVED BY STATE
Store Application convier
Application
Protessication
Conservation
Construction
a DATE RECEIVED BY FEDERAL ADDICT
Federal tentiner
ReniConstruction
N/A
1 APPLICANT INFORMATION
Lager Name.
Organizatione LIVE
State of California
Department of Social Services
ACCRESS Lane ON. county. stam. and as code):
Name and twichone number of 70 person to - spreaced on matters main;
- ACCREADOR (gro are acce)
744 P Street
Kathy B. Lewis, Chief
Sacramento, CA 95814
AFDC Program Branch
(916) 657-2128
& EMPLOYER EXEXTIFICATION NUMBER IDNE
7. me a APPLICANT: uner associate letter in DOE)
A Store
M Independent School Date
-
a County
1 Susu Controlled instruction of Higher Lawrning
C Municipal
d. Private University
& TYPE OF APPLICATION
D. Tewrerup
K thoun Troe
XX
Name
Continuation
Revenue
E inversists
L Individual
F. Intermunicial
M Prote Organization
If Reversion, enter accreans letter(s) in DON(S).
0. Detrict
N Other (Soecify)
& increase Award
B. Decrease Award
C. Increase Duranon
D Decrease Duration Other (specify):
& NAME OF FEDERAL ASDICY:
Department of Health and Human Services
N/A
Administration for Children and Families-
16. CATALOG - FEDERAL DOMESTIC
11. DESCRIPTIVE TITLE OF APPLICANTS PROJECT:
ASSISTANCE NUMBER
13
8
812
TITLE Assistance Payments
California Welfare Reform
Research & Demonstration Project
Demonstration Project
12 AREAS AFFECTED BY PROJECT ICIDEL countries SIZES. OKI
Statewide
12 PROPOSED PROJECT
" CONGRESSIONAL DISTRICTS or
Start Date
Ending Date
a Applicant
b. Provect
3, 4
Statewide
11. ESTIMATED FUNDING:
18. is APPLICATION SUBJECT TO REVIEW BY STATE EXECUTIVE ORDER 12372 PROCESS?
s
8
a
YES THIS PREAPPLICATION/APPLICATION was MADE AVAILABLE TO THE
& Faceral
7,500,000
STATE EXECUTIVE ORDER 12372 PROCESS FOR REVIEW ON
a Applicant
1
8
DATE
& State
8
8
7,500,000
b NO.
PROGRAM IS NOT COVERED BY ED. 12372
a Local
$
8
OR PROGRAM HAS 1.5T BEEN TELECTED BY 5000 -
a Diner
8
8
1. Program income
$
8
17. a THE APPLICANT DELIVERENT 8 ANY FEDERAL DESTI
Yes E "Yes" smach an signaturetion.
No
0 TOTAL
$
20
15,000,000
18. TO THE BEST - MY DIOWLEDGE AND MLSF. ALL DATA - THIS ARE TRUE AND CORNECT. TVE DOCUMENT MAS B/TEW DULY
AUTHORIZED BY THE DOVERNING BOOT 8 THE APPLICANT we THE APPLICANT We COMPLY WITH THE ATTACHED ASSURANCES THE ASSISTANCE a AWARDED
a. Techno Name of Authorized Represe surve
1 Time
C Terephone: number
Interim Director
(916) 657-2598
John D. Healv
0 Date Signed
& Signature of Authorized Representative
Xohn PICK - D duy
Standard Form 424 (REV ass:
Provide
Presented by OMB Circuar 4152
Authorized for Local Reproduction
DMI Approval No.
APPLICATION FOR
2. DATE SUBMITTED
Applicant teanther
FEDERAL ASSISTANCE
L - or SUBMISSION
2 DATE RECEIVED BY STATE
State Application
Application
Presselication
Construction
Construction
a DATE RECEIVED BY FEDERAL ADDICT
Federal townuher
is
Non-Canstruction
Non-Construction
N/A
& APPLICANT INFORMATION
Lacal Name.
State of California
Organizational Unit
Department of Health Services
Address - city. county. stam. and mp code):
Name and telephone number of the person to to sonucted on matters moving
the application (me area code)
714 P Street
Sacramento, CA 95814
John Rodriguez
(916) 654-0391
& EMPLOYER IDENTIFICATION NUMBER HOWE
1. TYPE of APPLICANT: lenter appropriate letter in box)
a Sure
H. Independent School Diet.
-
8. County
& State Controlled instruction of Higher Learning
c Municipal
d. Private University
& TYPE OF APPLICATION
D. Tewnship
K thoun Tribe
How
Continuation
Revision
E inverstate
L Individual
F. Intermunicipal
M Prote Organization
E Revert, enter accrephane letter(s) in box(es).
a. Special District
N Other (Specify)
a increase Award
B. Decrease Award
C. Increase Duration
D Decrease Duration Other (specify):
1 NAME OF FEDERAL ADDICT:
Department of Health and Human Services
Health Care Financing Administration
M. CATALDO 8 FEDERAL DOMESTIC
11. DESCRIPTIVE TITLE OF APPLICANTS PROJECT:
ASSISTANCE NUMBER
a
TITLE
California Welfare Reform
Demonstration Project - Medicaid
12 AREAS AFFECTED BY PROJECT (CIDOL countries states. OK.F
Elements
11 PROPOSED PROJECT
14 CONGRESSIONAL DISTRICTS OF
fun Date
Enoing Date
& Applicant
D Provict
3, 4
Statewide
11. EXTIMATED FUNDING
18. is APPLICATION SUBJECT TO REVIEW BY STATE EXECUTIVE ORDER 12372 PROCESS?
& Faceral
$
8
& YES. THIS PREAPPUICATION/APPLICATION WAS MADE AVAILABLE TO THE
(See
STATE EXECUTIVE ORDER 12372 PROCESS FOR REVIEW ON
accompanying
a Appricant
$
8
DATE
SF 424 submitted
= State
$
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by Calif. Dept. of
b
NO.
PROGRAM 13 NOT COVERED BY E.D. 12372
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OR PROGRAM HAS 1.37 BEEN SELECTED BY 5 5.
a Other
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17. = THE APPLICANT DELINOUENT 8 ANY FEDERAL DEXT)
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X "You" attach an experination.
No
: TOTAL
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18. TO THE BEST 8 APT KNOWLEDGE AND ALL DATA . THIS APPLICATION/PREAPFLICATION ARE TRUE AND CORRECT. THE DOCUMENT MAS BOTH DULT
AUTHORIZED BY THE DOVERNING BOOT OF THE APPLICANT AND THE APPLICANT will COMPLY WITH THE ATTACHED ASSURANCES w THE ASSISTANCE = AWARDED
& Tecms Name of Authorized Represe surve
b Time
: Teachere number
John Rodriguez
Deputy Director of Programs
(916) 654-0391
. Date Signed
a Signature of Approved Representative
Previous John
Enjons No: LISSON Roduging
4/7/92
Sundard Form 624 (REV 4-88)
Presented BY DMB Circular A-102
Authorized for Local Reproduction
DI
Flood Disaster Protection Act o! 1973 (P.L. 83-2341
-ncuires recipients in a special flood besard
Historic U.S.C. Preservation 470). EO 11583 (identification and
area & A Licipate in the program andio purchase
protection of bistoric properties). and the
disurance if the soial 5081 of insurable
Archeological and Historic Preservation Act of
istruction and acquisition is $10,000 of more.
1974 DE L.S.C. dEga.1 et seq.).
Will comply with environments' standards which
14. Will comply with P.L. 83.348 regarding the
my be prescribed pursuant to the following: (a)
institution of environmental Quality control
development, and related activities supported by
protection of human subjects involved in research.
measures under the National Environmental
this award of assistance.
Policy Act of 1969 (P.L. 91-190) and Executive
15. Will comply with the Laboratory Animal Welfare
Order (EO) 11514: (b) notification of violating
Ac: of 1566 (P.L. 85.544, as amended. 7 U.S.C.
facilities pursuant so EO 1173E; (c) protection of
2131 et mg.) persining to the are, handling. and
wellands pursuant to EO 11990; (d) evaluation o!
treatment of WATED blooded animals held for
flood hererds in floodplains in accordance with EO
research, teaching. or other activities supported by
11953; (e) assurance of project consistency with
this award of assistance.
1be approved Siris management program
developed under the Coasts) Zone Management
16. Fill comply with the Lead.Based Paint Poisoning
Ac: of 1972 (16 U.S.C. 11 1451 el BEQ.); 15)
Prevention At. (42 U.S.C. 11 4501 e! seq.) which
conformity of Federal actions to Siste (Clear Air)
probibits the use of lead based paint in
Implementation Plans under Section 176(c) of the
construction of rehabilitation of residence
Clear Air AC. of 1955, as amended (42 U.S.C. I
7401 =: seq.): (g) protection of understound sources
17. Will cause to be performed the required Financial
of drinking wale: under the Sile Drinking Water
and compliance audits in accordance with the
Ad of 1974. LS amended, (P.L. 53-523): and (h)
Single Audit Act of 1964.
protection of endangered species under the
Endengered Species ACL of 1973. 25 amended, (P.L.
18. Will comply with all applicable requirements of all
other Federal irws, executive orders. regulations
93-205).
and policies governing this program.
12 will comply with the Wild znd Scenit Rivers h=:
1955 (15 U.S.C. 11 1271 e: seq.) related 10
Potecting components or potential components of
actional will and scenic rivers system.
SIGNATURE Di AUTHORIZED CERTIFYING OFFICIAL
TITLE
Interim Director
John Bldealy
DATE SUBMITTED
DESARTATION
Department of Social Services
= 4765 back
- U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES
Attachment CERTIFICATION REGARDING DRUG-FREE WORKPLACE REQUIREMENTS
GRANTEES OTHER THAN INDIVIDUALS
BY signing and/or submitting this application or grant
agreement, the grantee is providing the certification set
out below.
This certification is required by regulations
implementing the Drug-Free Workplace ACI of 19EE, 45 CFR
Part 75, Subpart F. The regulations, published in the
January 31, 1989 Federal Register, require certification by
grantees thet they will maintain a drug-free workplace. The
certification set DUE below is a material representation of
fact upon which reliance will be placed when the U.S.
Department of Health and Human Services determines to award
the grant. False certification OI violation of the
certification shall be grounds for suspension of payments.
suspension = termination of the grant, or governmentwide
suspension = debarment.
A. The grantee certifies that it will provide a drug-
free workplace by:
(2) Publishing 2 statement notifying employees that the
unlawful manufacture, distribution, dispensing,
possession, == use of 2 controlled substance is
prohibited in the grantee's workplace and specifying
the actions that will be taken against employees fb=
violation of such prohibition;
(b) Establishing 2 drug-free awareness program =0
inform employees about:
(1) the dangers of doug abuse in the workplace;
(2) the grantee's policy of maintaining a drug-free
workplace;
(3) any available drug counseling, zehabilitation, and
employee assistance programs; and
( ≤ ) the penalties that may be imposed upon employees
for drug EDUSE violations occurring in the workplace;
(c) make it E requirement that each employee =0 be
engaged in the performance of the grant be given E copy
of the statement required by paragraph (E);
( ≤ ) Notifying the employee in the statement required
by paragraph (a) that, 25 a condition of employment
under the grant, the employee -111:
(1) abide by the terms of the statement; and
(2) notify the employer of any criminal drug statute
conviction for a violation occurring in the workplace not
later than five days after such conviction;
(e) Notifying the agency within ten days after
receiving notice under subparagraph (d) (2) from an
employee or otherwise receiving actual notice of such
conviction;
(:) Taking one of the following actions, within 30
days of receiving notice under subparagraph (d) (2),
with respect to any employee who is ED convicted:
(1) taking appropriate personnel action against such
an employee, up to and including termination; or
(2) requiring such employee to participate
satisfactorily in a trug abuse assistance or
rehabilitation program approved for such purposes by 2
Federal, state or local health, law enforcement, =
other appropriate agency;
(g) Making 2 good faith effort to continue to maintain
= drug-free workplace through implementation of
paragraphs (E), (b), (c), (d), and (f).
E. The grantee shall insett in the space provided
below, the size (s) for the performance of work done
connection with the specific grant (Street address,
city, county, state, ==p code):
State-ide
Joe Dugan-
More information
from Hanns Kuttur
the second piece is
a draft of what
will eventually be
a background paper
on welfare.
Stephanie
Fossan
Welfare Reform
Important because the number of people on welfare is
growing and is now at the highest number ever.
The recent history of welfare reform has focused on
welfare-to-work initiatives.
-
Implementing the JOBS [Job Opportunities and Basic
Skills] program has been an important activity of
this Administration.
-
JOBS means that [250,000] welfare recipients are
today engaged in some kind of activity to get them
into or ready for the workforce, participating in
"job clubs" to provide mutual support for job
seekers, in a literacy program, etc.
Now we are making a significant turn in welfare reform.
-
Welfare-to-work effort is a descendant of the income
hypothesis: what makes people poor is that they don't
have enough money. Therefore, job training or job
search will increase incomes.
-
Now we are confronting a new agenda: an agenda that
focuses on values. Our society is saying it wants
people on welfare to share the values of mainstream
society: work, family, and striving for success in
many ways.
And, consistent with our American way of doing things,
this new agenda is moving forward because of actions at
the state level, not in Washington.
-
Wisconsin: Two years, "Learnfare." This year:
Parental and Family Responsibility [White House event
in March. ]
-
This week: Maryland's waiver approved [we hope.]
Focus: Provide incentives to welfare parents to see
that their children get health care and make sure
their children attend school.
-
And also Governor Wilson's proposal.
We are in a new stage of welfare reform, designed in the
states and being carried out by the states. The federal
role is largely one of getting out of the way, although
there is a leadership role as well -- point to the place
on the horizon where we should be headed.
-
Where to go:
-
independence, not dependence - therefore target
those on/likely to be for a long time.
-
responsibility while on welfare -- enforcing
social obligations.
I
lyfathers
Jone
The three largest means-tested federal programs are
Medicaid, Food Stamps, and Aid to Families with Dependent
Children (AFDC). Those who receive assistance from these
programs are the focus of the welfare reform effort. Each is
growing rapidly.
Participants
13 Estimated
Combined
Federal Cost
Federal/State
(FY 1993)
Ber 248-8926
(in millions)
Godwin
AFDC
13,649,000
$14,652
Food Stamps
25,042,000
$28,000
$28,000
John
4
Medicaid
25,255,067
$84,401
$ 140,896
Klemm
AFDC and Food Stamps participants as of 1992; Medicaid as of 1990
FTS
646-
AFDC provides cash assistance to children and adults who
(301) 966 are in need; Food Stamps provides vouchers that can be used to
purchase food; Medicaid pays for medical assistance. The
programs have significant overlap. All AFDC recipients are
eligible for Medicaid; 85.2 percent of AFDC families receive
Food Stamps. Beyond this inner core of welfare programs exists
more than a hundred other federal programs targeted to the
poor. Among AFDC recipients, 9.6 percent live in public
housing. All AFDC children are eligible to participate in Head
Start before they start school. Once in school, the federal
school lunch program provides free or subsidized school
lunches. During the summer, older poor children are eligible
for the summer youth employment program.
Who gets welfare?
AFDC gives cash assistance to families and children with
income and assets below specified levels when a parent, usually
the father, is absent or incapacitated. Each state sets the
income level at which people begin to receive AFDC benefits as
well as the overall level of benefits.
not death a parent
Table on '89 93 increases???
The absence of two parents because of divorce, separation, or
never marrying together provide the basis of eligibility for
more than 85 percent of families that receive AFDC.
AFDC Recipient Characteristics
Reason for Receipt
Parents Present
(Incapacitated/Unemployed)
Death
Divorce/Separation
Never Married
0%
10%
20%
30%
40%
50%
60%
Percentage
1969
1989
The proportion due to out-of-wedlock births has almost doubled
since 1969.
The rising share of AFDC households headed by never-
married parents follows the demographic trend toward a higher
proportion of children being born outside of marriage.
[CHART: Trends in percent born out of wedlock.]
Children Born Out-of-Wedlock
As Percent of all Births
70%
60%
50%
40%
30%
20%
10%
0%
1970
1980
1985
1987
All Women
White Women
Black Women
Growth in the proportion of never-married AFDC parents
compared to divorced or separated parents has produced a
decline in the average size of an AFDC household.
[(
S.
AFDC Recipient Characteristics
Average Family Size
4.2
4
3.8
Persons Per Family
3.6
3.4
3.2
3
2.8
2.6
1969
1973
1975
1979
1983
1986
1989
Teen mothers are more likely to have their babies out-of-
wedlock than older mothers. This contributes heavily to
welfare receipt. Among AFDC recipients in 1988, 59 percent
were 19 or younger when they gave birth to their first child.
Among non-poor mothers, 25 percent were 19 or younger.
The age at which a parent begins to receive AFDC is
significant in predicting how long he or she will receive AFDC.
Younger first-time recipients are more likely to become long-
term recipients.
AFDC Recipient Characteristics
[CHART: Age
Age at Beginning of First Spell
50%
40%
30%
20%
10%
Spells of 10+ Years
0%
New Recipients
Under 22
22-30
31-40
40 plus
Work
The most important variable that determines whether a
child is poor or on welfare is whether or not the child's
parent S work.
Only 8.5 percent of AFDC households reported any earnings
in 1989. Recent expansions in the Earned Income Tax Credit
(EITC) have increased the returns to work. This year a single
mother with a child who works full time, even at the minimum
wage, will, with the EITC payment, have an income above the
poverty level. Such a minimum wage earning parent can expect
an EITC payment of $1,311. Those who qualify for the maximum
EITC will receive $2,189 this year.
Education
Education is an important factor in determining what energ a
single mother can earn and whether she is likely to need to
turn to welfare.
Among female heads of AFDC households, 57 percent have
completed high school or obtained a General Equivalency Diploma
(GED.) Among non-poor women with children, 88 percent have
completed high school.
CHART
Short-term Receipt V. Long-term Dependency
For some, welfare programs provide temporary assistance.
For others, receiving welfare continues SO long that it can be
termed a way of life. Welfare reform is unlikely to affect the
changes in life circumstances that lead to relatively short
stays on welfare, for example, women who find themselves
suddenly abandoned by their husbands. But, welfare reform can
change the circumstances and incentives faced by those who make
up the greatest share of the welfare rolls at any one time,
those who are the long-term dependent, likely to be receiving
welfare for eight years or more.
Two views provide very different pictures of dependency.
Of a group of mothers beginning to receive AFDC, those for whom
welfare will be a short-term experience make up the largest
share. About one-half can be expected to leave AFDC within two
years. However, a snapshot view of all those receiving AFDC at
one moment in time provides a very different picture of the
recipients. More than half are in the midst of a period of
receiving welfare that will last eight years or more.
[CHAP
LENGTH OF TIME ON WELFARE
ecipients]
65%
"Long Termers"
35%
o
"Short Termers"
U
At any point, 65% of recipients have been on welfare
for 8 or more years
[put food stamps chart here or in later Food Stamp-
specific part?]
Getting off welfare
While the AFDC rolls are dominated by long-term
recipients, nearly half of those coming on the welfare rolls
will be off in two years. Reasons for leaving are lead by
marriage and increased earnings.
AFDC Recipient Characteristics
Events Associated with Endings of Spells
Marriage
35%
[CHART:
Children Leave Home
11%
Other
Increased Earnings
14%
26%
Other Government Payments
14%
Other factors that distinguishes short-term from long-
term recipients (when long-term recipients are defined as those
recipients who have received welfare benefits for three out of
the last five years) are:
-
Number of children. The more children, the less
likely a family will get off the rolls. Three in ten
long-term recipients have three or more children,
compared to two in ten short-term recipients, and one
in ten non-poor mothers.
-
Teen motherhood. 43 percent of long-term recipients
were 17 or younger at the birth of their first child,
compared to 25 percent of shorter term recipients.
Work experience. Those who have some work history
leave welfare faster than those who never worked
before. what are the number 02 the ?
Food Stamps/Medicaid (different demographics)
alex white
/
Lena Lee
readable jaavocacy
z
June 21 - family value week
A STRATEGY FOR WELFARE REFORM will have a spece
announcing
Apaper popular
Introduction
1 approach
Principles for Welfare Reform
2
The Current Welfare System
4
The Administration's Welfare Reform Strategy: Achievements
5
Implementation of the Family Support Act
5
Expansion of the Earned Income Tax Credit
6
Job Training 2000
6
Other current welfare-related initiatives
7
Laboratories of Democracy: The States
9
Where We Are
10
The Administration's Goals for the Future: Policy Options
14
Actions that can be accomplished under current law
15
Working with states to develop waivers that fit their needs
16
Encouraging specific waiver proposals
17
Actions that require legislation
19
Additional Waiver Authority
20
Expanding Options for Program Waivers
21
Removing Obstacles to Opportunity
23
ii
Summary
24
Appendix A: Achieving a Balance Between State Innovation, Research
Standards, and Budget Neutrality
25
Summary statement of the issue
25
Background
26
A STRATEGY FOR WELFARE REFORM
Americans are the most generous people on earth. But we have to go
back to the insight of Franklin Roosevelt who, when he spoke of what
became the welfare program, warned that it must not become 'a narcotic'
and a 'subtle destroyer of the human spirit.'
Welfare was never meant to be a lifestyle; it was never meant to be a
habit; it was never supposed to be passed from generation to generation
like a legacy. It's time to replace the assumptions of the welfare state
and help reform the welfare system.
President George Bush
State of the Union address
January 28, 1992
Introduction
Welfare benefits and income assistance can help those in need. For the elderly
and disabled individuals, welfare programs provide needed financial assistance.
However, for too long, such assistance has entangled able-bodied welfare recipients
in a safety net. For the able-bodied, these streams of assistance must change from
operating as part of a welfare state to being ladders to an opportunity society. Their
objective must be to assist recipients to move into the economic mainstream, to
2
achieve greater self-reliance, and to become a part of their community. All Americans
should have the opportunity for productive and meaningful lives, and the talents and
abilities of all individuals are needed to meet the challenges of the next century. To
achieve that end, the President pledged to improve the welfare system in his 1992
State of the Union address.
This paper presents the Administration's strategy and plans for welfare reform.
It begins with a statement of principles for goals of welfare policy, describes the
current welfare system, and presents the Administration's achievements to date.
Finally, the paper provides a set of policy options for the future to carry forward the
President's commitment to comprehensive reform.
Principles for Welfare Reform
The Administration believes that an effective welfare system should create
conditions of greater economic opportunity and personal responsibility for able-bodied
welfare recipients --- to enable them to leave the welfare system at the earliest
possible time, and thereby participate fully in their community. Achieving this goal
obviously would not end the need for public assistance programs, but rather would
mean that all those who find themselves on the welfare rolls would have opportunities
to become self-sufficient.
3
An effective welfare system consistent with this goal would operate as a ladder
as well as a safety net. It would help able-bodied welfare recipients receive education
and training to find jobs, and hence achieve the dignity and self-respect that flow from
economic self-sufficiency.
Consistent with these objectives, the Administration's welfare policy is intended
to promote:
Personal responsibility and independence -- to end welfare dependency, to
create opportunities for all low-income Americans to become productive
members of society;
Family responsibility -- to educate individuals to understand the responsibilities
of the childbearing decision, to encourage the rearing of children within the
structure of the family, to encourage marriage and encourage families to stay
together, and to promote school attendance among children in welfare families.
Economic opportunity -- to encourage welfare recipients to enroll in job
training programs, to help people start their own enterprises, to give individuals
greater incentives to save money, and to create new jobs in areas where
welfare recipients are concentrated; and
4
Sound administration -- to make every effort to administer programs
efficiently, to prevent fraud, and to deter those who would abuse these
programs and undercut taxpayers' support. for these public assistance services.
In order to achieve these goals, the Administration looks first to states'
proposals to develop innovative welfare programs. Many such programs exist or are
under discussion. Comprehensive programs for teenage parents encourage these
individuals to attend school, live with their parents, and avoid bearing children outside
marriage. Plans that strengthen work requirements help recipients move from the
welfare system to the workplace. Policies that promote parental responsibility require
that parents exercise their parental role to promote the well-being of their children in
exchange for receiving benefits. The Administration seeks to encourage states to
develop programs reflecting these principles.
The Current Welfare System
Individual states currently operate welfare programs under guidelines from
Federal agencies. The Department of Health and Human Services (HHS) administers
Aid to Families with Dependent Children (AFDC), the child support enforcement
program, Supplemental Security Income (SSI) program, and Medicaid; the Department
of Agriculture manages Food Stamps and other food assistance programs; and the
Department of Housing and Urban Development (HUD) oversees housing programs.
5
Current law allows states substantial flexibility in the design of the AFDC and Medicaid
components of their welfare programs. Hence, innovations in welfare have
concentrated on changes in these programs.
The Administration's Welfare Reform Strategy: Achievements
Since 1989, the Administration has undertaken a number of initiatives that seek
to reform the current welfare system. Consistent with the objectives identified earlier,
these efforts have provided education and job training for able-bodied recipients as
well as requiring work as a condition for receiving benefits. In addition to improving
the welfare programs themselves, these initiatives have also improved other programs
that serve our poorest citizens.
Implementation of the Family Support Act
A major Administration project in changing the operation of the AFDC program
has been implementation of the Family Support Act of 1988 (FSA). The FSA began to
change the focus of AFDC from income maintenance to education, employment, and
child support enforcement. It provides states with broad flexibility to design basic
education and work-to-welfare programs that meet the needs of individual families.
In response to the legislation, states have begun to design programs to link the
6
payment of welfare benefits to education, employment, and changes in behavior.
Child support enforcement is also being strengthened through a variety of changes.
Expansion of the Earned Income Tax Credit (EITC)
A large expansion of the Earned Income Tax Credit (EITC), included in a
comprehensive advanced as a child care initiative proposed by the President, was
signed into law in 1990. It increases the incentives to work for low-income family
heads, including those who leave welfare for a job. Because the credit is refundable,
individuals who pay no income tax still qualify for the benefit. The EITC provides a
work incentive by insuring that low-income workers with children receive payments
from the Federal government, even if they do not owe any tax on their earnings.
The 1990 changes in the EITC have two primary effects. The changes
substantially increasing the size of the maximum benefit, providing a greater return to
work for low-income families with children. More importantly, the changes further
lowered the tax rate on the first dollars in income, thus making it easier for individuals
to leave welfare and join the labor force.
Job Training 2000
The Job Training 2000 proposals, announced in 1991, would provide a new,
market-driven system for job-training programs that serve welfare recipients. The
7
President's Job Training 2000 initiative, currently proposed in the Fiscal Year 1993
Budget, seeks to reform vocational training. It restructures the current Federal job
training and vocational education system, which has more than 60 programs,
operating at a cost of about $18 billion per year. The Job Training 2000 proposal will
bring greater coordination and efficiency to these programs and will also foster more
private sector involvement in meeting the needs of a community.
To facilitate the transition from welfare to work, Job Training 2000 also calls for
demonstration projects linking the private sector with welfare-to-work programs.
These projects will allow states to use private and non-profit firms to provide basic
training and job placement for welfare recipients. These firms would function in a
similar manner to an employment agency, but would not receive payment for services
until the worker held a job for a specified period of time.
Other current welfare-related initiatives
The Administration's FY 1993 budget submission to the Congress proposed to:
Permit States to raise the AFDC assets limit from $1,000 to $10,000 for
families, thereby removing disincentives to savings for those already on the
welfare rolls;
8
Allow AFDC recipients to participate in a Plan for Achieving Self-Support
(PASS). At the State's option, income and resources related to achievement of
a recipient's approved plan to move from dependency to self-employment could
be excluded when calculating AFDC eligibility and the amount of AFDC
benefits.
Establish, through a demonstration, "escrow" savings accounts for long-term
AFDC recipients working their way off the welfare rolls. Such a demonstration
would test the effects of setting aside the amount by which a long-term AFDC
family's benefits are reduced once the family head takes a job, then paying it in
a lump-sum to the family if they succeed in working their way off the rolls.
The budget also contains proposals indirectly affecting the current AFDC
program. Those proposals would:
Create enterprise zones in our most troubled communities, looking to the
degree of welfare dependence as one indicator of which communities merit
such zones;
Widen opportunities for public housing tenants to change the management of
troubled projects;
9
Eradicate unsafe and unhealthy conditions for public housing residents.
Not directly affecting the welfare system, but affecting the integrity of benefits
and the administration of benefit programs are proposals for:
Continued implementation and testing of multiprogram Electronic Benefits
Transfer (EBT) pilot projects to demonstrate the application of technology to the
electronic delivery of Federal benefits to eligible recipients, reduce the incidence
of welfare fraud, and decrease long range administrative costs.
timesp
bersell
123 bin NV
Laboratories of Democracy: The States
her Y
While the Family Support Act has already proven very beneficial state interest
and and ml and
in further experimentation continues. States are showing a new interest in furthering a
basic principle of the Family Support Act by requiring responsible behavior as a
condition for receiving benefits. The reforms, which are at various stages of
development in the States, include:
Paying AFDC benefits for a specified time period at the level of the state in
which the recipient previously lived, to reduce incentives to migrate in search of
higher benefit levels;
10
Reducing AFDC payments to families headed by non-disabled adults, either
after an initial transitional period, or after refusal to participate in appropriate
work, training or education, or both;
Limiting AFDC payments based on the size of the family at application for
benefits;
Expanding AFDC eligibility to two-parent families; and
Requiring specific parental responsibilities, including receipt of preventive health
services, regular school attendance, and regular payment of rent, as a condition
for benefits.
Where We Are
In his State of the Union address, the President pledged the assistance of the
federal government in approving waivers required for state welfare reform efforts,
saying:
We are going to help this movement. Often, state reform requires waiving
≥
certain federal regulations. I will act to make that process easier and
quicker for every state that asks for help.
11
Flexibility comes in several forms. As an example to states, the Administration
is committed to eliminating unnecessary variation in the rules of the myriad of Federal
assistant programs through interagency cooperation and application of waiver authority
where applicable. First, the law governing some programs allows for program waivers
that are routinely granted to allow states to pursue cost-effective alternatives to
current practices. These waivers relax some limitation in law or regulation, and allow
a state to pursue a different course in a defined area. For example, states often
obtain "home and community-based waivers" in the Medicaid program to allow people
who can be treated at home at less expense than in a hospital or institution to be
treated at home.
Second, the Federal government can grant research waivers for demonstration
projects. The Social Security Act provides broad authority to waive rules governing a
broad array of programs whose governing legislation is found in that statute --
including AFDC, child support enforcement, and Medicaid. In contrast to waivers
granted to provide flexibility, research waivers change rules in order to test hypotheses
in the "laboratories of democracy." For example, hypotheses about the effects of
restricting payments for additional children and payments for children with regular
school attendance are currently being pursued in state demonstrations. To the extent
that the laws allow, demonstration projects can receive waivers from the relevant
agency when criteria of good evaluation design and cost neutrality are met. In the
12
past, these waivers have run for predetermined lengths of time, have met the criterion
of cost neutrality, and have required an evaluation at the end of the experiment.
Third, a state can obtain flexibility without a waiver by using a state plan
amendment. A state plan amendment represents a change in what services, benefits,
or payments a state chooses given the flexibility and options available under current
law. The largest welfare programs, AFDC and Medicaid, are operated under state
plans that describe how those programs are structured. Some innovations in structure
can thus be accomplished by approving a state plan amendment.
Finally, Congress can enact waivers. For Minnesota's welfare reform proposal,
the state obtained a statutory waiver of provisions of law that would conflict with the
state's approach.
To encourage state experimentation with different forms of welfare policy, the
Administration is committed to reviewing states' waiver proposals in a timely manner.
Senior officials from the relevant agencies are brought together soon after a waiver
request is submitted. That interagency group tracks proposals closely as they are
received to ensure speedy review by the appropriate agencies.
Since the State of the Union, four states -- Wisconsin, Oregon, Maryland, and
California -- have submitted AFDC research waiver proposals. Using the
13
coordinating process, Wisconsin's request was approved within 30 days of submission.
Its proposal included an expansion of the Learnfare program that requires all
teenagers on AFDC (dependent children and heads of families) who have not
graduated from high school or earned a high school equivalency diploma to attend
school on a regular basis. Wisconsin's Parental and Family Responsibility
Demonstration Project (PFR) provides new incentives for teenage welfare recipients to
work and marry. The program broadens AFDC eligibility for married teenagers; limits
additional payments for additional children; increases earnings that can be received
before welfare payments are reduced; and requires participation in education and
employment-related services. It was reviewed consistent with an agreement that the
review process begin with a meeting among White House, HHS, and Office of
Management and Budget officials to look at difficult issues as early as possible. The
Administration's strong belief in federalism means that, in some cases, it will approve
waivers even where it does not support certain aspects of the proposal.
The Administration's current waiver criteria are designed to reduce approval
obstacles. These criteria, presented as Appendix A, "Achieving a Balance Between
State Innovation, Research Standards and Budget Neutrality," reflect the following:
1.
The rigor of evaluation required should be proportional to the financial and
programmatic risk posed by a demonstration. A high standard of rigor is
14
required for a project that, if broadly implemented, could have significant effects
on family structure, work effort, or costs.
A rigorous evaluation can be costly. The cost of an evaluation is shared by a
single state and the Federal government, while the benefits of the knowledge
gained are available to all states. This problem is exacerbated for small states,
which are unlikely to have the expertise to prepare both a waiver proposal and
a rigorous evaluation plan. Hence, the Administration proposes to identify
additional sources of Federal domestic discretionary funds that could be
awarded to supplement the 50/50 match currently available for evaluation costs.
2.
Waivers must be budget neutral for the period of experimentation, with interim
comparisons of actual demonstration costs versus costs that would have
occurred in the absence of the demonstration.
3.
Waiver projects may include a significant proportion of program participants in a
state, provided that an appropriate evaluation approach is maintained.
The Administration's Goals for the Future: Policy Options
The Administration has made substantial strides in coordinating welfare
payments with work and education in order to encourage individuals to view welfare as
15
a stepping stone to a more productive life. More must be done, however, if welfare
reform is to improve individual, family, and community life.
Employment is the best way to reduce welfare dependence, and getting a job
-- even a low-skilled job -- provides work experience, encourages good habits, and
may lead to a better job in the future. Encouraging welfare recipients to finish high
school or to enroll in further vocational training or apprenticeship programs will help
bring about that outcome. Reform efforts must build on the Family Support Act,
strengthening work requirements and extending requirements for responsible behavior
to areas beyond their traditional ties to employment and child support enforcement.
In order to facilitate state-level innovation, the Administration will pursue steps
that can be accomplished within current law as well as propose legislation that will
allow for further progress.
Actions that can be accomplished under current law
1.
Work with states to encourage an interest in welfare reform, and the
development of waiver proposals that fit their needs.
2.
Encourage specific waiver proposals that we believe offer promise in advancing
the overall cause of welfare reform.
16
Current demonstration waiver authority within the Social Security Act and the
Food Stamp Act is not intended to permit States to make permanent changes to their
programs. However, successful demonstrations can lead to legislative changes to
give States the option of adopting the alternative practices proved to be effective. The
Family Support Act permits States to limit the benefits provided under their AFDC-UP
programs to as few as six months out of a year and to make benefit payments like a
paycheck, after satisfactory completion of assigned activities. These provisions
resulted from successful demonstrations by the State of Utah. The Administration
supported legislation to permit States to adopt Utah's approach on a permanent basis.
Similarly, the Administration would tend to support legislation to provide States with
options to adopt other practices proved effective in demonstrations.
Working with states to develop waivers that fit their needs
The President should immediately send a letter to all Governors informing them
of steps we are now taking to facilitate waivers. Through various means, states would
be provided with information on the waiver process and waivers that the
Administration seeks to encourage.
Administration representatives will consult with Governors as a follow-up to the
President's letter, and encourage grass roots interest that can shape state proposals.
17
Waivers affecting welfare programs will also become part of the Administration's
strategy fulfilling the National Education Goals and pursuing the objectives of the
America 2000 program.
Encouraging specific waiver proposals
The Administration will encourage states to request specific waivers involving
approaches to reform welfare that we particularly wish to test. Those approaches
include providing comprehensive services for teen parents, promoting parental
responsibility, and encouraging independence. For state programs involving any or all
of these approaches, a waiver will be reviewed in thirty days, subject to the States
including an appropriate evaluation plan and cost neutrality mechanism.
The Administration believes comprehensive programs for teen parents must be
pursued. Elements of comprehensive programs, not all of which require waivers,
include:
Requiring teen parents to attend school, as the Family Support Act requires and
Wisconsin has demonstrated;
Requiring teen parents to live with their parents, as has been discussed in
California;
18
Requiring teenagers to receive parental training, as has been proposed in the
recent Wisconsin waiver;
Providing necessary childcare and comprehensive services for children of teen
parents, as is done in several states, such as Minnesota;
Allowing bonuses to teen parents who attend school, and penalizing those who
do not attend, as is the case in Ohio; and
Cooperating with school systems to test model educational programs to
encourage at-risk teenagers to stay in school.
Such programs will help end the cycle of dependency that begins with teenagers
having children and not completing high school.
The Administration also encourages waiver proposals that promote parental
responsibility. States could require that absent fathers who receive Food Stamps or
general assistance from state-run programs participate in work or training. The
effects of allowing non-custodial parents of AFDC children to volunteer to participate
in JOBS are being tested and could be expanded.
19
Parents must be held accountable for their responsibility to their children. For
example, states could sanction recipients who do not ensure that their children:
Receive recommended immunizations;
Receive appropriate health screening and preventive health services; and
Attend school regularly, as required in Wisconsin and Ohio.
The Administration supports waiver requests for proposals encouraging
independence. In particular, states are encouraged to extend the current JOBS work
requirements for the AFDC population. Consistent with cost neutrality principles,
waivers could allow additional Federal funds for States that are currently at their cap
for JOBS funds.
Actions that require legislation
1.
Expanding waiver authority;
2.
Enacting specific waivers and program options that would expand the range of
reforms States could undertake on their own; and
20
3.
Removing obstacles to opportunity.
Additional Waiver Authority
Under Section 1115 of the Social Security Act, the Secretary of Health and
Human Services may waive compliance with AFDC, child support enforcement, and
Medicaid state plan requirements and provide matching funds for costs associated
with the waivers.
The Administration proposes to expand waiver authority for states. First, the
Administration has proposed to expand demonstration authority in Section 1115 of the
Social Security Act to include all Federal-State programs authorized in that statute.
The Administration also proposes to expand similar waiver authority to the Food
Stamp Act and the Housing Act of 1937. This would encourage cities and states to
undertake service integration projects, making use of several types of programs on a
demonstration basis.
While incremental additions to waiver authority are useful, the Administration
believes that the process of making federal programs work as part of an opportunity
society rather than a welfare society requires broader waiver authority. Last year the
Administration proposed the Community Opportunity Act as a means to break down
the walls between Federal programs and state and local institutions.
21
Former President Carter recently met with President Bush to discuss The
Atlanta Project, an effort to address many of the social problems that affect Atlanta.
Flexibility in the application of federal rules and requirements (rather than more
resources) tops Atlanta's list of how the federal government can be helpful. Were the
Community Opportunity Act to be enacted into law, the broad flexibility that Atlanta
seeks would be possible.
The Administration reaffirms its support for the Community Opportunity Act.
However, there are serious institutional impediments to favorable Congressional action
on legislation that cuts across several committees. The Administration will submit new
legislation, called the Limited Authority for Local Solutions Act (LALSA), that applies
the principles of the Community Opportunity Act on a more limited basis. Through the
LALSA initiative, innovative programs will be fostered at the local level. Sites will be
selected through a competitive process on a limited basis, by limiting the number of
sites in which community opportunity projects could operate or by limiting the number
of projects that could be approved in a specified time frame.
Expanding Options for Program Waivers
The Administration would seek expanded program waiver authority where
alternative practices have been shown to be effective, States would be provided with
waivers to continue or adopt them through waivers free of research requirements.
22
These options include:
strengthening work requirements for welfare recipients;
focusing JOBS programs on attachment to employment rather than classroom
training;
waiving Federal regulations that pose a barrier to employment; and
mandating regular school attendance in exchange for benefits;
allowing states to vary AFDC benefits by county to reflect regional disparities.
These options promote the principles of encouraging individual responsibility and
economic independence.
The Administration seeks to encourage waivers that attempt to move able-
bodied welfare recipients from welfare to work, either through incentives to work or
through disincentives to remain on welfare. This approach could include placing more
recipients in paid jobs or in unpaid work in public or non-profit agencies. Waivers
could allow additional Federal funds for states whose current JOBS spending is at the
state's JOBS cap.
23
Successful programs that emphasize job placement are the San Diego,
California, Saturation Work Incentive Model (SWIM) and the Riverside, California,
GAIN program. These programs provide an alternative to models that focus heavily
on classroom education rather than first encouraging job search activities. These
programs could be encouraged through a legislative proposal that would simplify their
implementation by any state.
The Family Support Act requires older teen parents to be in JOBS. Expanding
this requirement to younger parents is a possible option for state plans. New Jersey
and Illinois have required this in demonstration projects. Experiments of this type are
underway in Wisconsin. Ohio combines bonuses for regular school attendance with
penalties.
Removing Obstacles to Opportunity
Certain Federal limitations pose barriers to effective work programs. Their
repeal would help welfare recipients attain independence. First, current law prohibits
workfare assignments for AFDC recipients if these assignments supplant work of
regular public employees. The Administration supports repeal, of this provision
because it means that States cannot fund workfare programs through economies in
spending for the same kinds of work. Second, the Administration proposes to allow
states to calculate workfare hours based on the combined value of AFDC, food
24
stamps, and Medicaid that the family is receiving, up to 40 hours. (need clarifying
sentence) Third, the Administration proposes to allow states to pay AFDC to single-
parent families in similar form to a paycheck, based on satisfactory attendance and
performance in a JOBS activity. Finally, the Administration believes that current
limitations on duration of job search should be removed.
The Davis-Bacon-regulations and the Fair Labor Standards Act are programs
that keep wage levels artificially high for certain occupations. Building on agreements
that allow Davis-Bacon to be waived for self-help programs, the Administration
proposes that the Fair Labor Standards Act also be waivable.
result
Summary
It is time to reform our welfare system and break the cycle of dependency that
for too long has poorly served our neediest citizens. Instead of creating dependency,
we must promote personal responsibility and economic independence for all
Americans. We must ensure that our welfare system encourages family responsibility.
And we must create economic opportunities for welfare recipients by providing them
with job training and education. Through flexibility and innovation at the State level,
welfare program such provide all Americans with the opportunity for productive and
meaningful lives. The talents and abilities of all individuals are too precious to waste
as we meet the challenges of the next century.
Appendix A: Achieving a Balance Between State Innovation, Research Standards,
and Budget Neutrality
Summary statement of the issue
The Administration currently has the high ground in State welfare reform
demonstrations. It is providing States with broad flexibility, but in a responsible way.
States are required to do rigorous evaluations and keep their demonstrations cost
neutral to the Federal government. Even Senator Moynihan, who opposed some of
the policies in Wisconsin's welfare reform demonstration, affirmed that the waivers
were worthwhile because a rigorous evaluation would be performed.
One State, Wisconsin, has received waivers consistent with these high
standards. A number of other states have submitted waiver applications or are in the
process of doing so. These States will show that the Administration is living up to the
President's promises to make it quicker and easier to get waivers.
On the other hand, if rigorous evaluation and cost-neutrality were not required,
there is no doubt that more States would apply for waivers. The number of States
that will apply for waivers only if rigorous evaluation and cost-neutrality are not
required is unknown. So far, only New Jersey has been very resistant to these
standards, probably because the State's demonstration is almost sure to involve
higher spending and probably will increase the welfare rolls.
The question is whether the benefit from giving waivers to more States
outweighs the cost of abandoning the high standards for welfare waivers set out in the
President's 1993 Budget and applied to all States so far.
Background
Current broad waiver authority in Sec. 1115 of the Social Security Act and
Sec. 17(b) of the Food Stamp Act is research and demonstration authority. It is not
intended to let the Executive Branch permit States to make permanent changes in
their programs that do not comply with statute. (In fact, the demonstration waiver
authority in the Food Stamp Act prohibits this explicitly.) Evaluation of demonstration
waivers is not mentioned in either statue, but is assumed. cost-neutrality for the
Federal government is not required.
HHS has approved many waivers where only minimal evaluation was planned.
These have tended to be demonstrations where a State wanted to try a relatively
minor change in only a few sites, rather than Statewide.
Beginning with evaluations of mandatory job search and workfare in the early
1980s, a higher standard of evaluation has been applied to demonstration waivers.
High standards generally benefitted the Administration. Policies such as work
requirements that the Reagan Administration supported were found by rigorous
27
evaluations to work, while program liberalizations the Administration opposed did not
prove to be effective.
Like the current effort, the 1987 White House Low Income Opportunity Board
(LIOB) also sought to encourage State welfare reform demonstrations, and about a
dozen significant demonstrations were approved. Despite a desire to make it as easy
as possible for States to get waivers, the LIOB adopted rigorous evaluation and
Federal cost-neutrality as its principle. Rather than viewing the principles as
constraints on State flexibility, the Administration viewed evaluation and cost-neutrality
as the guarantees that made broad flexibility possible.
Although advocates of welfare reform always expect savings, the more common
outcome is higher costs. For example, Washington's Governor promised the State
legislature that his Family Independence Program demonstration would be cost-
neutral by the second year, and save money after that. In fact, as Federal analysts
predicted, the demonstration had cost overruns beyond $100 million in the first two
years.
The LIOB could have argued about future costs and savings with States that
wanted waivers, and turned down requests when it looked like they would cost money.
That was essentially the policy the individual agencies followed before the LIOB.
Instead, the LIOB decided to go ahead and approve waivers the States wanted, even
28
if they were likely to involve additional costs, as long as the Federal government was
protected from overruns.
Similarly, a high standard for evaluation permitted the LIOB to approve
demonstrations of policies to which the Administration was opposed. Without rigorous
evaluation results that command credibility, States could be expected to make
exaggerated claims about the effectiveness of their demonstrations -- Massachusetts'
liberal Education and Testing Program is a prime example. Rigorous evaluation made
it possible to permit States to test virtually any legal policy with minimal risk of future
unfounded claims of success.
In short, a strong desire for real federalism, allowing States maximum policy
flexibility, led to adoption of high standards of evaluation and cost-neutrality. The
same standards were set out in the States as Laboratories section of the President's
1993 budget. It would not contradict statutory authority to adopt much weaker cost
and evaluation standards. No doubt that would increase the number of States that
would be interested in obtaining waivers. Whether it would increase the credit the
Administration received for inspiring welfare reform is another question.
Currently, Wisconsin has received waivers for a demonstration with rigorous
evaluation and cost-neutrality. Terms to provide Oregon with waivers for an AFDC
29
demonstration that involves rigorous evaluation and cost-neutrality have been drafted.
The State will probably will have its waivers in the next week or two. The State of
California is expected to submit its waiver application very soon. The State will
perform a rigorous evaluation and keep the demonstration cost-neutral to the Federal
government.
So far, only New Jersey has been very resistant to the standards of rigorous
evaluation and cost-neutrality, probably because the demonstration clearly will
increase costs and probably will not be shown to be effective in getting families off
welfare.
The Administration currently has the high ground on welfare reform. It is giving
States wide latitude to experiment, even with controversial policies, but in a
responsible way. A rigorous evaluation is required, so that when the demonstration is
over, we are sure we know whether it made any difference. And, because welfare
reforms, that intend to save money often end up costing money, cost-neutrality is
required.
If the Administration backs away from the principles in the 1993 Budget, and
approved waivers without rigorous evaluation and cost neutrality, it will approve more
waivers. Whether the incremental increase over the number it would approve without
abandoning these principles will have a positive impact on the public's perception
30
about the President's support for welfare reform is not clear. On the cost side, the
Administration could expect partisan charges of misusing research authority for
political ends and abandoning its stated principles.
PAGE
12
1ST STORY of Level 1 printed in FULL format.
Copyright 1992 Globe Newspaper Company
The Boston Globe
May 21, 1992, Thursday, City Edition
SECTION: NATIONAL/FOREIGN; Pg. 1
LENGTH: 1126 words
HEADLINE: Swipe at 'Murphy' snarls White House
BYLINE: By Michael Kranish, Globe Staff;
Walter V. Robinson of the Globe staff contributed to this story from California.
Material from the Associated Press was included.
DATELINE: WASHINGTON
KEYWORD: GEORGE BUSH TELEVISION UNUSUAL NAME-MURPHY BROWN
BODY:
President Bush, stunned by the intense reaction to Vice President Dan
Quayle's criticism of a television character who had a child out of wedlock,
tried yesterday to distance himself from the controversy but wound up in the
fray anyway, unable to say definitively whether it was better to have an
abortion or a fatherless child.
Bush's comments were the latest in a series of missteps that might have
seemed to mirror the antics on CBS's popular "Murphy Brown."
Quayle initiated the events on Tuesday when, in a speech in California, he
said the fictional Brown, played by Candice Bergen, was "mocking the importance
of fathers by bearing a child alone and calling it just another lifestyle
choice."
In the show's season finale Monday, Brown - a single, independent-minded,
forty-something television reporter - gave birth to a baby boy after choosing to
go ahead with a pregnancy. An estimated 38 million Americans watched the show.
But Quayle, in his comments on Tuesday, did not mention that Brown had had
the baby only after deciding against an abortion. Quayle's critical comments
prompted a sharp response by the show's producer, who noted that Quayle should
ensure that abortions are legal if he does not want fatherless children. The
Bush administration opposes abortion except in the case of rape or if the health
of the mother is endangered.
White House advisers, sensing that the abortion issue was about to backfire
in a way they had never intended, set to work to minimize the effect of Quayle's
comment.
Yesterday, Bush's spokesman, Marlin Fitzwater, a fan of the show, told
reporters that the White House applauded the fictional character's decision not
to have an abortion. "The fact is she is demonstrating prolife values which we
think are good,' Fitzwater said. He added, "We're not very comfortable getting
involved in criticizing her show."
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PAGE 13
The Boston Globe, May 21, 1992
That upset Quayle's staff, which considered it a slap at the vice president
just as Quayle was putting himself on a limb to appeal to the Republican Party's
conservative base. Quayle's staff also provided a clue about why the vice
president had targeted the popular comedy in the first place: The show's
characters frequently tell Quayle jokes.
Quayle, told in Los Angeles that Fitzwater had said the show was prolife,
said: "That is not correct. The Murphy Brown show does not represent prolife
policies."
Quayle declined to say whether Brown should have had an abortion, saying:
"Hey, this is a sitcom. My complaint is that Hollywood thinks it's cute to
glamorize illegitimacy. Hollywood doesn't get it."
Finally, amid this confusion, Bush himself wandered into the ideological
minefield yesterday afternoon.
At a sun-splashed press conference on the back steps of the White House with
Canada's prime minister, Brian Mulroney, Bush was clearly itching to address the
issue with a carefully worded response that his aides had spent the morning
putting together.
"OK, everybody, give me a Murphy Brown question," Bush said, holding up a
prepared statement. "I've got one answer right here for you."
Bush then tried to sidestep the issue by saying he wanted children to have
both a mother and father, even though he said he knew that was "not always
possible.' He insisted he would say nothing more on the subject.
"I believe that children should have the benefit of being born into families
with a mother and a father who will give them love and attention all their
lives," Bush said. "That is the best environment in which to raise kids. Not
always possible, but that's the best environment."
Bush continued: "That's really the kind of guidance I would place on that.
I'm not going to get into the details of a very popular television show."
That was hardly a ringing endorsement of Quayle's statement, and Bush never
did say whether he agreed with his vice president.
Then, asked whether it was a mistake for Murphy Brown to portray an unwed
mother on the show, as Quayle had maintained, Bush angrily said he was not going
to respond.
"I told you you must have missed what I said," Bush said. "I said I've
just taken the last Murphy Brown question and tried to put it in a serious
context that I hope the American people can understand. That's it."
But Bush nonetheless went on to back away further from Quayle's comment.
While saying that the country would be better off with two-parent households, he
suddenly sounded sympathetic to Brown's fictional situation.
"It's not always easy, not always possible," Bush acknowledged, referring to
two-parent families.
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PAGE 14
The Boston Globe, May 21, 1992
Still, a reporter pointed out that Bush had not addressed the question of
whether it was better for Brown to have an abortion or to have a fatherless
child.
"Well, as you know, I don't favor abortion," Bush said. "And I think that
opting for life is a better path."
So does that mean he favors Brown's decision to have the child out of
wedlock? In the end, Bush refused to say what he would advise a woman who had to
choose between having an abortion or a fatherless child.
"I don't know that much about the show," Bush said. "I've told you I don't
know any more questions about it
I just can't go into details."
Bush's advisers seemed split over how the controversy would play out. Quayle
made the comment as part of a law-and-order speech in California tailored to
Bush's conservative base. But with Bush counting on getting a large female vote
to win reelection, some advisers were concerned that Quayle's comment came off
as a hypocritical tirade that showed little sympathy for a woman who was trying
to follow the administration's policy against abortion.
In California, where Quayle touched off the firestorm with his speech on
Tuesday, Republicans strategists searching for the motive behind Quayle's
remarks said his rivalry with Housing Secretary Jack Kemp, a likely competitor
for the White House in 1996, almost certainly explains the conservative oratory.
These sources said they believe Quayle has resented the recent spotlight on
Kemp and his urban agenda and has been seeking an opportunity to to remind
conservatives of his own credentials.
"What was Quayle thinking?" one Bush aide lamented back in Washington. "This
isn't even a real person. He is attacking a fictional character in a television
show that millions of people love."
Even though Bush had been forewarned that reporters would question him about
Quayle's comment, Bush seemed exasperated that Murphy Brown was the issue of the
day. Bush turned to Mulroney, who had dodged all questions, in French and
English, about the show.
"See, I told you," Bush said, apparently alluding to a warning that there
would be questions about Quayle's comment. "You thought I was kidding."
GRAPHIC: PHOTO, 1. Vice President Dan Quayle, the "Murphy Brown" critic, talks
to students yesterday. REUTERS PHOTO 2. Actress Candice Bergen, in her title role
on "Murphy Brown," cradles the newborn baby for the TV program's season finale
Monday. CBS-TV PHOTO VIA AP
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Mary or diff
Table 3
State Balanced Budgets and Deficit Limitations:
X-6697
Constitutions and Statutory Provisions
Governor
Governor
Must
May Carry
Legislature
May Not
Must
May Net
Constitutional
Over Deficit
Submit a
Must Pass
Carry Over
Sign a
Carry Over
Limit on
For One
Balanced
Deficit
a Balanced
Deficit
Balanced
General
Year
into Next
Budget
into Next
State
Budget
Budget
Obligation
Maximum
Biennium
Fiscal Year
Debt'
Alabama
CS
YR
YR
NP
NP
YR
Alaska2
YR
Arizona
S
s
S
NP
NP
YR
Arkansas
S
NP
NP
$350.000
NP
YR
YR
California
YR
NP
NP
YR
YRS
NP
YR'
300,000
Colorado
$
C
C
C
C
C
Connecticut
YR
YR
YR
YR
NP
NP
NP
Delaware
C
NP
C
C
NP
YR
YR
Florida
$
C
NP
NP
NP
NP
YR
NP
Georgia
YR
YR
YR
NP
NP
NP
4
Hawaii
NP
C,S
NP
NP
NP
$
Idaho
C
C
NP
NP
NP
YR
Illinois
C
C
2,000.000
NP
NP
NP
NP
Indiana
C
C
NP
C
NP
YR
C
YR
Iowa
C
NP
O
NP
NP
NP
250,000
Kensas
$
S
NP
NP
YR
Kentucky
C
YR
c
C
1,000,000
NP
YR
Louisiana
YR
YR
YR
YR
500,000
NP
NP
Maine
YR
NP
NP
.
NP
NP
NP
Maryland
NP
C
C
NP
2,000,000
YR'
YR'
YR'
NP
Massachusettes
NP
NP
NP
NP
Michigan
c
NP
C
C
NP
NP
YR
Minnesota
YR
CS
CS
0
S
CS
NP
Mississippi
S
NP
NP
NP
NP
NP
Missouri
NP
8
C
C
C
NP
NP
YR
0
Montana
C
C
NP
Nebraska
YR
c
YR
C
C
NP
NP
NP
Nevada
S
NP
C
NP
100,000
NP
NP
New Hampshire
S
NP
NP
YR
AV
NP
YR
YR
New Jersey
C
C
NP
C
NP
YR
YR
9
New Mexico
NP
NP
YR
NP
NP
New York
C
YR
NP
AV
c
C
North Carolina
NP
C
NP
c
V
C
NP
YR
North Dakota
YR
YR
YR
YR
YR
NP
YR
NP
Ohio
YR
YR
NP
YR
NP
YR
YR
10
Oklahoma
$
NP
NP
NP
YR
Oregon
YR
CS
V
NP
NP
Pennsylvania
NP
c
c
50,000
S
c
Rhode Island
NP
NP
C.S
YR
NP
NP
South Carolina
YR
c
V
c
c
NP
YR
YR
"
South Dakota
c
c
c
NP
Tennessee
NP
C
YR
C
c
100.000
NP
Texas
NP
C
YR
c
NP
C
NP
Utah
NP
NP
$
C
NP
200,000
NP
Vermont
YR
NP
YR
NP
AV
NP
NP
NP
NP
NP
Virginia
$
NP
NP
NP
S
Washington
$
$
NP
V.T
NP
NP
YR
NP
West Virginia2
T
Wisconsin
NP
NP
NP
NP
NP
NP
Wyoming
YR
YR
AV
YR
NP
YR
YR
AV
There are 34 skates corrently, which have some provision
Calling for a batanced State budget
6 Advisory Commission on Intergovernmental Relations
Table s (cont)
State Balanced Budgets and Deficit Limitations:
Constitutional and Statutory Provisions
Key
AV-Percentage of property value
NP-No provision
T-Percentage of taxes
YR-Yes/restriction applies
C-Constitutional provision
S-Statutory provision
V-Popular vote required for any debt
1 Different provisions may apply to other long- and short-term debts.
2 Information not available.
3 May carry over only with legislative concurrence.
4 Not more than 10% of prior year's net general revenues.
5 Not to exceed 20% of average of General Fund revenues for 3 fiscal years preceding; may not be exceeded by popular vote.
6 Limited to 10% of 3-year average of Bond Security and Redemption Fund.
7 General Fund must have positive balance at end of fiscal year of proposed budget.
6 5% of General Fund.
9 5% of General Fund.
10 Highway, $500 million; coal, $100 million.
11 Limited to 5% of last completed fiscal year revenue for capital improvement bonds.
Source: National Association of State Budget Officers. Budgetary Processes in the States, 1987.
Advisory Commission on Intergovernmental Relations 7
"California's Organization of Tax Fighters"
Taxing Times
The Official Newsletter of the Howard Jarvis Taxpayers Association
Howard Jarvis, Founder
Winter 1991
HIGH COURT TO HEAR PROP. 13
JUSTICES TO DECIDE "LIFE" OR
"DEATH" FOR TAX CUTTING MEASURE
On Monday, October 7, the U.S.
of her neighbors, who have owned
Supreme Court announced it would
their homes for a longer period of time.
rule on the constitutionality of
Nordlinger's attorney, Carlyle Hall,
Proposition 13. The decision of the
calls it an "outrageous" equal protec-
court in the Nordlinger vs. Hahn (Los
tion violation.
Angeles County) case could have far
At an afternoon press conference
reaching effects on every homeowner
called to discuss the Supreme Court's
in the state.
acceptance of the Nordlinger case, Joel
Hearings are expected to: take
Fox told reporters that HJTA was
place early next year and a decision
ready for the challenge.
to be rendered by July.
"We will prove once and for all
"It's the ultimate test for Proposi-
time that Proposition 13 is constitu-
tion 13," said HJTA president Joel
tional. We will show the court that
Fox. "There's no appeal from the
Proposition 13 is sound policy
U.S. Supreme Court, so this is life or
benefiting all California property own-
erst-By-basing property
This challenge to Proposition 13
ability to pay at the time of voluntary
comes from Los Angeles attorney
purchase, and guaranteeing certainty
Stephanie Nordlinger. Nordlinger
as to what taxes will be in the future,
HJTA president Joel Fox is joined at Prop. 13 news conference In the State Capitol by
maintains that her constitutional right
Proposition 13 protects taxpayers from
(L to R) HJTF president John Suttie, Assemblyman Jim Brulte; Assemblyman Chris
losing their homes to the tax collec-
Chandler and Professor Clark Kelso.
to equal protection is being violated
because the taxes on her recently
tor. These benefits are available
purchased home are higher than those
See COURT, Page 6
RULING COULD BE RETROACTIVE
California taxpayers could be hit
California taxpayers liable for
with $28 billion in back property taxes
additional property taxes going back
MAD TAX UPDATE
if the U.S. Supreme Court rules
the last four years."
Proposition 13 unconstitutional.
According to Kelso, "The court
In the fall issue, "Taxing Times"
install custom street lights, does not
At a Sacramento news conference,
has been wrestling with the
reported on HJTA's suit to overturn
give authority to school districts to
Professor Clark Kelso of the
retroactivity issue for the last two
McGeorge School of Law discussed
terms and appears to be badly frac-
illegal maintenance assessment
impose fees.
districts (MADs) for school facilities
Responding to this violation of
the possibility that an adverse ruling
tured."
in Orange County.
Proposition 13 - which requires a
on Proposition 13 could be made
Kelso said Justices Stevens,
Last summer, a number of school
two-thirds vote of the people to
retroactive. Professor Kelso was
Blackmun and Scalia have said all
districts throughout the state, includ-
approve special taxes - HJTA filed
joined by HJTA president Joel Fox,
cases should be applied retroactively,
ing most of the districts in Orange
suit against Orange Unified School
HJTF president John Suttie and
while Justice Souter has expressed
County, listened to a consultant's
District. Orange was the first district
Assemblymembers Chris Chandler
some agreement. Justices Rehnquist,
recommendations and attempted to
to approve a MAD.
and Jim Brulte.
White, Connor and Kennedy have
impose assessments on local property
Before a month was out, every
"If the court rules that Prop. 13 is,
said some decisions should not be
owners under the little known 1972
school district in Orange County that
in fact, unconstitutional, there is a
applied retroactively. The views of
Landscaping and Lighting Act. The
had passed or was considering a MAD
significant risk the court will apply its
Justice Thomas on this issue are
1972 Act, which was intended to allow
responded to HJTA's legal challenge
decision retroactively," said Kelso.
currently unknown.
a Manhattan Beach neighborhood to
See MAD, Page 9
"The result may well be to make
See RETROACTIVE, Page 8
Howard Jarvis Taxpayers Association
Nonprofit
621 S. Westmoreland Avenue Dept. 2527
Organization
Los Angeles, CA 90005-3971
U.S. POSTAGE
Taxing Times
PROP. 13
PAID
Howard Jarvis
Taxpayers
Published quarterly by the Howard Jarvis Taxpayers
LEGAL EXPERT
Association
Association (HJTA) and the American Tax Reduction
Movement (ATRM). Kris Vosburgh, Editor.
JOINS
Members of HJTA and ATRM enjoy dual membership.
HJTA
HEADQUARTERS
621 S. Westmoreland Ave., Suite 202
See Page 2
Los Angeles, CA 90005-3971
Photo Copy Preservation
PAGE 2
TAXING TIMES
This column appeared in the October 13, Los Angeles Times
PRESIDENT'S MESSAGE
STATE'S TAX REVOLT IS FAR FROM OVER
Remember Ben Franklin
by Joel Fox
The ultimate challenge to Proposi-
The United States Supreme Court
Rehnquist included a footnote,
tion 13 now faces us. The United
has decided, to hear a unique death-
however, that raised the question that
States Supreme Court will determine if
penalty case - the court will decide
the West Virginia decision may not
the life or death of Proposition 13.
apply to Proposition 13, a law enacted
Proposition 13 is constitutional. We
are doing everything possible to de-
Good! Let's get on with it,
by the people of California to protect
against taxation based on inflationary
fend Proposition 13. As we have done
and prove that Proposition 13 is
in all the Proposition 13 court chal-
constitutional.
housing prices.
Historically, for the court, equity
lenges, our attorneys will file briefs
The court will test Proposition 13
with the Court and assist in the defense
on legal principles. However, the
has meant equal treatment of equals.
court's decision will not be assessed
We believe Proposition 13 affords that
put up by the defendant, Los Angeles
County Assessor Kenneth Hahn.
by the national media as a technical
protection by requiring everyone to
interpretation of the law, but as a
pay 1% of the value of the property at
We think the arguments are on our
side and we will win. But there is no
verdict on the tax revolt itself. Both
the time of voluntary purchase.
When the case comes before the
appeal from a decision by the Supreme
the national media and many
Court, and we must be ready if the
opponents of Proposition 13 care little
court we will argue that there is a
Court rules against Proposition 13.
invalid, the Legislature will propose its
if Californians are forced to pay more
reasonable policy established by
When Ben Franklin said we must
own alternatives, as will special interest
in property taxes. They care if the
Proposition 13. The court looks for
hang together or hang separately, he
organizations that favor higher taxes.
symbol for the tax revolt is torn down.
reasonable policies behind state tax
The legal test will be measured
laws. Not only did Proposition 13 save
could just as easily have been talking
If a Proposition 13 replacement
to California taxpayers. In November,
becomes necessary, it will take mil-
against the ambiguous standard of
property from loss to confiscatory
taxation, it gave owners certainty in
the Howard Jarvis Taxpayers Associa-
lions of dollars to run a successful
equity of taxation.
tion hosted a meeting of leaders of
campaign for a measure to protect the
Proposition 13 freezes assess-
future property taxes.
ments at market value at the time of
We will remind the court of one
many of the taxpayer groups in
taxpayers. We may also, at the same
the state. Our goal was to discuss
time, have to oppose propositions
purchase and allows an increase
of Adam Smith's maxims in his
ideas and alternatives so that, if the
which will raise taxes.
for inflation of no more than 2% a
seminal work on taxation, "Wealth of
Nations": The certainty of what each
court requires a change to Proposition
So, as we prepare our defense
year and a change to full market.
13, we can move forward on a united
of Proposition 13, we are also looking
value when the property transfers
individual ought to pay in taxation is
front.
toward the future. I guarantee we will
ownership.
a matter of so great importance that a
We must work together because, if
be ready to protect the taxpayers no
In an unanimous court decision
very considerable degree of inequality
the court rules that Proposition 13 is
matter what the Court does.
written by Chief Justice William
is not near so great an evil as a small
Rehnquist nearly three years ago, the
degree of uncertainty.
Court ruled in a West Virginia case
We will remind the court that
that taxing similar property based on
Justice Frank Richardson of the
See Page 4 for
the value at time of purchase was
California Supreme Court declared,
Sacramento Report
a violation of equal protection of
in ruling Proposition.13 constitutional:
the law.
See REVOLT, Page 6
QUOTES WORTH NOTE
unlimited access to the public's money
"Prior to Prop. 13's passage,
the house next door sold for big bucks
by reinstating their control of property
homeowners never knew from year to
it meant your home would probably
"Those on the government payroll
taxes. Proposition 13 tied their hands
year how much they' d have to pay in
be reassessed next year."
who speak of inequities and unfairness
and they have been crying ever since."
property taxes. You trembled with
Columnist Raymond Brown
don't really care about inequities and
Jim Berry, columnist for West
fear when you opened your annual
in the San Francisco
fairness, what they really want is
Coast Community Newspapers
property tax bill. You hated it when
Examiner-Chronicle
Prop. 13 Legal Expert
Joins HJTA Staff
Washington Report
ATRM Fights Gas Tax
Tax and term limitation expert
Jonathan Coupal has been named
If all that went on in Washington
the nests of various Senators and
Director of Legal Affairs for the
was midnight pay raises for Senators
Representatives with a highly dispro-
Howard Jarvis Taxpayers Association.
accompanied by the sound of House
portionate number of these projects
Fresh from victory in defending
members bouncing checks, we might
going to the states of the chairmen of
Proposition 140 (term limits) before
call ourselves lucky.
the committees with jurisdiction."
the California Supreme Court, Coupal
While California taxpayers'
Added Crane, "Frankly, I find this
comes to HJTA from the Pacific Legal
attention has been riveted on new state
whole process revolting."
Foundation where he held the Howard
taxes and threats to Proposition 13,
The American Tax Reduction
Jarvis Chair of Citizen Taxpayer Law
there has been a move in Congress to
Movement (ATRM) lobbied strongly
- a position endowed by HJTA.
wring another nickel a gallon out of the
in opposition, contacting all 535 mem-
Coupal will be devoting his full
motoring public.
bers of Congress. On September 1,
attention to the defense of Proposition
H.R. 2950, the Intermodal Surface
Speaker Thomas Foley and Congress-
13 before the U.S. Supreme Court.
Jonathan Coupal, HJTA Director of
Transportation Infrastructure Act of
man Dan Rostenkowski, Chairman of
Coupal has successfully briefed and
Legal Affairs.
1991, would have added another 5
the Joint Committee on Taxation,
argued on behalf of Proposition 13,
energies on behalf of taxpayers."
cents to the cost of a gallon of gasoline.
jointly announced that efforts to pass
Proposition 62 and the Gann spending
Coupal is a graduate of the
This on top of the 5 cent increase
the gas tax would be abandoned.
limit in numerous cases.
Marshall-Wythe School of Law, at the
Congress approved last year.
Only for now, we suspect.
"Jon has one of the finest legal
College of William and Mary
As Congressman Phil Crane
minds in the state," commented HJTA
in Virginia.
(R-III.) told ATRM, "The bill contains
Members of HJTA and ATRM
president, Joel Fox. "We are fortunate
See Jon's report under "Legal
nearly 460 "special" projects to feather
enjoy duel membership.
that he can now devote his full
Front," page 6.
Photo Copy Preservation
PAGE 4
TAXING TIMES
TAXING
MAD.
Sacramento Report
AB 1505 was a bill that, like a stealth aircraft, moved quietly though the
legislative process with little attention or opposition.
We learned of the existence of the bill in the late afternoon of Aug
1991 LEGISLATIVE WRAP UP
30th, the day before the end of the 1991 legislative session.
by Steve Carlson
Once we analyzed the measure we knew we must vigorously oppose
HJTA Legislative Advocate
even though it would be extremely difficult to stop a bill at this late stage (
the legislative process and such opposition is often viewed as a breach C
Taxpayers bashed by budget, but HJTA holds
"legislative protocol" (assuming that is not an oxymoron).
On the morning of Aug. 31st, the Assembly was only a few agenda items
the line on Proposition 13 and the initiative
away from taking up the matter of concurrence in Senate Amendments, AB
process
1505's last legislative stop before the Governor's desk. I dashed off a two-
The 1991 legislative session was one of the most turbulent and
line letter opposing the bill and FAXed it over to Assemblyman Mountjoy's
difficult in recent memory due in large part to the budget crisis and the
office at the Capitol. Nancy, Mountjoy's top legislative aid, grabbed it and
ran it down to the Assembly floor moments before final consideration of AB
beginnings of the push and shove of reapportionment that will continue into
1505.
1992. Recent announcements indicate that despite the new tax increases, a
As the front page story in the Sacramento Bee recounted, when AB 1505
deficit of between $2 and $3 billion is projected for the next fiscal year.
Economists say that much of the shortfall is due to the loss of jobs in
was debated and Assemblyman Mountjoy rose to inform Assemblymembers
that he had just received a FAXed opposition letter from the Howard Jarvis
California, and many believe that tax increases contribute to the loss of jobs
and reduction of tax revenue.
Taxpayers Association, "the red lights began to blink," which is legislative
For the Howard Jarvis Taxpayers Association, however, the major non-
parlance for negative votes. The mere mention of HJTA's opposition to
budget issues in the legislature were focused in two major areas, assaults on
the bill garnered 31 NO votes, when the bill had previously received only
6 negative votes in its first trip though the Assembly.
Proposition 13 and attacks on the initiative process. Happily, HJTA's legis-
After the measure passed the Assembly, we embarked on an intense and
lative record on these most important issues was highly successful.
ultimately successful effort to secure the Governor's veto. We were joined
Assaults on Proposition 13
by groups such as Cal-Tax, the Farm Bureau, friendly legislators and private
citizens.
Action on the three bills about which we have the greatest concern, ACA
4, ACA 6 and SCA 8, each of which would make it easier to raise property
This story illustrates the complexity of the legislative process, but more
By specia
taxes, has been put over until next year. Of the other bills that attempted in
importantly demonstrates that the Howard Jarvis Taxpayers Association has
America's le:
various ways to circumvent Proposition 13, only a few survived the legisla-
the respect and attention of the Governor and a significant portion of the
tive process and arrived at the Governor's desk. We are glad to report the
Legislature. The credit for this belongs to the HJTA membership. Your
one of the r
Governor vetoed all of them.
petitions, postcards, personal letters and calls are a constant reminder
ever made.
One of the most dangerous to taxpayers, AB 1505 by Assemblyman Sam
to lawmakers that their votes are being watched by tens of
and groups
Farr (D Carmel), would have made the creation and implementation of
thousands of very concerned citizens. Keep up the good work!
It Is
county service areas (CSAs) much easier. CSAs are a form of benefit
The Governor vetoes
Jin
assessment district. Counties use these districts to assess property owners
for the "benefit" of various services such as police, fire and others. HJTA
two more direct attacks
views these CSAs as schemes to impose property tax increases without the
on Proposition 13:
YOU WRITE
Bless
Pe
requisite Proposition 13 vote of the people.
anoSB 164(Mello) opposed
LAWMAKERS
While backers of AB 1505 called it "user friendly," in fact, the bill
and ultimately obtained a veto of
In
would have radically increased the percentage of homeowners required to
this bill which imposed an "excise"
ANYTIME
submit written protests in order to prevent the creation of a new CSA. This
tax of $35 per parcel for open space
write your state
would have made a successful challenge a virtual impossibility.
areas in Monterey and Santa Clara
Ta
senator assembly representative
Our efforts to derail AB 1505 tell an interesting story about the legisla-
counties. We advised the Governor
P
or the Governor the State
tive process and how HJTA is viewed in Sacramento.
See SACRAMENTO
Capitol Sacramento CA 95814.
In each two-year legislative session nearly 8,000 bills are introduced and
REPORT, Page 11
W
ILo
This column appeared in the June 3, Sacramento Bee
Let Taxpayers Beware of the 'Fair-Share' Ruse
Robin Hood is back. On the silver
his no-new-taxes pledge last year.
So, we deal with perception. One
getting more money for government.
screen, on the television tube, and in
The question is: Exactly what
argument put forth by the tax fairness
Will an income tax increase on
the political arena - and in this year's
constitutes a fair share of taxes?
side is that the wealthiest residents
the wealthy end the hollering for more
state budget debate. "Take from the
Statistics do not provide an
must pay a larger proportionate
tax dollars? Temporarily, at best.
rich and give to the poor" is the
answer. They are often contrary and
Su
share of their income since they have
When the income tax was created by
strategy of many Democratic
confusing. For example, Citizens for
profited from the benefits of the
14
the 16th amendment to the United
politicians, the education establish-
Tax Justice, a group which favors
California work environment and
sta
States Constitution, the promise was
ment and public employee unions.
higher income taxes on the rich, claims
they must re-pay for their success.
off
that only the rich would pay the toll.
Governor Pete Wilson's budget
that the lowest family income group
Ignored is the fact that California has
Over 98% of American families were
plan does not include income tax
pays 14.1% of their incomes in state
benefited from the efforts and creativ-
No
exempted from its levies. Yet, we
increases. Wilson insists that raising
taxes, while the richest pays 10.6%.
ity of these people, who have brought
be
know that the income tax now catches
the income tax on- the wealthy will
However, other studies reveal this
jobs and produced more taxable
most Americans in its net.
dry up investment-capital-and.thus
state already has the most progressive
revenue for the state.
to
drive jobs from the state.
The fair share strategy is the
income tax, in the country. The top
If the fair share concept is clouded
as
advance guard for more tax increases.
Those who want more govern-
10% of California income tax payers
with emotion, is there any simple way
This is not Robin Hood redux.
ment spending feel the wealthy can
pay 75% of the income tax revenue
to measure fair and equitable tax
Robin's victims were often the
best afford to pay for it. However,
gathered in by the state. On top of
shares?
government - Prince John, the
instead of making the unpalatable
that, these richest of Californians
Probably the fairest income tax is
st
sheriff of Nottingham and his
argument that the rich have the money
undoubtedly pay more sales tax dollars
a flat tax, with everyone paying
tax-collecting henchmen, who became
a)
so we'll take it from them, they
for they buy more goods, and,
the same percentage of income.
la
rich by overtaxing the peasants.
complain that the rich are not paying
usually, at higher prices.
Under such a scheme, those who made
is
their fair share of taxes.
Robin Hood was taking the tax money
Statistics in the hands of a
a larger income would pay more
0
The tax fairness issue has become
confiscated by government and
politician are like a lamp post to a
dollars.
returning it to its rightful owners.
successful political tool since it was
drunk. They're used more for support
However, the fair share debate is
N
Beware spenders in false Lincoln
used to back President Bush away from
than for illumination.
not really about fair share; it's about
green.
Photo Copy Preservation
PAGE 6
TAXING TIMES
REVOLT, from Page 2
Property taxes revert to current
THE LEGAL FRONT
"An acquisition value system may
market value at 1%. According to a
operate on a fairer basis than a current
state Senate commission, that would
value system."
amount to an $11 billion tax increase.
By Jonathan Coupal, HJTA Director of Legal Affairs
We will remind the Court that
A new property tax plan will face
Proposition 13 has not only given
a long, hard battle. There is no perfect
Challenge To Proposition 13 Goes To
certainty in taxation and helped
solution. As the 18th century poet,
stimulate the economy by keeping
Alexander Pope, discovered: "Who-
United States Supreme Court
dollars in the taxpayers' pockets, but
ever hopes a faultless tax to see, hopes
it has also provided a 10% increase in
what ne'er was, is not, and ne er
- Nordlinger V. Hahn.
property taxes for local government
shall be."
each year.
Proposition 13's property tax
A major attack on Proposition 13 will be heard by the United States
The property tax is a general tax,
system should withstand the equal
Supreme Court early next year. The lawsuit is being financed by groups
not a charge for certain services. An
protection challenge. However, if
that claim the landmark measure is "unfair" and therefore want to destroy
argument is often made that owners
Proposition 13 is ruled unconstitu-
it at any cost. HJTA's lawyers argued the case in the California Court of
of similar properties should pay the
tional, this will hardly be the end of
Appeal, which rejected the challenge. The lower court agreed with
same for similar services. This
the tax revolt, as some fervently wish.
HJTA's argument that California's property tax system is/better than
argument ignores the individual
The spirit of Proposition 13 lives on.
traditional tax schemes. For example, only a system like Proposition 13
taxpayer's ability to pay.
The spirit abounds in this past
provides protection against taxes on increases in property value (paper
Britain's Margaret Thatcher
weekend's Connecticut anti-tax
profits), guarantees certainty in future property tax bills and provides a
attempted to have services paid for
rally and the polls measuring the
stable revenue source for local governments. HJTA will submit its
equally by those who received them.
opposition to California's new tax
arguments to the court later this month.
Her idea was to show how much local
increases.
A question on everyone's mind is, "What are the chances that Proposition
government spending really cost.
If the court strikes down the old
13 will be thrown out?" HJTA continues to believe that the chance of
Despite this worthy objective, the
Proposition 13, a new one quickly will
losing Proposition 13 is very small. However, if we are wrong, the results
political. results were a disaster
rise to limit taxation. Considering the
would be catastrophic. No matter how slight the possibility that Propsition
because she, too, ignored the impor-
anti-tax mood in the state, it will have
13 will be overturned, HJTA must take all precautions to protect its
tant requirement of ability to pay.
the same support as the original.
members and all California taxpayers.
What happens if Proposition 13
Symbolically, and as law, Propo-
is thrown out by the Court?
sition 13 is far from finished.
CALIFORNIA SUPREME COURT SHOWS INTEREST IN PROPO-
National Taxpayers Union
SITION 62 - Rider V. San Diego. Justices of the California Supreme
president David Stanley
Court grilled government lawyers recently in a hearing on the constitu-
presents achievement
tionality of Proposition 62, an HJTA sponsored initiative intended to plug
award to Joel Fox who
some earlier court created loopholes in Proposition 13. HJTA has
accepts on behalf
The plaque reads, "This
participated in several Proposition 62 lawsuits in the lower courts with
award is presented to Joel
only limited success. However, HJTA both briefed and argued Rider
Fox, the BoardofDirectors,
San Diego before the California Supreme Court in October and the
Members and Staff of the
questions from the justices indicated that they may agree with HJTA's
Howard Jarvis Taxpayers
Association for their out-
arguments. If the validity of Proposition 62 is upheld; it would some
d'standing work on behalf
teeth back in the requirements found in both Proposition 13 and Propo-
"all California taxpayers.
sition 62 for voter approval of many non-property related local taxes. A
The award was presented
at the 1991 National
decision from the high court can be expected within several weeks.
Taxpayers Conference in
CALIFORNIA SUPREME COURT TO HEAR IMPORTANT
Washington, D.C.
ASSESSMENT DISTRICT SUIT - Knox V. City of Orland. One of the
ways local governments have gotten around Proposition 13 is through
"benefit assessments," also called "special assessments." In fact, HJTA
COURT, from Page 1
To make certain that the initiative
recently filed suit in Orange County against such a tax, forcing a school
equally to all property owners," Fox
process is available to the people for
district to abandon its plans to use the Landscaping and Lighting Act of
stated.
a new Proposition 13, if needed, Gann
1972 to impose new taxes on local residents. (HJTA V. Orange Unified
One of HJTA's attorneys, Jay
is working on an initiative to protect
School District). Now, the California Supreme Court has agreed to hear
Curtis, a nationally recognized expert
the initiative process from attacks by
a case involving the 1972 Act, one of the main culprits in this new taxing
on tax policy with the firm of Baker
the state Legislature. HJTA is fully
scheme, in Knox V. City of Orland. HJTA had written a letter to the court
& Hostetler, McCutchen, Black,
supporting the Gann effort.
urging that it accept the case for review.
joined Joel Fox in responding to
To reinforce the defense of
questions from the press. Curtis, who
HJTA ATTACKS REAL ESTATE TRANSFER TAXES - Fielder et
Proposition 13 before the Supreme
has been hired by HJTA to assist Los
al. V: City of Los Angeles. HJTA as lead plaintiff, along with two home
Court, HJTA has hired attorney and
Angeles County in preparing the
owners and realtor groups, has sued the city of Los Angeles over its huge
Proposition 13 expert Jonathan Coupal
response to the Nordlinger suit, told
increase in real estate transfer taxes. Proposition 13 flatly prohibits these
on a full-time basis (see related story
reporters that if Proposition 13 is
taxes, bat a court of appeal in San Francisco validated the City of
page 2). Coupal's first priority will
struck down, Californians can expect
be preparing a new amicus brief to
Oakland's tax two years ago. HJTA filed suit in Los Angeles as a way to
much higher taxes. "The pressure in
challenge the other court decision, in the hope that the California
support the landmark tax cutting
the Legislature is for higher taxes,"
measure.
Supreme Court will ultimately decide the issue.
Curtis said.
The Nordlinger suit is one of three
HJTA TAKES ON VIEW TAX
Joel Fox vowed that if Proposi-
challenges filed against Proposition 13
HJTA and local homeowners have filed suit against the City of Port
tion 13 is struck down, taxpayers will
after the U.S. Supreme Court ruled in
Hueneme to overtum the recently approved "view tax." The Port
be back with a new initiative to pro-
a 1989 West Virginia case that a
Hueneme City Council voted to impose a special assessment on local
tect homeowners. "Those who want
county tax policy, with similarities to
residents ranging from $66 to $184 per year, depending on the view from
to raise our taxes may like the new
Proposition 13, was in violation of
the property and its proximity to the ocean. HJTA maintains the
one even less than Proposition 13."
the equal protection clause of the
assessment is really a special tax which, under Proposition 13, requires
Commenting from his Sacramento
United States Constitution. All three
a two-thirds vote of the people.
office, Rich Gann, president of Paul
challenges have been rejected by
Gann's Citizen committee, agreed.
state courts.
PERSONAL NOTE: For several years, I have represented HJTA in
The son of Proposition 13's co-author
numerous lawsuits seeking to protect the interests of its members, and /
In June, the U.S. Supreme Court
said a property protection constitu-
have come to know the people at HJTA on both a professional and
agreed to hear the case filed by R.H.
tional amendment would definitely be
personal level. They are the most dedicated group of tax fighters 1 have
Macy and Co., but the giant depart-
placed on the ballot if Proposition 13
ment store chain withdrew its suit
ever seen. Howard Jarvis-would be proud. Therefore, when they asked
is overturned. "Right now the only
under pressure from customers. The
me to join the team as the Director of Legal Affairs, it didn't take long for
way Proposition 13 could be improved
third suit, by Northwest Financial, Inc.
me to say yes. I look forward to working with HJTA for many years to
would be to close the gates to stop the
come.
against San Diego County, has not
ways they have found to get around
yet been appealed to the nation's
Proposition 13."
highest court.
Photo Copy Preservation
Photo Copy Preservation
IMES
TAXING TIMES
PAGE 7
current
ng to a
would
Fox Testifies Before Senate Committee on Misuse of Assessment Districts
icrease.
ill face
perfect
The following statement was made by Joel Fox before the Senate Local Government Committee
y poet,
on October 30, 1991.
"Who-
hopes
I have with me a report of the
The court of 1979 looked at
connection between a taxpayer and
an additional $1408.
1
Landscaping and Lighting Act of 1972
benefit assessments as they were
the object to be built, protected,
As this continues we will return
put together by the Legislative Intent
traditionally used in this state; the
maintained, cleaned, observed or
Service located in Sacramento. The
to the atmosphere of the pre-
rty tax
jurists could not have imagined
enjoyed, there is a potential assess-
Howard Jarvis Taxpayers Association
Proposition 13 days when the match
equal
assessments levied as a benefit to
ment lurking.
ver, if
commissioned this study this past
was set to the powder by government
property miles away from a park, as
Our world renowned view tax in
onstitu-
summer when the school maintenance
officials who decided what they
was the case in Orland; or an
Port Hueneme could be the forerunner
wanted to run their agencies, and also
end of
assessment districts began sprouting
assessment to build a new police
of taxes not only for those living by
around the state.
decided how much the taxpayers could
'y wish.
station, as they want to do in
the ocean but for those who just come
afford.
ves on.
Nowhere does this Act give the
Alhambra; or for the benefit of an
for a peek; and like Lot's wife,
Like the property tax of those
IS past
authority to school districts to establish
ocean view, as was done in Port
everyone who looks will be damned,
days, most assessments have no limits,
nti-tax
the maintenance assessment landscap-
Hueneme, over a majority protest of
in this case by the tax man.
ing district. The purpose of the Act
nor is a vote of the people required
ng the
the people. In fact, a court in a 1980
As absurd as this may sound,
before they are levied. Both charac-
tax
was to streamline procedures in the
decision- expressly stated a govern-
imagine how absurd the uses of the
teristics make assessments welcomed
1911 Assessment Act, not make
ment facility like a fire station could
current assessment districts would
traditional assessment authority
at government Halls like long lost
the old
not be constructed with a benefit
look to those legislators who passed
children.
kly will
available to a new class of government
assessment. Tell that to the people in
the original California assessment acts
entity.
The notification system can be
ring the
Alhambra.
at the beginning of the century.
ill have
Many benefit assessments and
frustrating for the taxpayers. A
Benefit assessments have
If we intend to use service charges
contract city attorney boasted of his
al.
special assessments on property are
stretched like Pinocchio's nose beyond
or user fees for each service rendered,
property taxes. There is no distinction
way to get around Proposition 13
Propo-
their original size and intent. These
such as an assessment on a parcel of
in the taxpayer's mind between these
when he suggested making the district
expanding assessment districts, and, I
property to provide for nearby
as large as possible because it was
property taxes and other varieties, and
would add, Community Service Areas,
landscaping and lighting, then perhaps
harder to get a protest vote. He further
the image is becoming blurred because
should be the focus of this committee's
we no longer need a general property
of the way assessment districts are
advised to, "Put your public announce-
investigation, not just the Landscaping
tax. But, beware the political fates.
ment of the creation of the assessment
being misused.
and Lighting Act.
Britain's Margaret Thatcher attempted
There is a clear pattern that some
district in the newspaper where it gets
If they are not checked, where will
to have services paid for equally by
government authorities and consult-
lost with the divorces. If nobody
this lead? Is it so unreasonable to
those who received them. Her idea
ants have decided that assessment
notices within 30 days, you're home
imagine a view tax on the Redwood
was to show how much government
free."
districts are the way to raise property
Coast, or the mountains around Los
spending really cost. While the logic
taxes and escape the voting Angeles?
The Committee's report notes one
for her community service charge was
city used a benefit assessment to
requirements
of
Proposition
13
If
assessments
are
appropriate
for
sound, the political results were
While a court ruled in 1979 that ocean views, why not assessments for disaster.
"launder" money for its general fund.
"true" assessments were not taxes in certain city views? Doubters should
I suggest that nearly all expanded
We are headed in that direction. I
assessments are used like that to free
the meaning of Proposition 13, the remember that beauty is in the eye of
have here a two year old tax bill from
up general fund revenues.
expanded assessment districts of today. the beholder who sets the rates.
Alameda County. On this residential
Before I conclude, I would like to
are different from the assessment Rationales for assessments appear
property the property tax is $494. Ten
say a word about the criticism levied
districts of 1979.
endless. As long as there is a remote
other assessments and charges total
See FOX TESTIFIES, page 9
tiative
de for
Gann
rotect
ks by
fully
CRAs Pose Hidden Burden for Taxpayers
se of
preme
By Norton Halper, Guest Columnist
y and
The concept of redevelopment
real blight, the CRAs are used as a
"oupal
cow pastures, and well-to-do areas like
This diversion of property tax
(urban renewal), as conceived in the
weapon for economic competition
story
Hidden Hills in L.A. County, have
revenue places a tremendous addi-
1940's, had the well-intentioned goal
between cities at the expense of local
y will
been declared blighted.
tional burden on taxpayers. The state
of cleaning up blighted neighbor-
residents, small businesses and
rief to
Cities, through their development
has to make up the loss to schools and
hoods, replacing rundown buildings
taxpayers.
utting
agencies, aggressively compete with
other local programs. Last year the
with new homes and businesses that
When Proposition 13 passed,
each other to see who can give the
state paid an additional $450 million
would serve the local community. To
cities looked for new sources of
three
most to lure autos, malls, shopping
to schools alone to make up for the
accomplish these ends laws were
revenue: The sales tax from CRA
on 13
centers, even sports teams and
property tax shortfall created by
passed which allowed cities to form
iled in
initiated projects was seen as the
stadiums.
CRAs.
Community Redevelopment Agencies
answer. Cities tried to outdo each
hat a
The idea is to increase the city's
The economic slowdown exposes
(CRAs) which would be semi-
ties to
other in making lucrative offers to
sales tax revenue, while the agency
the CRAs as a giant ponzi scheme
autonomous, the commissioners being
on of
developers, using as bait the land
gets the bulk of the increased tax on
with the taxpayers as its victims.
appointed by local elected officials.
of the
purchased at below value or taken
the property caused by the change in
While school districts, counties and
The CRA's were to obtain truly
three
from local owners through the
ownership. This additional property
cities throughout California are cutting
blighted urban property under threat
condemnation process.
di by
tax revenue, known as the tax
back vital services, the CRAs' coffers
of condemnation, paying the owners
When a redevelopment plan is
increment, is used to further expand
are flush with billions of dollars
based on the agency determined value.
Court
adopted, citizens within the boundaries
the redevelopment agency's activities.
diverted from regular taxing agencies.
To stimulate development, the CRA
R.H.
live under a cloud of uncertainty.
The original property tax base is
The Legislature must critically
would use tax breaks, low cost loans
Frightened property owners don't
available to local government to fund
epart-
examine the operation of CRAs and
and outright sale at less than true
suit
know if they should repair, improve,
vital services like police and fire
exact reforms curbing the cruel abuses
market value to attract private
The
or sell, at a reduced price to
protection, schools and trauma centers.
of the redevelopment system or, better
developers.
speculators.
I, Inc.
Howard Jarvis called it "an end run
yet, scrap the whole thing.
What is occurring now would be
Numerous abuses of redevelop-
IS not
around Proposition 13." There were
almost unrecognizable to the original
ment have occurred. Flooded areas,
lion's
179 redevelopment agencies when
Norton Halper is the president of
proponents of urban renewal. Rather
golf courses, communities needing
Proposition 13 passed in 1978; today
SCRAP, Stop the CRA Plague. He
than a tool to eliminate pockets of
only minor cosmetic improvements,
there are nearly 400
may be reached at 213/467-1753
TAXING TI
MAD, from /
TAXING TIMES
PAGE 8
and the angry
by cancellin
included scho
This column appeared in the August 15, Los Angeles Times
Beach, West
Midway Cit
THE PEOPLE WANT A
as the Place
and the Oran
VOTE IN THEIR TAXATION
MADs
Burbank. B
by Joel Fox
at a halfpenny a stamp.
but pockets
HJTA I
The "mob" opposing a school
A few pennies here, a few pennies
maintenance assessment district in
there, and soon you're talking about a
against th
School Dis
Orange County was described as
yoke of taxes.
Most of the new assessment
MAD to l'
"almost maniacal" by Jerry Sullivan,
a trustee of the Huntington Beach
districts were set up to aid education.
Union High School District
Thus those in support of the tax try to
LOCAL
FOX TES
change the focus of the debate from
TAX-
The "mob" raging against
against 11
PAYERS
Britain's infamous Stamp Act in
taxation to education. How could the
against so
Boston was described as full of "ill
tax protestors be opposed to funding
One
humors" by Francis Bernard, Royal
education?
making a
Governor of the Massachusetts Bay
The Stamp Act was instituted to
MAINTENANCE
school
Colony.
provide funds for defense of the
districts,
There are great similarities
Colonies. The primary function of any
a lawsu
between the spontaneous outburst of
government is defense of its citizens.
assessme
California property owners to the
How could the tax protestors of two
property
imposition of taxes in the form of
centuries ago be opposed to funding
membe
assessment districts in the summer of
their own defense?
protesti
1991, and the Colonists' reaction to
Neither education nor defense
almost
the British Stamp Act of 1765.
were the issues in the protests. The
The
Members of the Sons of Liberty
issue was and is taxes and how they
tarred and feathered stamp agents to
are levied.
THE BATTLE OF ORANGE COUNTY
between
Califor
protest the tax which required stamps
While the battle cry of the East
imposit
to be affixed on such things as business
Coast Americans was "no taxation
licenses, legal documents, diplomas,
without representation," the taxes on
and newspapers. Modern day tar and
the West Coast have been levied by
declared that "no taxes be imposed on
place of a vote of school trustees.
feathering for officials who voted for
duly elected officials. Wasn't the
them (the people) but with their own
However, the requirement of a two-
a new tax on property comes in the
revolution fought to establish a
consent, given personally or by their
thirds vote for tax increases was not
form of recall petitions.
representative government?
representatives.'
only part of Proposition 13's property
Proponents of the assessments
Yes, but even Colonial leaders
The Colonists complained of the
tax protection plan, it has also existed
W
don't understand what all the fuss is
protesting the Stamp Act always
arrogance of the taxing authorities.
in the state Constitution since 1879
That vanted 10 LOX
for bonds property taxes:
hatche
to mystified that a
Lhad consent to being he
The
same
cries
can
be
The way we tax ourselves how
HJTA
lawsuit an
thought that representative govern-
heard today under representati much is taken; and how it is taken
early
assessment that amounted to $2.50 per
ments make tax decisions came
government. In Port Hueneme, last is an expression of our freedom
had 11
property per month. This strategy of second
month, more than half the affected
Facing withering and continuing
sessin
breaking down a tax to a seemingly
In the Virginia House of
property. owners objected to a beach protests, many, of, the maintenance
until
insignificant amount is not uncommon
Burgesses, Patrick Henry proposed
area assessment district; the City
assessment districts have been
by lo
to those who seek more taxes. When
seven resolutions against the Stamp
Council passed it anyway.
rescinded. Facing an outraged popu-
watcl
the bonds to provide money for the
Act. One called for "taxation of the
The people are demanding a vote
lace, the Stamp Act was rescinded.
was
911 network were placed on the Los
people by themselves, or by persons
to raise local taxes.
At the time, a New Yorker wrote
MAI
Angeles City ballot last spring,
chosen by themselves to represent
California School Superintendent
that when people became "turbulent
proponents argued that the tax would
them, who can only know what taxes
Bill Honig jumped into the fray over
and uneasy" it showed "a certain sign
Cou:
amount to three cents a day,
the people are able to bear.
maintenance assessment districts
of maladministration" in government.
But, then the stamps required to
The Stamp Act Congress, the first
supporting the idea of a majority vote
His words echo down through the
be affixed to documents in 1765 started
intercolonial meeting in America,
of the people to approve the district in
years.
7
RETROACTIVE, from Page 1
proportions."
since its passage in 1978.
"In 1989, the U.S. Supreme Court
John Suttie, president of the
The HOWARD JARVIS TAXPAY-
QUOTES WORTH NOTE
Suj
put California on notice that Prop. 13
Howard Jarvis Taxpayers Foundation,
ERS ASSOCIATION (HJTA), formerly
141
may be unconstitutional when it
said his group will file its own brief
the California Tax Reduction Move-
"For 13 years Proposition 13 has
sta
decided Allegheny-Pittsburgh Coal
with the court, this one arguing against
ment, was founded by Howard and
protected Californians from a cruel
of
Company V. County Commission of retroactive ruling.
Estelle Jarvis to serve as a legal and
tax. The ever-upward spiral of
Webster County," said Kelso.- This
We re operating on the assump-
political watchdog over Proposition
property taxation had been particu-
No
may suggest to the court that it would
tion the court will uphold Proposition
13. Joel Fox serves as president.
larly unfair to seniors. For the sake
not be unfair to the state of California
13, said Suttie, "but if it shouldn't,
The HOWARD JARVIS TAX
of fairness and good economic
P1
to apply its decision retroactively.'
we'll be ready to defend against a
PAYERS FOUNDATION (HJTF),
policy, Californians ought not
to
HJTA president Joel Fox said, "A
retroactive ruling."
formerly the American Tax Reduction
abandon the historic achievement of
retroactive decision by the court may
Suttie said he has sent letters to
Foundation, was also founded by
Proposition 13."
cost California taxpayers $28 billion
every member of the Legislature, the
Howard Jarvis. It is separate from the
Congressman Tom Campbell
- $933 for every man, woman and
Governor, the state's other constitu-
HOWARD JARVIS TAXPAYERS
child living in California." The $28
tional officers; and every tax assessor
ASSOCIATION and is devoted to
"During 19 years in the Solano
S
billion estimate is based on data
in California asking them to sign the
promoting economic education and the
County administrator's office, I
supplied by state Board of
foundation's legal brief.
study of tax policy. The Foundation
learned about local duplications in
Equalization member Matt Fong.
"When looking down the barrel
recently funded four major academic
services. Activities were allowed
"While we're confident that the
of a $28 billion tax hit, it's critical we
studies to provide alternatives that
because elected officials did not want
court will uphold the constitutionality
stand together," concluded Fox.
would protect taxpayers if Proposi-
to offend other elected officials, and
of Proposition 13, we're not taking
Authored by tax crusaders
tion 13 is overturned by the U.S.
funds were spent that might not benefit
any chances," said Fox. "Obviously,
Howard Jarvis and Paul Gann,
Supreme Court. John Suttie serves as
all the county but would help an
a $28 billion property tax bill would
Proposition 13 has saved California president.
elected official in the next election."
be an economic disaster.of
Don Dowling
Photo Copy Preservation
Photo copy Preservation
TAXING TIMES
PAGE 9
MAD, from Page /
football stadium, HJTA attorneys are
and the angry complaints of taxpayers
studying the possibility of filing suit
by cancelling their efforts. These
against the Jefferson Union High
included school districts in Huntington
School District in Daly City, the
Beach, Westminster, Fountain Valley,
Sequoia Union High School District
Midway City, and Fullerton, as well
in Redwood City and Bonita Unified
as the Placentia-Yorl Linda Unified
in La Verne, all of which have
and the Orange Unified.
approved MADs.
MADs have also been rejected in
HJTA believes that success in one
Burbank, Escondido and Kem County,
suit will eventually invalidate all
but pockets of resistance remain.
MADs, but the concern remains that
HJTA has followed up with a suit
if these school districts are not
against the Whittier Union High
challenged, other districts will think
School District which has imposed a
it is safe to impose assessments on
MAD to pay for refurbishment of a
local property owners.
FOX TESTIFIES, from page 7
assessment districts in the summer of
against the taxpayers for rallying
1991, and the American Colonists'
against some of these assessments.
reaction to the British Stamp Act
One of the consultants, who was
of 1765.
making a tidy profit. from pushing the
The British officials labeled the
school maintenance assessment
American patriots who protested the
districts, claimed to be mystified that
tax "mobs." And the tax which started
a lawsuit was brought against an
at a half-penney, could be considered
assessment that amounted to $2.50 per
"insignificant."
property per month. A school board
The Stamp Act was instituted to
member complained that those
provide funds for defense of the Colo-
Joel Fox talked with political commentator Bruce Herschensohn before Taxpayer Action
protesting the assessments were
nies. The primary function of any gov-
Dayrally in West Los Angeles on Oct. 19. Later the same day, Fox spoke at rallies in Orange
emment is defense of its citizens. How
County (below) and in Ventura County (bottom). HJTA's Jonathan Coupal spoke at the
almost a "maniacal mob."
Sacramento rally.
There are great similarities
could the tax protestors of two centu-
between the spontaneous outburst of
ries ago be opposed to funding their
California property owners to the
own defense, and protestors of today
imposition of taxes in the form of
See FOX TESTIFIES, page 11
CITIZEN TAXPAYERS
STRIKE AGAIN!
When new tax schemes are
in person at school board meetings, as
hatched by local government, it is
well as the many others who protested
HJTA's members that provide the
by phone or letter, are an example for
early warning system. We at HJTA
taxpayers everywhere. We would like
had never heard of maintenance as-
to tip our HJTA hat to two tax fighters
sessment districts (MADs) for schools
in particular. Carole Walters and
until they were brought to our attention
Roland Krucger not only were stal-
by local tax fighters. As a result of the
wart in keeping the pressure on the
watchfulness of these citizens, HJTA
Orange Unified School Board, but they
was able to move rapidly against the
stood tall for the taxpayers by
MADs with legal action.
volunteering to serve as co-plaintiffs
The many hundreds of Orange
in HJTA's lawsuit against the school
County residents who protested MADs
district.
TERM LIMITS UPHELD
LAWMAKERS' RETIREMENT SET
By a vote of 6 to 1, the California
one of 'politicians'.' Said Mosk, "The
Supreme Court has upheld Proposition
intitiative process is out of control."
140, voter approved term limits for
Proposition 140 limits state con-
state lawmakers and constitutional
stitutional offices and state senators
officers.
to two four-year terms (eight years)
After Proposition 140 passed in
and members of the Assembly to three
November of 1990, indignant incum-
two-year terms (six years). The court
bent legislators filed suit claiming that
also upheld limitations on how much
Proposition 140 denied voters the right
the Legislature can spend on itself,
to re-elect candidates of their choice
but limitations on pensions must begin
as well as infringed on the rights of
with those elected in 1992.
candidates for re-election. The court
Jonathan Coupal, who represented
rejected these arguments.
term limit sponsors in court, hailed
Term limits are justified by "the
the ruling as a "victory for the voters."
state's strong interest in protecting
Lee Phelps, co-author of the term
against an entrenched dynastic legis-
limits measure, said, "This will rattle
lative bureaucracy, thereby encourag-
the foundations of that most
ing new candidates to seek public
unresponsive of all institutions, the
office," wrote Chief Justice Malcolm
U.S. Congress. And they' 're our next
Lucus for the majority. Justice Stanley
term limitation target." Phelps is the
Mosk was the sole dissenter. He
founder of the Aptos based Alliance
challenged the right of voters to create
of California Taxpayers and Involved
a "legislature of "citizens' in place of
Voters (ACTIV).
Photo Copy Preservation
MES
TAXING TIMES
PAGE 11
FOX TESTIFIES, from page 9
TAX BYTES
be opposed to education funding?
TAXPAYERS
Neither education nor defense
were the issues in the protests. The
SELF-DEFENSE MANUAL
NO PROP 13 IN
issue was and is taxes and how they
For those members who don't have one,
are levied.
FLORIDA
we still have copies of the "Howard Jarvis
The way we tax ourselves how
Taxpayers Association Taxpayers Self-
Dupayers
Association
President Bush mother
much is taken, and how it is taken -
Defense Manual."
TAXPAYERS
challenging her latest property
is an expression of our freedom.
This useful 20 page booklet has tips
tax bill. Dorothy Walker Bush
SELF-DEFENSE
Which leads to the issue: should
on how to fight taxes at the grass roots
MANUAL
says the appraiser's $682,320
these assessment districts be allowed
level, as well as answers to some of the
assessment of her Florida home
if voted on by the people?
most commonly asked questions about
is $173,000 too high. Mrs
California has a crazy quilt of
state and local taxes.
Bush's total tax bill for her two
assessment procedures, protest mecha-
While they last, the booklet is free
bedroom two-bath house with a
nisms, and overrides.
to members who mail the coupon below
swimming pool is $11,840.
directly to:
To simplify the use of assess-
ments, I recommend that a vote of the
Booklet
c/o HJTA
CONGRATULATIONS!
people be required for all expanded
621 S. Westmoreland Ave., Ste. 202
assessments and community service
According to the Los Angeles
Los Angeles, CA 90005
areas.
Times, lobbyists were asked to
No phone calls please.
And, I believe this vote should be
buy $1,000 advertise
a two-thirds vote for the same reason
ments to extend their congratula
our state constitution has had a two-
NAME
tions in a commemorative book
nent
thirds vote governing local general
ADDRESS
for Assemblyman John
obligation bonds requirements since
Vasconcellos Santa Clara),
1879. A simple majority vote means
CITY AND ZIP
the chairman of the Ways and
the
the property owners will carry an
PHONE
Means Committee, at his 25th
unfair burden of government.
legislative anniversary gala.
TAXPAYERS PAY FOR
SACRAMENTO REPORT, from
test on each legislator's support for
LOBBYISTS
required a ballot pamphlet to include
Page 4
Proposition 13.
will
a summary statement of the meaning
At: a time when many local
that this was merely a thinly veiled
government entities are pleading
Initiative process
of "yes" and "no" votes and one that
scheme to raise property taxes
required pro and con arguments on
poverty, records on file with the
without a vote of the people,
still intact - -
the petition itself.
Secretary of State' office show
notwithstanding the fact that it was
that local governments, special
called a "parcel" or "excise" tax.
In addition to the bills dealing with
Another threatening measure
SB 246 (Presley) - Earlier in the
Proposition 13 there were many
vetoed by the Governor in part at
districts, government associa
measures we have previously
HJTA's request was SB 55 (Alquist).
here
tions and public employee
1991 session Assemblyman Robert
Campell (D Richmond) had intro-
discussed aimed at weakening the
This bill established a Constitutional
organizations spent $5.5 million
duced AB 394, which-was yet another
people's right to use the initiative
Revision Commission to study the
lobbying the Legislature in just
process to pass or change laws. Most
budget and initiative reforms. Based
the first half of the year
incarnation in a series of bills over the
of these bills were either delayed, made
on the potential makeup of the
Seventy sevenicities and twenty
last several years attempting to allow
counties to fund public employee
into two-year bills to be taken up
commission and the language of the
nine counties have their.own,
tax paid lobbyists
pension benefits by raising property
next year, or killed in the Legislature.
bill, we saw this as a two-pronged
"Polities makes strange bedfellows
attack on Proposition 13' and the
bly
Needless to say they aren't in
taxes without a vote of the people.
was seldom more accurate than when
initiative process.
Sacrament campaigning for
(Opposition from HJTA, Cal Tax and
we joined Common Cause, the
Given the huge number of bills
lower taxes
the Contra Costa County Taxpayers
Association had resulted in vetoes of
Planning and Conservation League and
that targeted both Proposition 13 and
the League of Women Voters to
the initiative process, we feel our
two previous bills by Governor
GRAVE BILLING
oppose these measures. Of the bills
legislative effort has been very
Deukmejian.) After we were success-
ERRORS
that made it to the Governor's desk,
successful. However, we must not
ful in stopping this latest attempt to
burden property taxpayers, a last
nearly all were vetoed, including those
forget to express our gratitude to the
Blaming bookkeeping errors,
Stanford University has paid
minute legislative maneuver was
that HJTA strongly opposed. These
Governor and those members of the
included:
Legislature who stood with us.
back $1.35 million to the federal
pulled wherein the provisions of the
government for inappropriate
moribund AB 394 were amended into
AB 1331 (Speier) - This bill
established a pre-circulation review
The challenge
research bills. Among those
an unrelated bill authored by Senator
Robert Presley, Chairman of the
process, increased the initiative filing
ahead -
things for which taxpayers were
fee from $200 to $1,000 and set
billed: Six years of upkeep on the
powerful Senate Appropriations
There are still many bills awaiting
Stanford family mausoleum at
Committee. We strongly opposed this
up a legal review team to review all
action next year, which threaten
$1,300 per year
amendment and ultimately secured
initiatives before submission to the
Proposition 13 and the initiative
Governor Wilson's veto.
Attorney General for title and sum-
process. If we are to prevail, we must
mary. The Governor agreed with our
be prepared to continue a strong
Is
FROM THE DEPTHS OF
Big three await
criticism that this was little more than
lobbying effort. Please continue to
THE PORK BARREL
action -
an attempt to obstruct access to the
sign the petitions and post cards to
initiative process and that the courts
Since we are no longer paying
elected officials that we send you. The
Despite our success to date, we
were the appropriate arbiter of the
grass roots support of HJTA members
for mausoleum upkeep, appar-
must continue to focus attention on
legality of initiatives.
is vital to our success on behalf of all
ently Congress, believes there is
these three major bills, ACA 4 (Klehs),
Other initiative-assault bills vetoed
taxpayers.
surplus to spend on other dead
ACA 6 (O'Connell) and SCA 8 (Hart),
by the Governor included one that
issues. The Wall Street Journal
which will be considered next year.
reports that there is $150,000 in
All of these bills would make it easier
the current federal budget to
to raise property taxes and they
BEST WISHES FOR THE HOLIDAYS
study the economic and social
have the support of powerful special-
Estelle Jarvis
contexts of the 1878 feud
Joel Fox
spending interests. We will continue
Board of Directors
S
between the Hatfields and
to devote our efforts to the final defeat
Mark Dolan
President, HJTA
McCoys. The feud, by the way,
of these ill-conceived measures and
Dolores Tuttle
Board of Directors
started with the theft of a pig.
Trevor Grimm
keep HJTA members informed of our
Board of Directors
progress. As promised in our last
John Suttie
General Counsel
Compiled by HJTA Executive
report, we intend to publicize how
Board of Directors
Director, Kris Vosburgh
Ralph Horowitz
Kris Vosburgh
lawmakers finally vote on these bills.
Board of Directors
Executive Director
This will provide.an.excellent litmus
"California's Organization of Tax Fighters"
Taxing Times
The Official Newsletter of the Howard Jarvis Taxpayers Association
Howard Jarvis, Founder
Spring 1992
GOVERNOR, LAWMAKERS PLEDGE SUPPORT
FOR PROP. 13 AT HJTA PUBLIC HEARING
JOHN BARR FOR TAXING TIMES
FOX PROMISES NEW INITIATIVE
IF PROP. 13 RULED INVALID
On December 14, HJTA ex-
HJTA on behalf of Proposition 13 and
amined the survival and future of
the taxpayers. (In addition to submit-
Proposition 13 during a three hour
ting its own brief to the Supreme
public hearing. The Los Angeles
Court, HJTA has provided legal
Biltmore was the scene of the packed
assistance to Hahn and the County
meeting of over 600 HJTA members
of Los Angeles in the defense of
and friends, including Estelle Jarvis
Proposition 13.)
and Richard Gann, son of Proposition
Jonathan Coupal, HJTA Director
13's coauthor.
of Legal Affairs, reviewed the
HJTA President Joel Fox intro-
Nordlinger Challenge to Proposition
duced keynote speaker Governor Pete
13, which is based on a U.S. Supreme
Wilson. Wilson pledged his continu-
Court ruling in a 1989 case out of
Gayle Wilson and Estelle Jarvis at December HJTA hearing on Prop. 13.
ing backing for Proposition 13. He
West Virginia. The court ruled a
told HJTA members he and Assem-
county policy, which taxed similar
WILSON ASKS SUPPORT FOR
bly Republicans are filing a brief with
properties at differing amounts and
the U.S. Supreme Court in support of
had similarities to Proposition 13, was
TAXPAYER PROTECTION ACT
Proposition 13. The State Senate also
in violation of the equal protection
voted to submit its own brief on be-
clause of the 14th Amendment to the
HJTA BACKS GOVERNOR'S PLAN
half of the tax limiting measure. (The
U.S. Constitution. Coupal pointed out
full Assembly, under the leadership
there were also significant differences
"State Government is running up
authority to the governor to declare a
of Willie Brown, has refused to fol-
See HEARINGS, Page 7
a bill that the people of California
fiscal emergency if revenue drops or
low the governor's and the State
'can't afford," Governor. Pete Wilson
expenditures increase causing a
Senate's lead.)/
told HJTA members attending the Dec-
budget imbalance of at least three
If the high court rules Proposition
*BULLETIN*
ember 14 hearing on Proposition 13.
percent. In a fiscal emergency, the
13 unconstitutional, the governor
During his program opening re-
governor may reduce spending that
promised immediate legislative action
SUPREME COURT TO
marks, Wilson said that unless action
is not specifically protected by the
to replace the current law with simi-
HEAR PROP. 13
is taken to control autopilot spend-
state constitution.
lar taxpayer protections which meet
CHALLENGE ON FEB. 25
ing on public assistance programs,
* Ending Budget Impasse - al-
the court's standards. Wilson went
California will be forced to reduce
The U.S. Supreme Court will hear oral
lows the governor to declare a fiscal
on to describe his Taxpayer Protec-
spending on both higher and basic edu-
emergency if the budget is not passed
arguments in the Proposition 13 chal-
tion Act of 1992, which he intends to
cation, public safety, and prevention
lenge on Feb. 25. Joel Fox and HJTA
and signed by July I. The prior year's
put before voters this November. (See
programs that can make the
budget would continue to operate until
attorneys will be present and will
accompanying story.)
difference between success or failure
report back to HJTA members.
the Legislature and governor pass a
The legal session of the program
for children.
new budget bill.
began with Los Angeles County As-
THE DECISION WILL NOT
The governor outlined for HJTA
*
Forfeit Salaries - requires the
sessor Kenneth P. Hahn, the defen-
BE RENDERED THE DAY
members the Taxpayer Protection Act
Legislature to pass a budget by June
dant in the Proposition 13 case being
OF THE HEARING.
initiative he is proposing to rein in
15, and if it fails to do so, the governor
considered by the U.S. Supreme
state spending through reforms in the
and Legislature forfeit their salaries
It will be at least 30 days after the oral
Court. Hahn told Proposition 13 sup-
budget process.
until a budget is passed. (The state
arguments that a final decision will be
porters that he is a taxpayer advocate.
Major elements of the Taxpayer
budget has come in on time in only six
announced and it could take as long as
He said it would be chaos if Proposi-
Protection Act include:
four months. For more information
of the last 25 years.)
tion 13 were overturned and he
*
Fiscal Emergencies - gives
See TAXPAYERS, Page 12
see "President's Message" page 2.
pledged to continue to work with
Howard Jarvis Taxpayers Association
621 S. Westmoreland Avenue Dept. 2473
Nonprofil
$Taxing Times
Los Angeles, CA 90005-3971
Organization
U.S. POSTAGE
HJTA
PAID
Published quarterly. by the Howard Jarvis Taxpayers
Howard Jarvis
Association (HJTA) and the American ] Reduction
PROPOSITION 13
Taxpayers
Association
Movement (ATRM).. Vosburgh,
HEARING PHOTOS
Members of and enjoy
HEADQUARTERS
See Pages 10-11
621
Photo Copy Preservation
PAGE 2
TAXING TIMES
TA
PRESIDENT'S MESSAGE
THE LEGAL FRONT
Nine Black Robed Justices
By Jonathan Coupal, HJTA Director of Legal Affairs
On February 25, the United States
major lawsuits against Proposition 13
UNITED STATES SUPREME COURT SETS
Supreme Court will hear oral argu-
which HJTA has been battling
ments in the "equal protection" chal-
ever since.
HEARING DATE ON PROPOSITION 13 ATTACK.
lenge to Proposition 13. Along with
The hearing of February 25 will
- Nordlinger V. Hahn.
HJTA attorneys Trevor Grimm and
be the most important Proposition 13
Jonathan Coupal, I will be present.
has ever faced. As the justices ask
This will be my second visit to
questions of the attorneys in the case,
The major challenge to Proposition 13 will be heard by the United
the Supreme Court's chambers.
In
I will be taking it all in - written
States Supreme Court on February 25th of this year. HJTA has worked
December of 1988, HJTA General
notes are prohibited by court rules -
closely with the County of Los Angeles and County Assessor Ken
Counsel Trevor Grimm and I heard
so I can report back to you.
Hahn to ensure that Proposition 13 receives the best possible legal
the arguments in Allegheny-Pitts-
The first thing I will do when the
defense. We are pleased that the county has retained Rex Lec, former
burgh V. Webster County, West Vir-
hearing concludes is go to the phone
Solicitor General of the United States, to argue the case.
ginia, the case that gave rise to the
to dictate a message to be sent imme-
HJTA argued this important case in the state court proceedings.
current challenge to Proposition 13.
diately to HJTA members. I will
We remain confident that the highest court in the land will agree with
I remember feeling I was witness-
give you my evaluation of the pro-
our arguments that California's property tax system is better than
ing history in the making. Here were
ceedings as well as the analysis of
traditional tax schemes. For example, only a system like Proposition
nine black robed justices acting as
the attorneys.
13 provides protection against taxes on increases in property value
judge and jury in a matter that could
Will the justices provide clues to
(unrealized profits), provides certainty in future property tax bills and
prove critical to California taxpayers
their thinking? Possibly. Jon Coupal,
provides a stable revenue source for local governments.
- and they would render a decision
who has argued Proposition 13 and
from which there could be no appeal!
term limits cases before the Califor-
CALIFORNIA SUPREME COURT UPHOLDS VOTE REQUIRE-
As you now know, shortly there-
nia Supreme Court tells me that the
MENTS OF PROPOSITION 13. Rider V. San Diego. As originally
after, the justices found Webster
justices, through their questions,
intended by Howard Jarvis and Paul Gann, Proposition 13 limited both
County, West Virginia, had violated
sometimes reveal their point of view.
property taxes and other kinds of "special" taxes which might be raised
the U.S. Constitution when it imposed
I will not attempt to make a pre-
to make up for lost property tax revenues. This was done by imposing
a tax policy with similarities to our
diction. Keep in mind, the decision
a two-thirds vote requirement for local "special" taxes. Unfortunately,
Proposition 13.
of the court will not be rendered for at
the Rose Bird court created two major loopholes in the clear language
Still, Proposition 13 supporters re-
least 30 days after the oral arguments
of Proposition 13. First, the court ruled in 1982 that the two-thirds
ceived some encouragement. HJTA
and it may take much longer. Most
vote requirement would not apply to any special district which was not
had submitted a brief arguing the court
of the work of the court is done be-
previously empowered to levy a property tax. Therefore, a transporta-
should not tie a negative decision in
hind the scenes through the legal briefs
tion district which levied only a sales tax was not legally obligated to
the West Virginia case to California's
submitted by the interested parties.
submit its tax to the people as required by Proposition 13. Second, the
Proposition 13. Chief Justice
The oral arguments are only one hour
Rose Bird court said that the two-thirds vote requirement would not
Rehnquist wrote, "We need not and
in length. We will not have any idea
apply to any tax which was placed in the general fund of a government
do not decide today whether the
how the justices will react to the hun-
entity. Both of these loopholes were exploited quickly by local
Webster County assessment method
dreds of pages of written arguments
governments to raise hundreds of millions of dollars in new taxes.
would stand on a different footing
that have been submitted on both sides
In Rider V. San Diego, decided in December, the California Supreme
if it were the law of a State, general-
of this issue.
Court curtailed these two loopholes. It first ruled that local
ly applied, instead of the aberational
Of one thing we can be certain.
governments could not conspire with the legislature to create sham
enforcement policy it appears to be.
Thanks to the continuing support and
special districts whose only purpose was to avoid the two-thirds vote
The State of California has adopted
confidence of HJTA members, we
requirement of Proposition 13. Second, the court said that whether
similar policy as Article XIIIA of its
have done everything possible to see
a tax is a "special" tax, depends on the purposes for which it is raised,
Constitution, popularly known as
that Proposition 13 receives the best
not whether it is put into a "general" fund. Rider is one of the most
'Proposition 13."
legal defense.
important Proposition 13 cases ever decided. It will go far in slowing
However, Rehnquist gave hope to
If we win, HJTA will continue as
ever increasing special taxes and will directly help several of HJTA's
Proposition 13 opponents when he
the guardian of taxpayers' rights as
other lawsuits currently pending in the courts. HJTA both briefed and
also wrote, "the fairness of one's
Howard Jarvis intended.
argued the Rider case before the Supreme Court.
allocable share of the total property
If we lose, HJTA will not stand
HJTA FILES NEW ASSESSMENT DISTRICT SUIT. Howard
tax burden can only be meaningfully
idly by. We will be at the forefront
Jarvis Taxpayers Association V. Bonita Unified School District.
evaluated by comparison with the
of the battle with a new initiative
One of the ways local governments have gotten around Proposition 13
share of others similarly situated..."
to protect taxpayers. The spirit of
is through "benefit assessments," also called "special assessments."
These words gave inspiration to three
Proposition 13 will prevail!
HJTA recently filed suit in Los Angeles County against a school
district for attempting to use the Landscaping and Lighting Act of 1972
to impose new taxes on local residents. Several school districts previ-
ously attempted this circumvention but most dropped their plans after
being sued by HJTA (HJTA V. Orange Unified School District).
HJTA has also brought suit against the Whittier Union High School
District in a similar suit.
HJTA WILL SUE TO BLOCK
SAN FRANCISCO SALES TAX INCREASE
As this edition of "Taxing Times" goes to press, HJTA is preparing to
go to court to invalidate San Francisco's Proposition A, which will
increase the local sales tax by 1/4 cent. (The new 8.5% rate would be
the highest in California.) When the measure, appeared on the ballot in
December, it failed to receive the two-thirds vote required by
Proposition 13. This requirement was reaffirmed in the case of Rider
16 San Diego.
SEE-PAGE 4 FOR
Joel Fox, ACTIV's Lee Phelps, and HJTA's Jonathan Coupal during a break at
November meeting of grass roots taxpayer groups. The meeting, sponsored by
SACRAMENTO REPORT
HJTA, Paul Gann's Citizens Committee, and ACTIV, brought together 36 repre-
sentatives of 17 taxpayer organizations to build a united front in the face of the
threats to Proposition 13.
Photo Copy Preservation
TAXING TIMES
PAGE 3
The 22 Greatest
Songs of the Legendary
Patsy
As Seen
Cline
On
22 Great Hits on
Patsy Cline is one of the true singing legends to
2 Cassettes, 2 Records
emerge from the 50's. Her pure honest voice touches
Estelle Jarvis and Joel Fox joined Governor Wilson as he announced that
or 1 Compact Disc
your deepest emotions with every song. Even today.
he and Republican legislators would submit a friend-of-the-court brief on
nearly 30 years after a plane crash tragically ended
behalf of Proposition 13. The announcement was made at a Nov. 11 press
her life, Patsy's songs are requested more than ever
conference on the lawn of the home of Muriel and Jim MacGregor in Bellflower.
I Fall To Pieces
on radio stations all across America. And now
The MacGregors, who built their home in 1951, said they would probably have
to sell their house if Proposition 13 is overturned.
She's Got You
Heartland Music brings you her most loved
recordings in this classic, 2-record treasury
This article appeared in the Nov. 25 Los Angeles Times
Sweet Dreams
The Legendary Patsy Cline.
ONLY A TAX CUT WILL SLAY OUR
Walkin' After Midnight
The Most Complete Patsy Cline
FISCAL MONSTER
Crazy
Collection Ever Offered.
By Joel Fox
Anytime
I FALL TO PIECES CRAZY SHE'S GOT YOU.
Imagine how Hollywood would
business to grow and create more jobs.
handle it: "Just When You Thought
Easier said than done, considering that
Blue Moon Of Kentucky
These are all her best-loved classics from her very
first hit.. WALKIN' AFTER MIDNIGHT to the last
It Was Safe to Count Your Money.
many in the business community are
Crazy Arms
beautiful songs she ever recorded... SOMEDAY and
Budget Crisis II!" Coming soon from
prepared to abandon California. One
in four companies is contemplating
Faded Love
SWEET DREAMS (the title song of the major motion
your state government, a creature that
has more lives than Frankenstein's
leaving the state, up from one in seven
picture honoring Patsy's life). 22 beautiful original
Half As Much
monster.
last year, according to a current
recordings - all digitally remastered to sound better
After "solving" the $14.3-billion
than ever before.
survey of business leaders belonging
Have You Ever Been
budget deficit, the largest in Califor-
to the Business Roundtable.
nia history, with tax increases and
Lonely
Rarely do you get the opportunity to collect all the
In the early 1970s, Seattle, in the
some spending cuts, the governor and
midst of an economic slowdown.
I Love You So Much
most beautiful songs of such legendary singer, Every
the Legislature now face the second
displayed billboards showing a single
It Hurts
song is a timeless classic you'll enjoy for years to
largest deficit in the state's history-
hanging light bulb with pull chain
come. This is an opportunity you won't want to miss.
$5 billion and counting. Sorry, Jack,
and a message: Will the last one
San Antonio Rose
the taxman's back!
Order Now. No Risk.
out of Seattle please turn out the
The Department of Finance issued
Love Letters
light. The California Chamber of
Satisfaction Guaranteed.
a report last week that shows things
Commerce may want to start a simi-
In The Sand
will only get worse.
lar campaign here.
Call toll free or mail the coupon today. Listen to
Someday You'll Want Me
California's population is grow-
So, what do we do?
The Legendary Patsy Cline with no risk or
ing. but the bulk of the increase is
To Want You
There are a number of things we
obligation. If you' not convinced that this will be
made up of people who lend to use
can do, starting with-and don't stop
The Wayward Wind
one of your favorite albums, just return it within 30
government services, such as the
me if you've heard this one-tax cuts.
days for a full refund including shipping & handling.
young and immigrants.
Business leaders list the poor tax
True Love
While the state is witnessing an
climate as a major reason to look for
Credit Card Customers
overall growth in population, many
greener pastures-greener, as in
You Belong To Me
Call Toll-Free 1-800-788-2400
people are leaving. The Finance
keeping more money in the busi-
Your Cheatin' Heart
24 Hours Everyday
Department study says that those
ness for expansion. But it is not only
on the way out, are thesproducers,
business that needs money.
I Can't Help It If I'm Still
Ask for Operator 805
the taxpayers.
Nothing perks up consumer con-
In Love With You
Or Mail The Coupon Below Today !
The report projects that in the year
fidence more than money in the
2000 our state will have 2.02 taxpay-
shopper's pocket. California consum-
Leavin' On Your Mind
ers paying for every public-school stu-
ers cannot be very confident or very
Not Sold In Stores.
Lovesick Blues
dent, down from the current ratio of
cager to spend, given their increased
2.63 to 1. Each recipient of Aid to
WHEARTLAND MUSIC
tax burden. According to the non-
NO-RISK ORDER FORM
Families with Dependent Children
partisan. Washington-based Tax
is helped by 6.94 taxpayers today.
MAIL TO: HEARTLAND MUSIC
1341 Ocean Avenue
Box
106
Foundation, California's per-capita
Dept. 805
Santa Monica, CA 90401
In less than 10 years, only 2.94 tax-
state tax burden jumped about $220 a
payers will be funding each recipient.
Yes, please send me The Legendary Palsy Cline to preview with no obligation. If am not
person to $1,679 in 1991, which
entirely satisfied for any reason, can return the collection for a full refund including shipping
The report conjectures that the
vaulted California in one year from
and handling.
state's budget deficit at the turn of the
ninth on the list of comparative state
pay only $2.50 shipping and handling no matter how many collections order.
century will be a whopping $20 bil-
tax burdens to fifth.
Send my collections on:
805
lion in a budget of $105 billion, nearly
If taxes are cut, what will happen
2 Records Item# HL 1097/98 $12.98
NAME
twice today's budget. No projection
to people who rely on public services
2 Cassettes Item# HC1097/98 $12.98
is included for local government bud-
supported by tax dollars? As Senate
CD Item# HD1097/98 $16.98
ADDRESS
RI API
gets. However, it is clear that they
Majority Leader George Mitchell said
I,I CHECK or MONEY ORDER.
will be in the same boat, going down
recently, the best welfare program is
Amount Enclosed $
CITY
STATE
ZIP
in a sea of red ink with too few
a job. We must stimulate the economy
Sorry no C.O.D.'s OR CASH,
taxpayer life preservers to save them.
Please allow 3-4 weeks delivery.
and create those jobs, and a tax cut is
SIGNATURE REQUIRED FOR CHARGE ORDERS)
CA and NY residents add sales lax.
The weapon suggested by the
a way to do it.
CHARGE IT:
Finance Department to slay this
While cutting taxes could be the
[ VISA
MASTERCARD
AMEX
ACCOUNT NO.
resurrected monster is for California
EXP. DATE
See FISCALMONSTER, Page 7
Photo Copy Preservation
PAGE 4
TAXING TIMES
Sacramento Report
HOW THEY VOTED
ACA 6 would undercut Proposition 13 by making it easler to pass local bonds
by Steve Carlson
that must be repaid by property owners. Because it is a constitutional amend-
HJTA Legislative Advocate
ment, trequires atwo thirds vote each house of the Legislature. Inthe Assembly
the vote was 44 yes to 29 no. Lacking 54 votes, the measure failed.
1992 SESSION STARTS OFF WITH A BANG -
ACA 6
Despite the intense focus on reapportionment and the budget deficit, this second year of the
ASSEMBLY
YES
NO
NOT
VOTING
legislative session has already seen a number of new proposals in anticipation of the U.S. Supreme
Allen
Court's February 25 hearing in Nordlinger Hahn, and an attempt to pass an anti-Proposition 13 bill.
Alpert
ACA 6 would undercut Proposition 13 by lowering the vote requirement to pass local bonds that
Achie-Hudson
must be repaid by property taxes. Last year we wrote HJTA members asking you to send postcards in
Andal
opposition to ACA 6 to your Assembly and State Senate representatives. Thanks to the thousands of
Arelas
you who responded by writing, sending cards and calling, we were given a fighting chance to defeat
Baker
this bill.
Bane
On January 23, with the briefest of notice, Assemblyman Jack Connell (D-Carpinteria) put
Bates
ACA 6 before the full Assembly for a vote. Because Governor Wilson supported this measure,
Becerra
supporters of Proposition 13 were concerned Democrats could enlist enough Republicans to obtain the
Bentley
required 54 votes (a two-thirds vote of the Assembly is necessary to pass a Constitutional Amendment).
Boland
In discussing the measure with legislators and their staff immediately prior to the vote, we were
Bronzan
gratified at the strong and virtually unanimous opposition to ACA 6 by Republican members. That
Brown
support translated into the defeat of ACA 6 by a vote of 44 to 29, ten votes short of the requirement.
Bruite
The accompanying chart shows how your Assembly representative voted on ACA 6.
Burton
At press time, ACA 6 was on the Assembly inactive file, meaning that the bill is on life support
Campbell
Cannella
but not yet completely dead. We will keep close track of this issue.
Chacon
Two other anti-Proposition 13 measures, SCA 8 and ACA 4, are pending. However, given the
Chandler
1. catment ACA 6 received in the Assembly, it is unlikely those bills will be moved without significant
Clute
change in attitudes in the Assembly.
Collins
Other measures dealing with Prop. 13 include:
Connelly
AB (Klehs) - this bill, attempting to curb the retroactive impact of a possible overturning of
Conroy
Prop. 13 was passed unanimously by the Assembly Revenue and Taxation Committee and the full
Cortese
Assembly. During the hearing, the bill was amended at the recommendation of Assemblyman Phil
Costa
Isenberg (D-Sacramento), who suggested that assessments be frozen for a two-year period after an
Eastin
adverse court decision to permit the legislature to craft adequate implementation measures.
Eaves
As befits the born-again nature of some new Proposition 13 supporters, AB 851 garnered many
Elder
co-authors from both parties. To understand why this is happening, one only needs to look at the new
Epple
1, islative district lines, confirmed by the State Supreme Court the day before this article was written.
Farr
R districting will force many legislators to run in new, more competitive districts where the property
Felando
taxpayer's vote could well mean the difference between victory and defeat. Thus we are seeing many
Ferguson
instant converts to Proposition 13.
Filante
ACR 80 (Brulte) - this Assembly concurrent resolution requests Legislative Counsel, on behalf
Floyd
of the legislature, to intervene on behalf of Prop. 13 in the Nordlinger case. In a clear example of looking
Frazee
ahead to new districts, the Senate Rules Committee, chaired by Senate President-Pro-Tem-David
Friedman, T.
Roberti - hardly a Prop. 13 supporter during his years in the legislature - voted 4 to 1 with Roberti
Friedman,
in support of the Senate's backing of Prop. 13 in the Supreme Court.
Firzzelle
7
Gotch
SCA 31 (Kopp) - this measure introduced by Senator Quentin Kopp (I-San Francisco) intends
to deal with the potential overturning of Prop. 13. In this measure, if Prop. 13 were invalidated, all
Hannigan
Hansen
property would be reappraised as of the 1993 lien date but the homeowners' exemption, currently
Il
Harvey
$7,000 of value, would change to 75 percent of the full cash value of the dwelling.
Hauser
Another area of major concern to HJTA is assessment districts. We recently supported SB 773
Hayden
to
(Bergeson) which sought to tighten some of the assessment procedures of the Landscaping and
Horcher
Lighting Actof 1972. Although we still believe in and continue to work for a popular vote requirement,
Hughes
we supported SB 773 as an incremental step to curb some of the abuses of assessment districts and return
Hunter
more due process rights to taxpayers. The bill, which passed the Senate Local Government Committee
Isenberg
unanimously: 1) requires notices of proposed assessments to be mailed to taxpayers; 2) revises the
Johnson
bi
definition of majority protest to represent 50 percent of the value of the lands in the district rather than
Jones
50 percent of the area and; 3) prohibits a local agency from imposing an assessment if there is a majority
Katz
protest. This last provision repeals the current power of a local agency to override a majority protest
Kelly
with a four-fifths vote.
Klehs
We have also heard there will be an attempt to revive legislation dealing with county service areas.
Knowles
Readers will remember our last minute efforts resulting in a veto of AB 1505 (Farr) which would have
Lancaster
expanded the powers of county service areas. We are working on a proposal to tighten up the county
Lee
service area provisions much as SB 773 does with landscaping and lighting districts. Counties may also
Lampert
attempt to revive their anti-taxpayers proposal from last year. We watch this closely.
Margolin
Assemblyman Sam Farr (D-Carmel) has introduced AB 826. As was the case with SR 42 (Hart),
Mays
which created the Senate Commission on Property Tax Equity and Revenue that was nothing more than
McClintock
th.
Moore
an attack on Prop. 13, this bill provides for a study of local government finance needs by a Joint
Commission on Property Tax Equity and Tax Revenue. We will keep a weather eye on this matter to
Mounjoy
Murray
assure that the composition of the commission and the charge of the commission are as fair as possible.
Nolan
HJTA is supporting SB 267 (Kopp). This measure seeks to exempt magazine sales from the sales
O'Connell
all
tax imposed on periodicals by the legislature last year. Industry representatives testified about the
Peace
negative effect of the taxes and the competitive disadvantage to which they are put relative to out
Palonco
of state publishers. The bill was ultimately amended to narrow the scope of the exemption only
Quackenbush
to subscriptions.
Roybal-Allard
HJTA also supports SB 177 (Deddeh), which would repeal the so-called "snack tax" on food items.
Seastrand
pr
We take the position that it is inappropriate to tax any of the necessities of life.
Sher
pc
As part of an extensive re-alignment of committee assignments, Senator Leroy Greene
Speler
(D-Sacramento) was named to replace Senator Wadie Deddeh as the chairman of the powerful and
Statham
very important Senate Revenue and Taxation Committee. Comments by Senator Greene and his
Tanner
voting record in recent years have shown a propensity to oppose Proposition 13 and support tax
Tucker
(In
increase proposals.
Umberg
With February 21 as the last day to introduce bills, we will undoubtedly be seeing more proposals
Vasconcellos
per
dealing with Proposition 13, assessment districts and many other subjects limited only by the very
Woodruff
elc
active imagination of legislators. It will be a very interesting year.
Wright
sup
Wyman
is
bei
Joi
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HEARINGS from Page /
efforts to persuade one candidate for
Regularly $14.00 (Limit I set Dates of Littleton's choice). Now Only $5.00
to Proposition 13. He declared his
governor to support Proposition 13 in
opinion that, based on the court's his-
1978. The candidate didn't think
Send coupon
Mr/Mrs/Ms
with payment to:
tory of upholding state tax policies
Proposition 13 was that important or
Littleton Coin Co.
Address
that are shown to be "reasonable,"
popular and asked what polls
Dept. LML240,
Littleton, NH 03561
City/State/Zip
the court would ultimately uphold
Mountjoy had seen. "The Bob's Big
Proposition 13.
Boy Poll," Mountjoy told him.
45 Day Money-Back Guarantee of Satisfaction
Reminding the audience it was
"What?" said the puzzled candidate.
lack of action by Sacramento that
"That's when you go into Bob's Big
FISCAL MONSTER, from Page 3
made Proposition 13 necessary in the
Boy to get one signature for Proposi-
silver bullet needed to destroy the
first place, Fox introduced the legis-
be revamped.
tion 13 and nine others volunteer,"
creature, it wouldn't hurt to also drive
lative session of the program. This
As with the monsters in the mov-
responded Mountjoy. Proposition 13
a stake through the fiend's heart. Ad-
included brief remarks from each of
ies, we can never be sure we've killed
went on to overwhelming victory
ditional remedies will be needed.
three representatives of the Legisla-
this creature. The spenders will con-
and the candidate, who failed to heed
California's large and powerful
ture, a Democrat, a Republican and
tinue to try and chop it out of the ice
Mountjoy's advice, lost.
congressional delegation must help
an Independent.
or sew it back together. But if we
Proposition 13 is still overwhelm-
restrict federal mandates SO that
Assemblyman Dick Mountjoy
don't do a credible job of dealing with
ingly popular, stated Mountjoy, and
California and other states can
(R-Arcadia), an original Proposition
the monster in Budget Crisis II, Part
if any portion is destroyed by the
manage their own problems. Over-
13 supporter, who was elected with
III may play to an empty hall, be-
court, it should be patched and "put
regulated, unproductive programs
the tax cutting measure, told of his
cause the audience to pay for it will
See HEARINGS, Page 9
such as workers' compensation must
simply have walked away.
MORE MAD TAXES
TAXPAYERS
HJTA TAKES ANOTHER SCHOOL
SELF-DEFENSE MANUAL
DISTRICT TO COURT
For those members who don't have one,
we still have copies of the "Howard Jarvis
As part of the ongoing effort to
a two-thirds vote of the people. The
Taxpayers Association Taxpayers Self-
Defense Manual."
wipe out the illegal use of assessment
TAXPAYERS
school districts are attempting to use
This useful 20 page booklet has tips
districts by schools, HJTA has filed
the authority of the 1972 Lighting and
SELF-DEFENSE
on how to fight taxes at the grass roots
suit against the Bonita Unified School
Landscaping Act, which allows as-
MANUAL
level, as well as answers to some of the
District in eastern Los Angeles
sessments, without a vote, for certain
most commonly asked questions about
County. The suit seeks to overtum a
services that directly benefit property.
state and local taxes.
maintenance assessment district
This use by schools of the 1972 law
While they last, the booklet is free
(MAD) for school facilities that was
has been called farfetched by its au-
to members who mail the coupon below
imposed last year by the district which
thor, then Assemblyman, now State
directly to:
serves the communities of San Dimas
Senator, Bob Beverly.
Booklet
and La Verne.
This is the third suit filed against a
c/o HJTA
In three causes of action, HJTA's
school district by HJTA since last
621 S. Westmoreland Ave., Ste. 202
suit charges the maintenance assess-
summer. After HJTA sued Orange
Los Angeles, CA 90005
ment district lacks statutory author-
Unified, the school board voted to re-
No phone calls please.
ity, violates the constitutional special
scind the illegal tax. Legal action
tax provisions of Proposition 13,
is still being pursued against the
NAME
and constitutes an illegal double prop-
Whittier Union High School District
ADDRESS
crty tax.
where property taxpayers are being
Proposition 13 permits local
billed for refurbishing the football
CITY AND ZIP
governments and special districts to
stadium. The Whittier and Bonita
PHONE
impose "special taxes," but only with
suits may be combined.
Photo Copy Preservation
TAXING TIMES
PAGE9
INTERVIEW WITH
LOS ANGELES COUNTY ASSESSOR
KENNETH P. HAHN
"The Man In The Middle"
As Los Angeles County Assessor, Kenneth Hahn is the man in the middle of the Proposition 13
battle. To attack Proposition 13, Los Angeles attorney Stephanie Nordlinger sued the county assessor's
office, making Hahn the defendant.
HOWARD JARVIS
In addition to his key role in the defense of Proposition 13, Hahn heads a department responsible
for the valuation of nearly 2.5 million taxable parcels in the nation's most populous county.
TAXPAYERS
The resulting property taxes will generate revenue of $4.2 billion during the coming fiscal year.
ASSOCIATION
Hahn brings a professional background to his current responsibilities. He joined the Office of
Assessor in 1980 and advanced to Appraiser Specialist. His work was so well regarded that he was
Los Angeles County Assessor Kenneth P. Hahn, defendant
appointed to develop solutions to some of the most complex appraisal problems encountered by
the department.
in the anti-Prop. 13 suit before the U.S. Supreme Court,
Hahn was elected Los Angeles County Assessor in November 1990 and, in the brief time since his
speaks at Dec. 14, HJTA meeting.
election, has established a reputation for hard work and professionalism.
Taxing Times: What are you doing
could create.
phone or in person, is taken care of
what should they expect?
to see that Proposition 13 gets the
But it's something I have to think
by one person and one office. For
best possible defense before the U.S.
about and plan for. That's my job
example, certain taxpayer questions
Hahn: The same thing anyone should
Supreme Court?
and it's what taxpayers expect and
involve coordinating or receiving in-
expect when calling any professional
should receive from me. Obviously,
formation not only from the
service organization: prompt, courte-
Hahn: We have enlisted the services
the extent of disturbance would largely
Assessor's office, but from the of-
ous, accurate, and responsive action!
and support of the three most quali-
depend on which key elements of
fices of the Treasurer-Tax Collector
fied groups to defend our position.
Prop. 13 were thrown out, what would
and the Auditor-Controller as well.
Taxing Times: What would you like
Working alongside our top county
replace them, and the period of time
Why should we shuttle people back
to accomplish during your tenure
counsel attorneys are Joel Fox and
allotted for implementation of any
and forth on the phone or by foot to
as Assessor?
the Howard Jarvis Taxpayers Asso-
changes. If a new property tax sys-
these various offices when we have
ciation legal staff, and the nationally
tem were introduced, we would have
the ability to obtain this information
Hahn: I would like to be able to
recognized law firm of Sidley and
to undertake a massive re-training of
for the taxpayer in any of the regional
say that I, and the taxpayers of Los
Austin. On the Sidley and Austin
personnel and re-programming of our
branches or our main County office?
Angeles County, won in the
team is former California Governor
current systems and procedures.
This program not only fills a much
Nordlinger case. But in the event that
George Deukmejian and former U.S.
There would be the additional burden
needed gap in our previous operation,
Prop. 13 is overturned, I would like
Solicitor General Rex Lee. I think
of informing and educating the public
but creates an awful lot of taxpayer
to be instrumental in drafting and
it's significant to note, here, that Mr.
about these changes.
goodwill as well.
implementing the most fair and equi-
Lee has successfully won over 70%
We are not burying our heads and
Additionally, our regional offices
table assessment system for
of the 55 cases he has argued before
waiting for the axe to fall. We're
are now able to provide substitute tax
homeowners and businesses alike.
the Supreme Court, and, he will be
feverishly drafting provisions to deal
bills, eliminating the need for people
Years ago the Los Angeles
presenting oral arguments to the court
with any number of possibilities which
to make the trip to downtown, Los
County Assessor's office was a na-
on February 25.
might affect our current system, but,
Angeles. And, thirdly, we have made'
tional model for professionalism and
:quite/honestly-ourhope and our legal
a big dent-in tackling our backlog of
knowledge. Once again we are headed
Taxing Times: If, in spite of the
argument is that we will not have to
technical processing.
in the right direction and I want to
best efforts by your office and HJTA,
use them.
There- are a lot more admin-
leave a legacy of service and knowl-
key clements of Proposition 13 are
istrative, educational, and training
edgeable personnel to the taxpayers
thrown out by the court, we know it
Taxing Times: Since your election,
improvements we've made and con-
of Los Angeles County.
would be a disaster for taxpayers, but
what have you done to improve the
tinue to make, but I think the three
There are many smaller goals I
tell us how would it affect the opera-
level of service your office provides?
issues I've just mentioned are ones
would like to achieve for my office
tion of your office?
which directly and immediately
but the bottom line is that they all add
Hahn: We have implemented a quick,
affect the taxpayers.
up to my ultimate objective, and that
Hahn: It gives me nightmares to
easy, and effective one-stop public
is, to make the assessment process as
even think about the endless possi-
service concept. How that works is
Taxing Times: If a member of the
fair and efficient as we can make it.
bilities of disruption and upheaval it
that any taxpayer inquiry, whether by
public calls your office for assistance,
HEARINGS, from Page 7
personal support for the measure,
erty tax entirely. "Why must we keep
in any consideration of changes to
right back on the ballot."
he believes the Supreme Court will
paying and paying," she asked. Fox
Proposition 13.
To an audience that included
overtum Proposition 13.
responded that he had written on the
Other HJTA members asked if the
many who had worked side-by-side
If he is correct, Kopp told his
subject and saw society moving gradu-
legislators had given consideration to
with Howard and Estelle Jarvis in
stunned audience, we must begin
ally in this direction. But he added,
what would happen to seniors and
1978, State Senator Art Torres
thinking about what will replace
taking into consideration the current
those on fixed incomes if Proposition
(D-Los Angeles) candidly confessed
Proposition 13. He added he has
political climate in California, it was
13 were thrown out. Sen. Torres,
that he had not been with them. But
been giving this matter a great deal
not realistic to see this happening in
agreed that protecting senior
Torres added his experience since then
of study and he encouraged others to
the near future.
homeowners was very important. He
has shown him that Proposition 13 is
do the same.
An apartment building owner
added, however, it was also impor-
vital to protecting property owners and
During the last 45 minutes of the
expressed concern over support by
tant to look at this fight as one to
all California taxpayers.
program the legislators, along with
some in the public sector for taxing
protect. all taxpayers. He warned
If Proposition 13 is overturned,
Fox and Coupal, took questions from
business at a higher rate than
against weakening the Proposition 13
Torres declared he will work for a
HJTA members.
homeowners. He spoke of the need
movement by breaking into factions
replacement that will restore taxpayer
One member wanted to know
to protect renters, pointing out that if
and he encouraged all taxpayers to
protections. He said if the worst hap-
what would happen if, as some
apartments were taxed at a higher rate,
continue to work together.
pens, Proposition 13 supporters must
experts believe, the high court in over-
most of these costs would ultimately
Fox promised HJTA will come
"flood the Capitol" demanding action
turning Proposition 13 requires
be borne by tenants.
right back with a new initiative to
from state representatives.
retroactive repayment of property
Sen. Kopp expressed agreement
protect taxpayers if Proposition 13
State Senator Quentin Kopp
taxes. The legislators agreed this
that renters must be an important part
is overturned.
(Ind.-San Francisco), was a county su-
would be a disaster and expressed
pervisor in 1978 and one of the few
support for legislation that would
elected officials in the entire state who
prevent this from happening.
TURN PAGE
supported Proposition 13. Kopp, who
A woman declared that property
is also an attorney, told HJTA mem-
taxation was an outmoded concept
FOR PHOTOS OF PROP. 13 HEARINGS
bers he regretted disagreeing with
and asked if consideration had been
Jonathan Coupal. In spite of his own
given to doing away with the prop-
Photo Copy Preservation
PAGE 10
TAXING TIMES
HJTA PROP. 13 HEARING
PHOTOS BY JOHN BARR
Howard arvis
Taxpayers Association
HOWARD JARVIS
TAXPAYERS
ASSOCIATION
Gayle Wilson, Estelle Jarvis and Joel Fox listen as Gov. Wilson pledges
to defend Proposition 13 and outlines his Taxpayer Protection Act for
HJTA members.
HOWARD JARVIS
TAXPAYERS
HJTA attorney Jonathan Coupal reviews arguments in the Proposition 13
case before the U.S. Supreme Court. Coupal believes Proposition 13 will
State Senator Quentin Kopp, a Proposition 13 supporter, is concerned
be upheld.
Proposition 13 will be overturned. He says taxpayers must be ready to
support alternatives.
State Senator Art Torres urges taxpayers to work together to preserve
Proposition 13.
Photo Copy Preservation
TAXING TIMES
PAGE 11
LOS ANGELES, CA, DEC. 14. 1991
Taxpayers Asso
HOWARD JARVIS
TAXPAYERS
ASSOCIATION
HJTA members line up to ask questions and make suggestions.
Estelle Jarvis and Joel Fox thank Gov. Wilson for his remarks.
Assemblyman Dick Mountjoy, who campaigned for Prop. 13 in 1978, tells a
questioner that if the court overturns Prop. 13, it should be patched and put
on the ballot again.
y
HJTA president Joel Fox greets HJTA members.
HJTA Executive Director Kris Vosburgh makes note of ideas presented
by taxpayers.
PAGE 12
TAXING TIMES
TAXPAYERS, from Page /
"Welfare dependency has grown
which increases are automatic, regard-
*Maximum Family Grant-grants
at a frightening rate in California,
less of the state's financial condition.
will not be increased for additional
TAX BYTES
frightening not just fo taxpayers, but
*Residency Requirement for
children born to a mother who is al-
frightening for the thousands of
the first 12 months, after arriving in
ready receiving welfare.
recipients who have been trapped and
California, families that apply for wel-
*School Incentive teenage par-
SET FOR LIFE
warehoused by the welfare system,"
fare will receive grants no larger than
ents will get $50 extra if they stay
Former State Senator Alan
Wilson said.
they received, or would have received,
in school, but will be cut $50 if they
Robbins, who will spend five
California's welfare system is now
in the state they moved from.
drop out.
years in prison for extortion and
growing almost 12 percent a year
* Making Welfare Transitional-
Wilson said welfare must be made
tax evasion, will continue to
four times faster than the rate of popu-
sets up a two-tier grant structure. For
what it should be for those capable
receive a generous pension
lation growth.
the first six months, families requiring
of working transitional support
equal to almost two-thirds of his
To transform the welfare system,
immediate financial support will
rather than indefinite maintenance
official salary, for life.
the Taxpayers Protection Act includes
The
receive the full grant level.
and dependency.
the following reforms:
After six months, families with an
HJTA was the first group to back
*Annual Grant Levels - grants
A DUBIOUS HONOR
able-bodied adult will shift to a basic
the governor's plan when it was an-
will be determined by the state's
grant, which is 15 percent below the
nounced. (For more on welfare reform
In 1990, California ranked ninth
ability to pay for the costs, based on
transitional level. (The full grant level
see "The Facts Line Up On Wilson's
in per capita tax burden. Ac-
revenues and caseload growth. This
will continue for families in which the
Side" on this page.)
cording to the Tax Foundation,
will replace the current system under
adult is disabled or too old to work.)
California's 1991 tax increases
represent a per capita increase
of $220, and our state now ranks
This column appeared in the Dec. 15 Los Angeles Times
fifth. (The Tax Foundation is a
The Facts Line Up on Wilson's Side
non-profit, non-partisan re-
search organization based in
by Joel Fox
Washington .C.)
It is difficult to fly an uncon-
many of us who opposed the size of
general fund. At current growth rates
MORE FROM THE
ventional political idea through the
those tax increases predicted, it led to
these services will demand more than
TAX FOUNDATION
partisan flak that is quickly sent up to
an even larger economic crisis. State
100-percent of the state general fund
shoot it down.
The Tax Foundation estimates
Controller Gray Davis noted that last
by the turn of the century causing a
Governor Pete Wilson has been
year's tax collection was lower than
the typical American family has
predicted $20-billion deficit. While
labeled a "David Duke" and the
the previous year's collection for the
lost $695 in the past four years
education spending must be reformed,
"dictator" of California because
first time since the Depression, and
to accelerating federal taxes
too, education provides a long term
of the welfare-reform package he
and inflation.
five months into this new fiscal year
solution to our problems and should
has introduced.
we are doing worse than last year.
be nurtured.
Yet, the idea must be judged on
New taxes have accelerated the flight
AND THINGS
The welfare budget, particularly
its merits. And the facts are on the
of business, jobs and taxpayers from
COULD GET WORSE
Gayle
Aid to Families with Dependent
governor's side.
the tarnished Golden State.
Children, has been escalating at a
If the members of the State
With the boldness of a fictional
While some of our problems are
tremendous rate. Over a ten year
Senate Revenue and Taxation
Daniel Webster who settled the case
tied to the nation-wide recession, there
period it has increased twice as fast
of a man's soul with the devil before
Committee get their way,
are reforms that have to be made to
(9.4%) as real family income (5.1%).
Californians will face a $62
a jury of the devil's own, Wilson has
our budgetary process. Since we failed
AFDC caseload is projected to grow
billion tax increase, an amount
the facts to stand before welfare
to tax ourselves out of financial dis-
at a rate four times the rate of state
greater than the entire state
recipients and make the case that his
aster, we must come to grips with the
population growth over a four year
budget, By a vote of 5-2 the
reforms are necessary to protect the
spending side of the budget, and
period which began in 1989.
committee approved SB 36
bill
system which produces the largest for
Wilson's plan recognizes that.
California taxpayers have been
(Petris) to create a massive
those in need.
can't
The Department of Finance has
generous in providing AFDC benefits.
health care program to be
told
The facts are simple. California,
compiled trends which indicate that
California payments rank fourth in the
financed by a hefty payroll tax
embe
on its current course, is going broke.
the number of tax receivers in
United States and first of the ten most
and in-come tax increases. The
Following last year's record-breaking
California are growing faster than
populous states. Even if the cuts
mammoth program has been
mark
budget deficit, the state faces another
the number of taxpayers. The Depart-
proposed by Wilson are enacted,
labeled unfeasible by the State
deficit of undetermined billions.
is tak
ment predicted that with the projected
California AFDC payments will still
Department of Finance.
When faced with these shortfalls,
ing
growth of welfare recipients, school
be higher than all other big states.
Califi
Wilson and the Legislature first tried
and higher education students, pris-
It is clear that California taxpay-
YOU PAY,
to relieve the problem largely by
oners, and non-welfare Medi-Cal
spen
ers are doing more than their share in
raising taxes. The state levied a
THEY STAY?
catio
cases, by the year 2000 we will have
shouldering the welfare commitments
staggering $7-billion tax increase on
eight-tenths of one taxpayer for each
Sacramento lawmakers are
prog
of this country. While California
differ
its citizens, enough to account for an
tax recipient.
contains 12% of the nation's pop-
reported working on a ballot
additional $220 per Californian.
for
So-called entitlement programs,
ulation, it pays 26% of the nation's
proposition which would have
I
But, this formula for bringing
education and health and welfare, take
AFDC costs.
taxpayers footing the bill for
California into the black failed. As
meml
77-cents out of every dollar from the
The governor's initiative includes
political campaigns and extend
initial
incentives to break dependency on
term limits established when vot-
state
welfare by allowing welfare recipi-
ers approved Proposition 140,
budge
ents to work without losing benefits
N
and by offering cash incentives for
Compiled by HJTA Executive
Director Kris Vosburgh
Prote
teenage mothers to finish high school.
Opponents of welfare cuts have
suggested that more revenue be
taken from business. But business in
term. Other cuts must be considered,
California has been taxed to a point
including those offered up last year
Joel
where one in four companies in a re-
by members of the governor's politi-
HOWARD JARVIS TAXPAYERS ASSAL
cent Business Roundtable survey
cal caucus, most notably Assembly-
Public
is considering leaving the state.
man Tom McClintock (R-Thousand
Asso
Business is the vehicle to get us out
Oaks), which were considered drastic
Move
of the doldrums and supply the jobs
at the time.
Meml
that most welfare recipients want.
The facts before the jury are clear.
Business will be the backbone of
For the good of all California, to keep
HEA
621 S
a recovery.
the system working so we can con-
Los A
The governor's welfare proposal
Joel Fox commented on the governor's welfare proposal on CBS News with
tinue to take care of those in need of
Dan Rather and on the "Today Show."
will not go far enough to balance the
temporary help, the governor's plan
budget, either in short range or long
must prevail.
Welfare
story below
and commentary
WelFare
on back page
Photo Copy Preservation
"California's Organization of Tax Fighters"
$Taxing Times
SPECIAL SUPREME COURT EDITION
The Official Educational Newsletter of the Howard Jarvis Taxpayers Association
Howard Jarvis, Founder
March 1992
PROP. 13 JUDGEMENT DAY
HIGH COURT
Michael Geissinger for Taxing Times
HEARS ORAL
ARGUMENTS
WASHINGTON, D.C. - On
February 25, at ten in the morning,
Proposition 13 faced its ultimate
challenge when the U.S. Supreme
Court heard oral arguments in the
case of Nordlinger vs. Hahn.
Present with Joel Fox was the
HJTA legal team including Trevor
Grimm, Jonathan Coupal and
nationally recognized tax policy
expert Jay Curtis. Curtis was hired
by HJTA specifically to assist Los
Angeles county in preparing the
defense for Proposition 13.
The one hour of oral arguments
(Continued on page 2)
TaxingTimes
Published quarterly by the Howard Jarvis Taxpayers
Association (HJTA) and the American Tax Reduction
Movement (ATRM). Kris Vosburgh. Editor.
Members of HJTA and ATRM enjoy dual membership.
HEADQUARTERS
HJTA president Joel Fox, Los Angeles County Assessor Kenneth P. Hahn and HJTA General
621 S. Westmoreland Ave., Suite 202
Counsel Trevor Grimm leave the Supreme Court on the way to microphones accompanied
Los Angeles, CA 90005-3971
by reporters from major newspapers including the San Francisco Chronicle and
Los Angeles Times.
Page 2
Michael Geissinger for Taxing Times
Joel Fox discusses Proposition 13's prospects with the press on the steps of the Supreme Court. To the left of Joel stands U.S. Senator John
Seymour, to the right is Assessor Hahn and HJTA attorney Trevor Grimm.
(Continued from page 1)
judges state laws on whether or
ing Antonin Scalia and Sandra Day
was divided between Carlyle Hall,
not they are based on a rational
O'Conner, appeared skeptical. "It
attorney for Los Angeles resident
policy.
seems to have solved the problem
Stephanie Nordlinger, and former
Hall opened his attack on Propo-
that people can't keep up with
U.S. Solicitor General Rex Lee,
sition 13 by charging that
(taxes on) unrealized gains in their
who defended Proposition 13.
California's property tax system
homes," Scalia said and then drew
The Nordlinger challenge is
violates the constitutional guaran-
a laugh when he said Proposition
based on the equal protection
tee of equal protection. "There's
13 seems "close enough for
guarantees of the 14th Amendment
nothing to justify why one
government work."
of the U.S. Constitution. Nord-
group should pay higher amounts
'Conner asked, "Do you think
linger says Proposition 13 is un-
than the favored group," he said.
that the California scheme can
constitutional because taxes are
Nordlinger, who bought her home
rationally be related to the problem
based on the value of property at
in 1988, claims it is "outrageous"
of people on fixed incomes being
the time it is purchased. This
that she pays more than her neigh-
taxed out of their homes?" Hall
means it is possible for two iden-
bors who have owned their homes
responded that the tax system is
tical properties to be taxed dif-
much longer. Because of these
irrational because it is not related
ferently because of when they
differences, Hall described Propo-
to ability to pay, that it benefits
were purchased and the price
sition 13 as "irrational."
the rich.
paid. However, the court usually
Several of the justices, includ-
(Continued on page 3)
Page 3
Michael Geissinger for Taxing Times
rebuttal. Lee argued Proposition
has never been an assumption that
13 is completely fair because it
there has to be a one-to-one match-
replaces a property tax system
ing of benefits to what one pays.
based on current market value with
When Lee emphasized the value
one based on the value of property
of Proposition 13 in protecting
when it is acquired. "The only
homeowners from being taxed out
question," said Lee, "is whether
of their homes by the effects of
California's acquisition value
inflation, Stevens added, "Of
assessment system furthers some
course there's another solution for
legitimate State purpose (to help
some of these elderly people who
people keep their homes), and
have suddenly found their $10,000
clearly it does."
homes are worth a million dollars.
Justice Anthony Kennedy asked
Some of them can sell those homes
about exceptions to the acquisition
and still live, you know."
value system, saying "the hodge-
To buttress his arguments in
podge created by these exceptions
defense of Proposition 13, Lee
strongly undercuts the acquisition
(Continued on page 4)
Richard Gann, son of Proposition 13's
value theory."
coauthor, and Joel Fox confer after Supreme
Court hearing.
Lee responded that
Michael Geissinger for Taxing Times
there were only two
(Continued from page 2)
exceptions and these
Hall tried to compare Nord-
were not at issue in this
linger's taxes with those on a
case. (In fact, the ex-
Beverly Hills mansion, but was
ceptions were not in-
interrupted by Justice David Souter.
cluded in Proposition
"I didn't ask you about Beverly
13 but were added
Hills mansions," he said, "I asked
when voters approved
you for the kind of person in the
new initiatives to al-
middle we're trying to find a stan-
low parents to pass on
dard tax payer here, at least a peg
property to their chil-
to judge rationality."
dren, and older resi-
Hall urged the justices to view
dents to sell existing
Proposition 13 as they had the West
homes to buy retire-
Virginia case in which the court
ment homes of equal
overturned a county tax system for
value without a tax in-
violating equal protection.
crease.)
In spite of what appeared to
Justice John Paul
be some favorable questions for
Stevens commented
Proposition 13, experienced court
"there's something
observers warn against reading too
counter intuitive"
much into justices' comments. It
about a system where
is just as likely that justices are
people pay much more
testing a theory as offering an opin-
than neighbors who
ion.
receive the same police
Rex Lee also faced some tough
and fire protection.
Joel Fox and HJTA attorneys Jonathan Coupal and Trevor
Grimm evaluate the justices' responses to oral arguments on,
questioning during his half-hour of
Lee pointed out that it
Proposition 13.
Page 4
Supreme Court Historical Society
Justices of the United States Supreme Court. Back row, left to right: Souter, Scalia, Kennedy, Thomas. Front row, left to right: Stevens, White,
Rehnquist, Blackmun, O'Conner.
(Continued from page 3)
their homes) in a responsible way.
unprepared in the event of an ad-
referred to briefs submitted by the
The answer to that question is yes,
verse court decision."
Howard Jarvis Taxpayers Associa-
and the judgement of the lower
HJTA attorney Jonathan Coupal
tion and Paul Gann's Citizens
court (in favor of Proposition 13)
commented, "Having argued doz-
Committee. "I invite the Court to
should be affirmed."
ens of cases before appellate courts,
read the pages of the Gann/Jarvis
Immediately following the
I am a firm believer in Murphy's
briefs," he said.
hearing, HJTA president Joel Fox
law. I have seen many cases in
Lee told the justices that if the
met with the press and Proposition
which the justices have indicated
equal protection argument were
13 supporters. Fox described his
they would rule one way, only to
used to overturn Proposition 13,
reaction as one of "cautious opti-
later rule exactly the opposite way.
"It's going to make Sherman's
mism," because the justices showed
This case still could go either way
march though Georgia look like a
a good grasp of the issues at hand.
and we must continue to prepare
Sunday picnic," because similar
However, he said HJTA should take
for the worst."
anomalies abound throughout
nothing for granted and taxpayers
Court observers expect it will
federal and state tax laws.
must be prepared to move forward
be at least six weeks after the date
Countering Hall's argument of
with a new initiative if the high
of the hearing before the decision
irrationality, Lee concluded by say-
court rules against Proposition 13.
is announced and it could as late as
ing the question is "did they deal
"Proposition 13's opponents would
this summer.
with it (people being taxed out of
like nothing better than to find us
CEL
Choice-in-Education League
ID 910 439
Co-Chairs
1041 Rutland Avenue, Los Angeles, CA 90042 - (213) 257-1827
Joseph F. Alibrandi
Whittaker Corporation, CEO
Everett E. Berg
EBCO Enterprises, President
Ron L. Cedillos
Cedillos Testing Co., President
The Parental Choice In Education Initiative
Richard J. Dennis
Chicago Resource Center, CEO
William T. Huston
Watson Land Co., CEO
AN AMENDMENT TO THE CONSTITUTION OF THE
Vice-Chair
STATE OF CALIFORNIA
Kevin D. Teasley
President,
Campaign Counsel
David J. Harmer
Treasurer
Empowers parents to choose any qualified
David Barulich
K-12 public or private school for their children's
Board of Directors
J.G. "Mike" Ford, Jr.
education.
Don Frik Franzen
Stephen Guffanti, M.D.
Manuel S. Klausner
Andrew D. Paterson
Provides every resident school-age child a
Shawn Steel
scholarship worth at least 50 percent of present
Advisory Board
William J. Bennett
state and local educational expenditures per child
Former U.S. Secretary of Education
John E. Chubb
(now approximately $5,200 annually).
Senior Fellow
Brookings Institute
Seymour Fliegel
School Superintendent, Retired
Requires the Legislature to establish a process for
Harlem District 4
Milton Friedman
public schools to voluntarily become independent
Nobel Laurcate
scholarship-redeeming public schools.
John Taylor Gatto
Teacher of the Year
State of New York
Dr. Eugene Gonzalez
Includes savings from implementation in
Society of Hispanic Professional
Engineers Foundation
currently-mandated educational spending
Guilbert C. Hentschke
Dean, USC School of Education
requirements.
Alan L. Keyes
President, Citizens Against
Government Waste
J. Clayburn La Force
Permits students whose scholarship amount
Dean, Anderston Graduate
School of Management, U.C.L.A
exceeds the cost of the participating schools to
Terry Moc, Ph.D.
Professor, Stanford University
use the surplus for higher education.
John P. Singleton
Chairman, Workforce L.A
John V. Tunney
Authorizes statewide tests to measure academic
Former U.S. Senator
State of California
Annette "Polly" Williams
improvement and overall school performance.
Legislator/Choice Pioneer
State of Wisconsin
Beverly J. Williams
Limits new regulation of private schools and
Associate Director
Family Help Line
scholarship-redeeming public schools.
Finance Director
Shawn Steel
Shawn Steel & Associates
Campaign Consultant
Gary Huckaby
Huckaby Rodriguez Inc.
QUESTIONS & ANSWERS
Q1: What does your initiative do?
A1: The Parental Choice in Education initiative does several important things:
It will save the public education system from itself. It will be a catalyst to restore
quality education in California. Ultimately, every education dollar will buy more
effectiveness with less waste. It will give parents the power and ability to seek the best
education available for their child.
It's an idea whose time has come. A statewide poll late last year showed that California
voters support school choice including choice of public, private and religious schools
68.9 percent to 28.5 percent. Ten states enacted school choice in 1991, seven in 1990.
legislatures. Thirty-seven states, including California, have school choice bills pending in their
First and foremost, the Parental Choice In Education initiative gives parents the freedom
will be empowered to choose a school public or private that shows it knows how to
and right to choose the school their child will attend. For the first time in this state, parents
deliver results.
Our initiative will take away the power of the educational bureaucracy to dictate where a
-- the parents.
child must go to school. It gives that decision to those who know what's best for each child
It creates open enrollment in the public schools. Once neighborhood children are enrolled,
any child may be enrolled in a school on a first come, first served basis.
It empowers teachers and parents to take over a public school and gives them the funds to
operate that school in much the same way as a private school, free from bureaucracy and
free to do what most teachers do best: teach. Teachers and parents, not bureaucrats, will
size fits all" education mandated from Sacramento.
create the curriculum best suited to the children of that specific neighborhood, not the "one
private school.
The initiative also gives parents the power and the funds to enroll their child in a qualified
next flood five years just to handle the 200,000 additional children which the experts predict will
That's tremendously important now that we must build one new school every day for the
expensive new schools at a time California simply can't afford the cost.
the schools every year for the next ten years. That means we will need nearly 2,000
of California taxpayers.
The Parental Choice in Education initiative will take a big part of that burden off the backs
what is best for their child.
And I have yet to hear one good reason why parents should not have the right to choose
voters of this state agree that it is long overdue.
That's what the Parental Choice in Education initiative does and we're convinced that the
1
JAN 30 '92 17:13
916 483 4995 PAGE. 002
QUESTIONS & ANSWERS
Q2: How does the funding work? What is this "scholarship?"
A2: The scholarship is half of what the state now spends on the average for a child's
education. The state now spends $5,200. The scholarship is $2,600. It will be sent by
the state to the child's parents in care of the qualified school- independent public
school or private school- in which the parents have chosen to enroll their child. The
child who enrolls in another public school anywhere in or outside his or her district
will continue to get the full $5,200. Funds for special needs will follow the child to the
chosen school, public or private.
Right now, the state is spending 27 plus billion dollars to educate the five million plus
Director of Finance, that's an average cost of $5,242 to educate one child.
children in the public schools, grades kindergarten through twelve. According to the State
The initiative provides that if your child goes to another public school in some other
neighborhood, the full amount will be spent on his or her education. If there are funds for
special needs added in, that money follows the child. No change.
The School Choice initiative provides a scholarship at a minimum of half that amount - - or
redeeming, school. qualified private school or an independent, scholarship-redeeming public
$2600 to each child whose parents choose to enroll him or her in a scholarship-
That causes something financially interesting to happen.
stays behind in the public school system.
takes half, or $2600, with him or her to the new scholarship school - and half, or $2600,
It creates a savings for the public schools. Every child who migrates from a public school
In theory, the half that remains behind in the public school system can be used to increase
move takes place.
spending for students remaining in the public schools during the fiscal year in which the
escaping a marginal or even bad school; the public schools benefit because they will have by a
So, if student movement does take place because parents so choose, the child benefits
added savings to improve classroom resources -- and increased flexibility to handle the flood of
this-state. students expected over the next ten years which will also benefit the taxpayers of
But the fundamental benefit is that parents- not the bureaucracy - will call the
accountable to parents and teachers.
Their decisions will make the public school monopoly compete for students and shots. thus more
over bureaucrats and teacher; that employs 127 non-teacher personnel for every 100 that
priorities child that are now upside down in an educational system that favors the bureaucracy
Over time, parental choice will cause a long overdue change in educational priorities -
reductions layoffs of teachers, not administrators when the budget gets tight; that implements
pays one and a half to two times what it pays teachers; that causes teachers; massive
in classes and textbooks, not cuts in overhead fat.
2
JAN 30 '92 17:14
916 483 4995 PAGE. 003
QUESTIONS & ANSWERS
Q3: Your critics say that every child that leaves the public schools will cost them $10,000.
A3: That's a new math cooked up by the critics. Notice that they haven't produced studies
to back up that calculation. We have done our homework- in writing. School choice
will dollars. produce savings to the state. The Legislative Analyst says maybe over a billion
First, the critics cannot get around the fact that under school choice, many children will be
arguably better educated at half the cost to taxpayers -- $2600 as opposed to $5200.
Second, absolutely necessary new schools to cope with exploding student growth will be
built with private sector -- not public sector - dollars.
Let me exaggerate to make the point. Let's say all five million children -- except one
migrate to scholarship schools. By leaving half the money behind, half of the entire state
budget would be left behind. That means there would be thirteen-and-a-half billion dollars
in the public school budget to spend on that one remaining child.
Q4: Isn't school choice really a subsidy for the wealthy?
A4: The real fact is that only the wealthy have a choice today. Some middle class parents
making big sacrifices have made a choice. A tiny handful of poor kids are fortunate
enough to be enrolled in subsidized private education - which is some kind of choice.
But the real tragedy is that the vast majority of the middle class and 99.99 percent of
the poor have no choice at all no way of escaping really poor, really bad schools.
Talk to a concerned poor parent. They'll tell you that their pleas to transfer their child to a
better public school are routinely ignored or refused by the bureaucrats.
It's worth noting that many public school teachers are working to keep their children in
private schools - nearly a third in the Los Angeles Unified School District alone.
State Schools Superintendent Bill Honig had a choice. He moved his child out of San
Francisco public schools to a more affluent bay area public school. School choice critic
Jesse Jackson chose private schools for his children.
School choice will give all parents the choice that only Superintendent Honig, Jesse
Jackson and other wealthy people enjoy today.
Q5: Critics say that parents don't know how to make these choices.
A5: That statement is offensive and denigrating. Most teachers can tell you that it's
simply not true. It is a typical example of the arrogant, patronizing attitude of the
mentality. educational establishment. Some say that in many cases it's a vestige of a plantation
schools for their children.
If parents can vote in elections, they certainly have the right - and the brains -- to choose
3
JAN 30 '92 17:15
916 483 4995 PAGE. 004
QUESTIONS & ANSWERS
Rich parents have choices. Why shouldn't all other parents have the same right?
could Even in the poorest of neighborhoods, parents know they have bad schools -- and if they
figure a way out, they would take it. School choice will give them that escape.
So far, the critics are exclusively representatives of the self-serving educational
being held accountable for results.
establishment. The bureaucrats can't stand the notion of giving up power over parents or
Q6: How can school choice do that?
A6: School choice will work first - and best -- where the schools are worst. That has been
parents and teachers can deliver quality education.
proven elsewhere in the nation - in Milwaukee and Harlem. Given the opportunity,
school. At the elementary school, only $1800 is available after the bureaucracy takes its
Look. Less than half of the $5200 appropriated for each child actually gets down to the
bite; maybe $3200 left over at the high school level.
profit. the market exists, where schools are failing. Some will be non-profit, some for-
where That $2600 scholarship will create a vast new array of educational offerings, particularly
You'll see schools that specialize in rescuing the problem student -- the so-called "throw-
the public schools today.
see schools for the disabled and the handicapped, for kids whose needs are not well met in
away" child. Those schools exist today -- and they're producing remarkable results. You'll
that You'll see schools that focus intensely on the needs of children who can't speak English and
talent in math and science, art, music - the specialized education for kids who are not
will give them the tools they need to learn. There will be schools for children with
being challenged in our "one size fits all" curriculum today.
4
JAN 30 '92 17:15
916 483 4995 PAGE.005
HOW WILL PARENTAL CHOICE IN EDUCATION
INITIATIVE AFFECT PROP. 98?
Proposition 98 is incorporated in Sections 8 and 8.5 of Article XVI
of the California Constitution. A rough summary of Prop. 98 is
that excepting fiscal emergency situations, spending on public
schools and community colleges must be no less than the greater of
the following two tests:
1. the percentage of State General Fund revenues spent on public
schools and community colleges in fiscal year 1986-87, which
was about 42%
2. the per capita spending on students adjusted for inflation
cannot fall below the level from the prior fiscal year
Therefore, at least 42% of the state's budget will be spent on
public education to satisfy test 1, even if enrollment were to
plummet; however, if enrollment increased, then more than 42% will
be spent in order to satisfy test 2.
Our initiative does three things to impact Prop. 98:
1. expenditures for scholarships shall be counted toward the
"spending on public schools and community colleges" used in
the Prop. 98 calculations for both conditions.
2.
enrollment in scholarship schools will not be counted for
purposes of the second condition of Prop. 98.
3.
"savings" accruing to the state from the movement of public
and private school students into scholarship schools will be
counted as if it were an expenditure for measurement purposes
of Prop. 98.
The result of these three measures will be that it is possible that
if enough students leave public schools to enroll in scholarship
schools, the Legislature could spend less than 42% of General Fund
Revenues on public education. However, real per capita spending on
public school students required by Prop. 98 would not be affected.
public schools to be increased!
In fact, we free up more funds to permit per capita spending in
For example if 2.5 million students attend scholarship schools
$2,500/yr/student cost and 2.5 million students attend public at
schools following: at $5,000/yr/student cost, then we would have the
1. Total spending on scholarship and public schools would be:
bil. for a $18.75 bil. total expenditure.
2,500 X 2,500,000 = 6.25 bil. plus 5,000 X 2,5000,000 = 12.5
2.
3.
"Savings" would be (5,000 - 2,500) X 2,500,000 = 6.25 bil.
Total expenditures for purposes of measuring Prop. 98
4.
compliance for test #1 would be 18.75 + 6.25 bil. = 25 bil.
at $6.25 billion savings would be "freed" up which could be
capita spending on public school students!
the discretion of the Logislature to increase the spent per
JAN 30 '92 17:16
916 483 4995 PAGE.006
SUMMARY
Bill Honig and our other opponents are trying to confuse people
about the distinction between the total dollars spend in public
schools and the per student expenditures in public schools.
If enough students leave public schools, then it is likely that the
total dollars spent in the public school system will decline.
However, our initiative does not affect the Prop. 98 guarantees
that the per student expenditures cannot fall.
So our opposition cannot honestly argue that our initiative would
affect the per student expenditures in public schools. That
protection will remain for public school students. They have been
telling the Legislative and Finance Department analysts reviewing
the initiative for its fiscal impact that:
few students will leave public schools to attend scholarship
schools because $2,500 is not enough to pay tuition at private
schools.
only existing private school students will be using the $2,500
to pay tuition
Therefore, they claim that the state will on net have to increase
its total expenditures to pay for private school students. There
are serious problems with these two claims:
it ignores the empirical fact that many parochial schools
charge less than 500/year tuition
parents can supplement the scholarship with their own funds to
pay for any differences
the Legislature can always set the scholarship at a higher
dollar amount (as it must if per student expenditures at
public schools increase).
no private schools would convert to or be created as a
scholarship schools and be subjected to additional
requirements in our initiative unless they could attract new
customers by becoming a scholarship school
public school students outnumber private school students by
over a 10:1 margin so it is hard to believe that a large
fraction of the families with 90% of the students in the state
would not also be attracted to attend private schools if they
were scholarship. able to defray their expenses with a minimum $2,500
As long as the number of public school students who leave public
schools (and they will have a two-year head start on their private
school counterparts) exceeds the number from private schools who 80
money. to scholarship schools, then this initiative will save taxpayers
JAN 30 '92 17:17
916 483 4995 PAGE.007
CALIFORNIA CATHOLIC SCHOOL SUPERINTENDENTS
The Current Parental Choice In Education Amendment
and
California Catholic Schools
Currently California voters are being asked to sign petitions which seek to place on the
November 1992 ballot a state constitutional amendment known as The Parental Choice
in Education Amendment. Opponents of this educational voucher amendment, in seeking
to discourage the voter signature process, have raised questions about standards and
practices in California private schools. Because California Catholic schools serve nearly
half of the state's nonpublic school population, we find it incumbent to respond to some
of the contentions which are being circulated by the California Teachers Association.
At the November 1991 public meeting of the State Board of Education and in subsequent
publications of the California Teachers Association, Mr. Del Weber, C.T.A. President,
claimed that there are "no requirements for schools to be accredited." While there is no
statute which mandates accreditation for either public or private schools, voluntarily
California Catholic K-12 schools long have been accredited by the Western Association
of Schools and Colleges which has advised that relatively few public elementary schools
hold accreditation.
For private schools, Mr. Weber stated that there are "no background checks on teachers
for felony convictions including child molestations." Pursuart to 1984 legislation authored
by Assemblyman Tom Bates, actively supported by the California Catholic Conference,
and enacted into statute, all of our school employees who have contact with minor
children are required, as a condition of employment, to submit fingerprints and to undergo
a criminal clearance investigation by the State Department of Justice and the Federal
Bureau of Investigation.
For private schools, Mr. Weber contended that "there are .70 graduation requirements."
However, California Education Codes 48222, 51202, 51210 and 51220 give a lengthy list
of course requirements and Education Code 51225.3 gives a specific listing of courses
which must be taken for a student to qualify for a diploma of graduation. 1 It should be
noted that Catholic schools have graduation requirements in excess of those mandated
by law.
378.
$ California Private Schools Directory, 1990. Bureau of Publications, California Department of Education, pp. 376.
JAN 30 '92 17:19
916 483 4995 PAGE. 010
The California Teachers Association President claimed that "there are no health
requirements for private schools." In fact, our schools, in common with other enterprises,
must meet requirements with respect to fire safety, health and sanitation under
regulations of the State Fire Marshall, the State Department of Health Services, and city
and county agencies.
Mr. Weber stated that on the last time he checked "private schools did not have to meet
earthquake safety standards." Apparently he is unaware of private school compliance
with earthquake safety standards in the various earthquake zones of California and local
city and county ordinances which have prompted Catholic school closures, extensive
retrofitting and, as in the case of St. Rose School In Santa Posa, totally new construction.
Mr. Weber failed to make mention of our schools' compliance with safety statutes relating
to fire drills, first aid, school buses, earthquake emergency procedures, asbestos
abatement, immunizations and child abuse reporting. CTA's Government Relations
Divisions Is circulating literature which states that "children are at risk from a medically
contaminated environment (i.e. no requirement of a measles shot)." Yet, California's
Health and Safety Code 3381, by which our schools abide, requires Immunizations
against diphtheria, tetanus, poliomyelitis, and measles as 8 condition of enrollment in both
public and private schools.
It should be recognized that California's Cathollc schools, which serve nearly half of the
private school students in the state, enroll a higher percentage of children from minority
families than do the public schools. California Catholic schools have a proven record of
educational excellence, particularly for disadvantaged urban youth.
California Catholic schools are genuine participants In the educational life of the state.
Large numbers of public school employees entrust their own children to parochial schools.
Significant numbers of Cathollo school graduates are administrators and Instructors in
California's public school systems.
As Catholic School Superintendents, we do not presume to have the expertise to solve
all of the pressing problems of education in this multi-cultural and multi-ethnic state.
However, we hope that further discussions of alternative solutions to the educational
crisis, including a voucher possibility, might be made in a noninflammatory manner, based
on factual Information, without misrepresentation.
It should be noted that the current initiative effort to place a voucher proposal on the 1992
justice and concern for all California youth.
We urge our parish and school communities to examine the issue from perspectives of
ballot has not originated in the Catholic school community but in the business community.
We are pleased to see, within The Parental Choice in Education Initiative, special
provisions for the Legislature to provide supplementary funding for transportation of
physical impairments or learning disabilities.
children from low income familles and for educational services needed by youth with
JAN 30 '92 17:20
916 483 4995 PAGE. 011
With our colleagues in Catholic education throughout the United States, we continue to
children. reinforce the Church's position that parents are the first and foremost educators of their
Recognizing that Catholic schools are a significant part of education In California, we
encourage efforts to provide financial assistance to all parents to ensure that they can
afford to choose the type of schooling they desire for their children.
We urge all California Catholics to study The Parental Choice in Education Initiative, to
engage in respectful dialogue on the issue, and to exercise their civic rights and
responsibilities. On our part, we wish to assure our fellow Californians that we will
continue our educational efforts with K-12 parochial school programs which are
particularly important to children of disadvantaged families.
January 21, 1992
California Catholic School Superintendents
Ms. Agnes Leonardich
Chairperson, CCSS
Superintendent of Schools, Diocese of Monterey
Mr. Richard Sexton
Superintendent of Schools, Diocese of Fresno
Sr. Rose Marie Hennessy
Superintendent of Schools, Diocese of Oakland
Br. William Carriere
Superintendent of Schools, Diocese of Orange
Mr. James Adams
Superintendent of Schools, Diocese of Sacramento
Mr. Thomas Heding
Superintendent of Schools, Diocese of San Bernardino
Sr. Glenn Anne Mc Phae
Superintendent of Schools, Archdiocese of San Francisco
Sr. M. Claude Power
Superintendent of Schools, Diocese of San Jose
Sr. Anne Patricia O'Connor
Superintendent of Schools, Diocese of Santa Rosa
JAN 30 '92 17:20
916 483 4995 PAGE.012
Sr. Madeline Clancy
Superintendent of Schools, Diocese of Stockton
Dr. Jerome Porath
Superintendent of Schools, Archdlocese of Los Angeles
Mrs. Audrey Tellers
Superintendent of Schools, Diocese of San Diego
Dr. Joseph P, Mc Elligott
Associate Director for Education, California Catholic Conference
JAN 30 '92 17:21
916 483 4995 PAGE. . 013
What opponents are saying
This proposed constitutional amendment, if approved by the voters,
would establish a system of state-funded educational vouchers ("scholar-
ships"). Key features include:
Beginning in 1993-94, all school-age children are eligible to
receive a scholarship equal to at least 50 percent (approximately
$2,490 in 1993-94) of prior-year per-pupil government spending
on K-12 education. (Children who were enrolled in private
schools in October 1991, however, are not eligible to receive
scholarships until 1995-96.)
Parents and students may add to the value of the scholarship,
without limit.
The Legislature may provide supplemental funds, but only for (1)
transportation of low-income students or (2) special needs related
to physical or learning disabilities.
If the value of the scholarship exceeds charges imposed by a
scholarship-redeeming school, the excess is held in trust by the
state for later use at any scholarship-redeeming school or any
institution of higher education in California. Any surplus
remaining at a student's twenty-sixth birthday reverts to the state.
Scholarship-redeeming schools may be private or public. Such
schools, however, may not (1) discriminate on the basis of race,
ethnicity, color, or national origin; (2) advocate unlawful behavior
or deliberately provide false or misleading information regarding
the school; or (3) enroll fewer than 25 students.
Scholarship-redeeming schools are subject to regulation no more
restrictive than the relatively minimal level applicable to private
schools. Any additional government regulation of all private
schools (whether scholarship-redeeming or not) beyond that in
effect as of October 1991 is generally prohibited, unless approved
by a three-fourths vote of the Legislature.
All public school districts must establish mechanisms for
allocating district enrollment capacity "based primarily on parental
choice." Public schools which choose not to redeem scholarships
must open any remaining capacity to inter-district choice.
The State Board of Education may require public schools and
scholarship-redeeming schools to administer tests "reflecting
national standards" for the purpose of measuring individual
students' academic improvement.
2 -
PROS AND CONS
PROS:
Increases Budgetary Flexibility. As shown in the fiscal analysis, this
measure greatly reduces the protection of public schools' funding levels that
would otherwise have been provided by Proposition 98. (Under the public
schools' "best case" scenario noted above, the state would save $4.7 billion in
1999-2000, relative to Proposition 98 requirements in the measure's absence.)
This, in turn, would allow for greater flexibility in setting overall state budget
priorities. (The Governor and the Legislature, of course, could choose to spend
some or all of these actual savings on the schools.)
Creates Competition. Proponents of vouchers argue that competition will (1)
break the bureaucratic structure resulting from the public schools' monopoly
position, (2) encourage the creation of more alternatives to meet the educational
needs and desires of parents, and (3) require under-performing schools to "shape
up" or go out of business.
Mandates Public School "Choice." The measure requires intra-district
choice for all public schools, and inter-district choice among those public schools
which choose not to redeem scholarships.
Allows Freedom from State Regulation. Public schools that chose to
become scholarship-redeeming would be subject to no more regulation than the
relatively minimal level applicable to private schools. Among other things,
requirements: scholarship-redeeming schools would not be subject to collective bargaining
A Simpler Funding System. In contrast to the existing system of school
finance, with its myriad Byzantine formulas, this measure provides all children
in a given grade level with a voucher of equal value (although the Legislature is
authorized to provide supplemental funds for a limited number of special needs).
Proponents argue that such a system, in addition to being simpler than the
existing one, would also be fairer.
Could Make Everyone Better Off. If (1) the value of the voucher were set
at a relatively low level, (2) relatively high numbers of pupils chose to leave the
non-scholarship-redeeming public schools, and (3) the Governor and Legislature
decided to provide public schools with funding in excess of the new Proposition
98 minimums, it is possible that the public schools could receive slightly more
per pupil than they would have in the measure's absence, at less total cost to the
state.
3 -
CONS:
The Rich Get Richer (I). Unlike some other voucher proposals, this
measure imposes no limitations on the ability of parents to supplement the value
of the voucher--nor does it allow the value of the voucher to vary according to a
family's ability to pay. As a result, wealthy parents could use the scholarships to
augment their already-substantial purchasing power and "outbid" poorer parents
for the most desirable schools. Arguably, such an outcome would be directly
violative of the Serrano decision requirement that the quality of publicly-
supported education not be a function of wealth (in this case, family wealth).¹
The Rich Get Richer (II). According to the Associated Press, the average
private school tuition (excluding Catholic parochial schools) in 1991 was
$6,400. A $2,500 voucher will help make this option available to those families
that can afford to come up with the additional $3,900 per year; absent financial
aid from some other source (or a significantly higher voucher value), however,
such schools will remain out of reach of poorer families.
The Poor Get Poorer (I). If the Legislature is precluded from providing any
supplemental assistance beyond (1) transportation for low-income students and
(2) special needs related to physical impairment or learning disability, what will
happen to students who have other special needs (e.g., limited English
proficient, educationally disadvantaged)? Scholarship-redeeming schools would
likely respond by (1) excluding such harder-to-educate students, (2) charging
more to education them, and/or (3) attempting to cut costs (e.g., through larger
class sizes) Should parents be expected to pay for these factors (which may be
largely outside their control)? How will low-income parents come up with the
resources to compensate for the well-documented educational disadvantages that
accompany poverty?2
The Poor Get Poorer (II). The measure makes no explicit provision for
transportation assistance to low-income students who remain within the non-
scholarship-redeeming public school system, but who wish to attend a school
other than their neighborhood school. Without transportation assistance, such
1 Coons and Sugarman, strong proponents of educational vouchers, nevertheless reject voucher systems in
which the rich have an unlimited ability to augment the voucher's value:
"Unless the amount of the voucher were so large as to preempt all interest in further spending for education
by all but an insignificant number of families (an outcome economically and politically unthinkable), the
effect of [such a] proposal is plain. Families unable to add extra dollars would patronize those schools that
charged no tuition above the voucher, while the wealthier would be free to distribute themselves among the
more expensive schools. What is today merely a personal choice of the wealthy, secured entirely with
private funds, would become an invidious privilege assisted by the government. Isolation and excellence
might prefer would be foreclosed to the poor--all with the help of the state. This offends a fundamental
would be purchased by the rich with public assistance. Both wealthier classmates and the schools they
school." (John E. Coons and Stephen D. Sugarman, Education by Choice, p. 191.)
value commitment--that any choice plan must secure equal family opportunity to attend any participating
²In their widely-cited study touting the benefits of parental choice in education, Chubb and Moe propose a
voucher system in which students with special needs receive add-ons to their scholarships. "At-risk students
would then be empowered with bigger scholarships than the others, making them attractive to all schools
(and stimulating the emergence of new specialty schools)." (John E. Chubb and Terry M. Moe, Politics,
Markets, and America's Schools, p. 220.) Chubb and Moe also recommend against allowing parents and
students to supplement their vouchers with personal funds. (Ibid.)
4 - -
students may find their only practical options to be (1) attending a poor-quality,
but local, public school or (2) attending a second-rate scholarship-redeeming
school.
Public Schools Hit With "Triple Whammy." Based on the foregoing
discussion, in conjunction with the fiscal analysis presented earlier, it is not
difficult to envision an outcome in which the remaining public (non-scholarship-
redeeming) schools get stuck with the harder-to-educate (i.e., more costly to
educate) kids, at the same time that per-pupil support for public schools is
drastically reduced. Moreover, the public schools would still be subject to
current statutes and regulations, while scholarship-redeeming schools would not.
If public schools are unable to meet expectations for academic quality under these
adverse conditions, more students may leave the system; as attendance
decreases, per-pupil funding will drop further. The end result of such a
downward spiral would be the demise of the public school system.
Minimal Accountability Requirements. The measure implicitly assumes
that market forces will take care of most issues of financial and performance
accountability. (With respect to academic accountability, it merely provides that
the State Board of Education may require public schools and scholarship-
redeeming schools to administer tests "reflecting national standards," with each
school's composite results released to the public.) Given a very significant state
financial commitment, do we really want to abandon all regulation? (What about
sanctions on schools that are consistently low-performing or that otherwise
"misuse" public funds? What about facilities structural integrity standards?)
Could Lead to Undesirable Discrimination. The measure only prohibits
discrimination based on race/ethnicity, color, or national origin. Scholarship-
redeeming schools could presumably discriminate based on sex, sexual
orientation, religion, physical/mental handicap, and academic or athletic ability.
Benefits of Competition Are Unproven. While the potential benefits of
competition sound fine in theory, they have yet to be proven in any large-scale
demonstration of education vouchers. In light of the concerns noted, are the
potential benefits worth gambling the public school system's existence?
Overall, A Bad Voucher Plan. Even opponents of vouchers concede that
there is a wide continuum in voucher plans from "good" to "bad," depending
upon the specifics. This is a very bad voucher plan, the intent of which appears
to go far beyond providing "level playing field" competition for the public
schools. Instead, it is structured so as to "stack the deck" against the public
schools, with the apparent goal of destroying the public school system.
- 5
KNOWN PROPONENTS/OPPONENTS
Proponents:
Excellence through Choice in Education League (ExCEL)
Joseph Alibrandi, Whittaker Corporation CEO
Former US Secretary of Education William Bennett
Milton Friedman (Professor Emeritus of Economics, University of Chicago)
Former Governor George Deukmejian
Opponents:
Superintendent of Public Instruction Bill Honig
California School Boards Association
Association of California School Administrators
California Teachers Association
California Federation of Teachers
California State PTA
California School Employees Association
Service Employees International Union
United Teachers of Los Angeles
Californians for Community Colleges
Los Angeles Educational Alliance for Restructuring Now (LEARN):
Robert E. Wycoff, President, ARCO; Chairman, LEARN
Roy A. Anderson, Chairman, The 2000 Partnership
William R. Anton, Superintendent, Los Angeles Unified School Districts
Helen F. Bernstein, President, United Teachers of Los Angeles
John W. Mack, Urban League, Los Angeles; Black Leadership Coalition on Education
William G. Ouchi, UCLA School of Management; Leadership Education for Asian-
Pacifics
Richard J. Riordan, Riordan & McKenzie; Founder, Kids First
Virgil Roberts, Dick Griffey Productions; Solar Records; Chairman, Los Angeles
Educational Partnership
John P. Singleton, Security Pacific Corp; Chairman, Workforce LA
Phillip L. Williams, Vice Chairman, Times Mirror Corp.; Chairman, California
Chamber of Commerce Education Committee
Mike Roos, President and Chief Executive Officer, LEARN
Neutral:
California Business Roundtable*
*
Has indicated intent to oppose measure, if it qualifies for ballot--provided that progress
continues to be made towards implementing public school choice.
- 6
FISCAL ANALYSIS
It is not possible to predict precisely the fiscal effect of this
measure. This is because the fiscal effect would depend on several interrelated factors,
including:
o The number of students in private schools (currently not supported
by the state) who chose to receive scholarships.
The number of students in public schools who chose to receive
scholarships (potentially at lower cost to the state).
The value of the scholarship, as set by the Legislature.
The level of per-pupil spending on students who chose to remain
in non-scholarship-redeeming public schools.
A simplistic analysis predicts that, if all of the 500,000 or so students currently
attending private schools chose to receive scholarships and no students left the public
school system, the measure would result in net additional costs to the state. On the other
hand, if many students were to leave the public school system and convert to less-costly
scholarships, the measure could result in net savings.
Proposition 98 Interactions. A further complication, however, is provided by
the interaction of these factors with the Proposition 98 minimum funding requirements.
Under the terms of the measure, each student who left the non-scholarship-redeeming
public schools would result in a corresponding reduction to Proposition 98 minimum
funding requirements as determined by "Test 2" (the "maintenance of prior year's service
levels" test). (The amount of the reduction in 1993-94 would be approximately $4,230 per
pupil.) This reduction would continue with the departure of additional pupils, until the
"Test 2" funding dropped below the "Test 1" (percent of General Fund revenues) level--at
which time "Test 1". would be controlling.
In addition, however, the measure provides that all spending for scholarships, as
well as any "savings" resulting from the granting of scholarships, counts towards meeting
Proposition 98 minimum funding requirements. "Savings" are defined as the difference
between (1) the amount of the scholarship and (2) the average state and local spending per
student in non-scholarship-redeeming public schools. Again using 1993-94 figures, each
pupil receiving a scholarship would produce an additional $4,230 in spending and
"savings" counting towards Proposition 98 funding requirements.
The effect of these provisions would be to produce a "double hit" on the
Proposition 98 guarantee for every pupil that leaves the public school system. The first
"hit" occurs as the overall guarantee is--appropriately--reduced to reflect fewer students
within the public school system. The second "hit" results from counting spending on
scholarships and "savings" towards meeting Proposition 98 funding requirements.
A"Best Case" and "Worst Case" Analysis. While it is not possible to
estimate precisely the value of each of the four factors noted above in all of the years in
which the measure would be in effect, it is possible to develop alternative projections based
on plausible "best case" and "worst case" scenarios--taking note of the fact that the number
of students who chose to receive scholarships would, in all likelihood, be positively
correlated with the value of the scholarship.
- 7 -
The attached charts summarize the results of such an analysis, in which the
following two scenarios are contrasted:
o High Voucher, High Exodus. In this scenario (a "worst case" from the
public schools' perspective), the value of the voucher is set at 75 percent of the
prior year's total per-pupil spending on public schools. In the initial year of
operation, 3 percent (164,000) of 1992-93 public school enrollment chooses to
receive scholarships; this figure grows by 60 percent annually thereafter. In
1995-96, 112 percent (696,000) of the prior year's private school enrollment
chooses to receive scholarships; this figure grows by 12 percent annually
thereafter. We have further assumed that the Legislature chooses to provide the
bare minimum level of funding needed to meet Proposition 98 funding
requirements (including counting "savings" towards the guarantee); in no event,
however, would per-pupil spending on either vouchers or public schools decline
from year to year.
Minimal Voucher, No Exodus. In this scenario (a "best case" from the
public schools' perspective), the value of the voucher is set at 50 percent of the
prior year's total per-pupil spending on public schools. No students attending
public schools choose to receive scholarships; all students who would otherwise
have attended private schools choose to do so. In contrast to the above, we
assume that the Legislature chooses to fund Proposition 98 such that actual total
public spending on public schools plus vouchers (excluding "savings") equals
the guarantee; again, however, in no event would per-pupil spending on either
vouchers or public schools be permitted to decline from year. to year.
The charts also show projected "baseline" state and local spending for public
schools under Proposition 98, in the absence of the initiative. (Economic assumptions are
based on the Commission on State Finance Fall 1991 Long-Term General Fund Forecast.)
Chart 1 shows that, under the "high voucher, high exodus" scenario, total state and
local spending for public education (excluding spending on vouchers) would drop from a
level of $22.5 billion in 1992-93 to $18.1 billion in 1999-2000-55 percent below the
projected "baseline" level of $40.4 billion. Obviously, under these circumstances, tens of
thousands of teachers would be laid off from the public schools; it is impossible to predict
how many of these would find employment in scholarship-redeeming schools. The chart
also shows that, under the "minimal voucher, no exodus" scenario, public education
spending would be $33.9 billion in 1999-2000--16 percent below the "baseline" level.
Chart 2 shows these same data, on a per-pupil basis. The chart shows that, on a
per-pupil basis, the impact of the initiative on public education spending is remarkably
similar under both scenarios. Specifically, under the "high voucher, high exodus"
scenario, per-pupil spending in 1999-2000 is 19 percent below the "baseline" level of
$5,633, while under the "minimal voucher, no exodus" scenario, it is 16 percent below the
"baseline" level.
This analysis therefore suggests that, unless the Governor and the
Legislature were to provide funding in excess of the Proposition 98-
required minimum guarantee levels, per-pupil funding for those students
who remain in public schools would likely decrease significantly (that is,
by 16 to 19 percent) below amounts needed to maintain 1992-93 current
service levels. This, in turn, would require significantly increased class
sizes, reductions in teacher compensation, or both.
CHAIR
Joint Legislative Budget Committee
VICE CHAIR
ALFRED E. ALQUIST
JOHN VASCONCELLOS
SENATE
ASSEMBLY
ROBERT G. BEVERLY
WILLIAM BAKER
BILL GREENE
GOVERNMENT CODE SECTIONS 9140-9143
JOHN L. BURTON
MILTON MARKS
ROBERT CAMPBELL
NICHOLAS C. PETRIS
PATNOLAN
ALAN ROBBINS
VACANCY
CALIFORNIA LEGISLATURE
VACANCY
VACANCY
LEGISLATIVE ANALYST
ELIZABETH G. HILL
925 L STREET, SUITE 650
SACRAMENTO, CALIFORNIA 95814
(916)445-4656
December 13, 1991
Hon. Daniel E. Lungren
Attorney General
1515 K Street, Suite 511
Sacramento, California 95814
Attention: Mary Whitcomb
Initiative Coordinator
Dear Attorney General Lungren:
Pursuant to Elections Code Section 3504, we have reviewed the proposed
initiative cited as the "Parental Choice in Education Initiative"
(File No. SA 91 RF 0024, Amendment #1).
The Proposal
This measure would significantly change the way the state funds K-12
education in California. The initiative's major provisions would:
Require the state to provide annual scholarships to all school-age
children. These scholarships could be used only at schools that
elect to become "scholarship-redeeming schools." The scholarship
amount would have to be at least 50 percent of the average level of
spending from federal, state, and local sources for public school
students in California.
Require that the Legislature establish a process by which public
schools may become scholarship-redeeming schools.
Require that public school districts establish mechanisms to "allo-
cate enrollment capacity" primarily on the basis of "parental
choice." Presumably, this would require establishment of inter- and
intra-district open enrollment programs and policies.
Hon. Daniel E. Lungren
-2-
December 13, 1991
Authorize the State Board of Education to require public and scholar-
ship-redeeming schools to administer tests measuring individual
students' academic improvement.
The proposed initiative also contains language affecting "Proposition
98" minimum education funding requirements. This language could reduce the
state's obligation under the minimum funding requirement, thereby giving the
state greater flexibility in determining funding levels for education pro-
grams. The scholarships required by the proposed initiative would be a new
constitutional guarantee, separate from, but coexisting with, the Proposition
98 guarantee. Unlike Proposition 98, the new guarantee could not be suspend-
ed.
Fiscal Effect
The fiscal effect of this proposed initiative is Targely unknown, as it
would depend on the legal interpretation of the measure, how the Legislature
implemented the measure, and how people responded to those decisions. For
instance, a key factor is the level of the scholarship provided. That, in
turn, would affect the number of schools that opt to become scholarship-
redeeming schools, and the movement of students between public, private, and
scholarship-redeeming schools.
Scholarships. The primary fiscal impact of the measure would be through
the scholarship provision. On the one hand, this requirement could result in
added costs to provide scholarship payments to existing private schools (which
currently receive virtually no public support) that chose to become
scholarship-redeeming schools. On the other hand, the state would save money
to the extent that students who otherwise would have attended public schools
enroll in scholarship-redeeming schools (assuming the amount of support from
state sources per public school student exceeds the scholarship amount). The
actual impact would depend on the net effect of these factors and on whether
the Legislature accommodated any net costs by reducing the amount school
districts would otherwise receive under current law. The net impact, however,
could be costs or savings in excess of $1 billion.
Open Enrollment. We estimate that implementing the open enrollment
policies could result in unknown costs or savings to the state, depending
primarily on whether students attending schools outside their district of
residence were entitled to higher or lower levels of state per-student funding
in the district of attendance.
In addition, we estimate that school districts would incur costs to plan
for and implement these policies. The magnitude of these costs to school
districts is unknown but potentially in the tens of millions of dollars.
Testing. We estimate that, if the State Board of Education elected to
do so, implementing a program of testing individual academic improvement would
result in costs to the state and/or school districts and scholarship-redeeming
schools in the tens of millions of dollars annually to develop, administer,
Hon. Daniel E. Lungren
-3-
December 13, 1991
and score tests. These costs would vary depending on the breadth, frequency,
and sophistication of the tests.
Summary. In summary, the initiative would have the following primary
fiscal effects:
Costs or savings to the state, potentially in excess of $1 billion,
due to the scholarship, open enrollment, and testing requirements.
Costs to school districts, potentially in the tens of millions of
dollars, due to the open enrollment and testing provisions.
Sincerely,
Mac Jaylor
for
Elizabeth G Hill
Legislative Analyst
of Lasenus Thomas Director W. of Hayes Finance Sancell
A20 The Sacramento Bee Sunday, March 8, 1992 *
*
School choice measure
sparks emotional battle
By Lisa Lapin
Rowlett, a PTA president, is fight-
Bee Staff Writer
ing to stop an initiative that would
give parents $2,600 in tax money to
Mark Mezger's four children at-
make their own school choice. Mez-
tend Holy Rosary Academy in Wood-
ger is gathering signatures to put the
land, the third generation of Mezgers
issue on the November ballot.
to get a Catholic education. It's an
Parents throughout California are
opportunity the Mezgers believe
should be available to everyone, rich
or poor.
Al Rowlett believes that the best
place for his four children is in the
the being tion property in Opponents Education most issue forced tax emotionally since funding to Initiative say take the Proposition sides 14 Parental charged would years in perhaps destroy ago. Choice educa- 13 cut
Elk Grove public schools, where ev-
ery student is entitled to an educa-
public education in California by
tion. Diverting tax money to more
milking more than $1 billion from
discriminating private schools, he
says, is "inherently unfair."
Please see LEARN, back page, A20
FROM PAGE ONE
Learn: Teachers mobilize to keep initiative off ballot
Continued from page Al
by the Legislature, which would be asked to re-examine
school coffers while skimming off the best students.
its method of school funding. The legislative analyst has
Supporters say the proposed constitutional amend-
Voucher plan would underwrite tuition, limit regulations
said the measure could either save or cost the state $1 bil-
ment, backed by Los Angeles aerospace entrepreneur Jo-
lion, depending on how it is enacted.
seph Alibrandi and others, will rescue public schools
Bee Metro Staff
school regulations could be enacted without a three-
The teachers union is not waiting to debate the fine
from mediocrity by forcing them to be competitive.
fourths vote of the Legislature.
points. When the signature drive began in January,
The fate of the initiative could be decided long before it
What the Parental Choice in Education Initiative
Private schools would be free to establish their
teachers hit shopping malls and grocery stores en masse
ever reaches voters, with the powerful 250,000-member
would do:
own codes of conduct and discipline. Private schools
to dissuade people from signing voucher petitions. The
teachers union mobilized to prevent it from getting
Provide a scholarship for every school-age child
could dismiss students based on their own behavior or
teachers are also handing out official forms that will al-
enough signatures to qualify.
wishing to enroll in a private school. The grant would
performance rules.
low people to retract their signatures if they've already
There are indications that the anti-petition strategy has
be about $2,600 - half the amount the state spends
The State Board of Education could require test-
signed in favor of the initiative.
been working so far - the initiative has only 330,000 of
per student in public schools - based on 1991-1992
ing to measure private and public schools against na-
the 1 million signatures needed by April 27. Campaign
"We' fiying to educate people on the facts," said John
figures.
tional academic standards.
consultants predict the initiative needs,96,000 new signa-
Cohn, president of the San Juan Unified Teachers Associ-
Vouchers could be redeemed at any private
Private school teachers would not need creden-
tures a week - a tough task even for the most popular
ation. "The goal is to stop it now, before it gets on the bal-
school with more than 25 students. The school could
tials.
lot."
cause.
not discriminate on the basis of race or ethnicity, and
Public schools throughout the state would be re-
Virtually every group affiliated with public education in
it could not advocate unlawful behavior or teach hate.
quired to establish open enrollment, removing district
If the measure reaches the ballot, the massive CTA is
California opposes the measure, as does the Rev. Jesse
Private schools would be free from "unnecessary,
and school boundaries.
reportedly capable of spending $10 million to $15 million
Jackson and such disparate lawmakers as Assemblymen
burdensome or onerous regulation." No new private
- Lisa Lapin
to campaign against it - triple what proponents are ex-
B.T. Collins, R-Carmichael, and Phil Isenberg, D-Sacra-
pected to spend.
mento.
The teachers have already stunned political consultants
Grace Foster, vice president of the 1.5 million-member
EXCEL will spend an estimated $500,000 on the peti-
The initiative would allow anyone with 25 students or
with the energy they've devoted to the anti-petition drive
California Parent-Teacher Association, characterizes the
tion drive and promises to continue gathering signatures
more to run a school, with no regulation as to course con-
- said to be the first such effort of its kind in California
initiative's primary premises as a "lie."
to make the June 1994 ballot if the initiative fails to quali-
tent, teacher credentials or health and safety. The vouch-
politics.
("This initiative would do nothing to improve education
fy this year.
er would forbid private schools from discriminating on
and nothing to guarantee that parents will get their
Regardless of the outcome, educators say the initiative
the basis of race or ethnicity - but would allow them to
Supporters of the voucher initiative accuse the teachers
choices," she said.
will force public schools to acknowledge parents' right to
be selective on the basis of gender, religion and academic
union of using exaggerated cost figures and scare tactics:
There are some signs that the voucher campaign is
choose how their children are educated.
or physical ability.
The CTA has criticized private schools for having unqual-
gaining favor, particularly among Catholic and other
"It's an opportunity for California to democratize its
Al Rowlett wonders what would happen to the Califor-
ified teachers, poor health and safety records and low ed-
Christian school parents and people disenchanted with
schools," said John Coons, a University of California,
nia children who don't speak English, or who have
ucational standards.
state-funded education.
Berkeley, law professor and an advocate of choice in edu-
Downs syndrome or dyslexia. The thought of that inequi-
"What they done basically amounts to private school
I've got two children in two different public schools on
cation for three decades. "This will be the stimulation we
ty has prompted Rowlett to spend his evenings persuad-
bashing," said James Adams, superintendent of the 50
two different year-round schedules, and neither one of
need to change an inefficient system."
ing other Elk Grove parents not to sign voucher petitions.
schools in the Catholic Diocese of Sacramento. "We
them gets any attention in class," said Rhonda Johnson of
Coons, however, has not backed the current voucher
"Public schools are required to provide an education
merely want everyone to be well-informed before they
Merced, where schools recently went year-round to ease
initiative because it offers too little money to parents and
for any child. They have to have competent teachers,
make up their mind."
overcrowding. "I'm willing to vote for anything that will
does not provide enough protection for poor children and
mandatory subjects, school lunches, you name it," Row-
Catholic school parents are just now organizing to
get my kids out of that situation."
those with disabilities.
lett said. "The private schools could get tax money, but
gather signatures in favor of the initiative. Parents from
The voucher initiative counts among its backers Nobel
The $2,600 the initiative proposes to give parents
they wouldn't have to follow the same rules. "I'm not op-
some 35 local parochial schools gathered Thursday night
laureate Milton Friedman, former U.S. Education Secre-
equals half of what the state spends per student, and that
posed to competitiveness, but you have to compete on an
at St. Francis High School to plot strategy.
tary William Bennett and President Bush, who has made
money could be spent at any private school. Coons says
equal playing field."
choice in education a campaign platform.
that's not enough financial incentive to create new com-
The California Teachers Association claims that public
"We're getting a lot of support, because there are a lot
"The idea is to make educators accountable to parents,
peting private schools. Nor is it enough for poor students
schools would lose $4 in school financing for every $1
of parents out there who have not had the financial capa-
not to a bunch of bureaucrats who have rules that don't
to enroll in existing private schools, where average tu-
that goes in a voucher to private schools - as much as $1
bility to send their kids to private schools," said Mezger.
produce results," said David Barulich, treasurer of the Ex-
ition is $6,500. Parochial schools, subsidized by churches,
billion a year, depending on how many students leave.
"All we are asking for is half of what public schools get
céllènce through Choice in Education League, or EXCEL.
cost an average of $1,800 per year.
But some of the financial impact would be determined
to help a lot of people."