(August 20, 2003, updated & clarified) -- State legislation that could create the first local income taxes in the history of CA, letting counties impose the tax for public safety purposes with majority voter approval, has been quietly revived with substantive legal powers and some revised terms.
The latest amended version of AB 1690 would allow counties to levy the tax, not cities...and the tax revenue would be allocated to cities within the county.
And in a circuitous set of circumstances, LB's City Council now finds itself at center stage in the debate having voted at its August 19 meeting (7-2, Lowenthal & Baker dissenting) to prepare a resolution opposing consideration of a local income tax.
As first reported by LBReport.com, AB 1690, which is backed by police, sheriff and firefighter employee unions, passed the CA Assembly in June in an earlier version which allowed counties and cities to levy the tax. That version of the bill received the bare minimum 41 of 80 votes -- including LB area Assemblymembers Alan Lowenthal and Jenny Oropeza -- but the bill hit choppy water in the state Senate.
As also first reported by LBReport.com, despite testimony in July by the LB Firefighters Association, the state Senate Revenue and Taxation Committee declined to advance the measure...and with the reluctant consent of the bill's author (Assemblyman Mark Leno, D, San Francisco) effectively neutered the bill so it merely expressed the legislature's "intent" that a local income tax be explored.
As LBReport.com predicted at the time: "That leaves open the possibility that restoring the bill's local income tax legal teeth could take place in the future."
Now it has.
On August 18, the bill's author submitted amendments restoring the local income tax bill's substantive legal powers, causing it to be withdrawn from the Appropriations Committee (due to the substantive change) and sending it to the Senate Rules Committee which will decide where it goes next.
LBReport.com posts a link below to the newly amended local income tax bill indicating its substantively legislative text.
Meanwhile -- apparently by coincidence -- 8th district Councilman Rob Webb agendized for the Aug. 19 Council meeting an item urging that LB City Hall oppose the local income tax bill. Councilman Webb indicated he'd been spurred to action by L.A. County Supervisor Don Knabe, who forcefully opposed the local income tax bill when it had legal teeth in June. At the time Webb agendized the item, the local income tax measure was a non-substantive bill...which City Hall's Manager of Public & Gov't Affairs Carl Kemp and City Attorney Bob Shannon [the latter with a prescient caveat] likewise checked and dutifully reported.
Unbeknownst to them, they'd been blindsided by Sacramento's last minute legislative maneuvers, something that would have been nearly impossible to know until August 19 (if then) when Aug. 18 legislative actions were internet posted. [LBReport.com note: The state legislative web site is notoriously late in reporting changes.]
Apparently wary of imperfect internet technology, , Mr. Shannon suggested the Council direct a resolution opposing the concept of a legislature studying a local income tax [just in case the legislation had been changed]. Councilman Webb picked up on this and said he'd amend his motion to reflect the Council's "intent to oppose local income tax being created by municipalities and counties." Later in the meeting, the Mayor restated the resolution as opposing AB 1690. The bottom line may not be crucial...because the Council [we presume] could amend the resolution's verbiage on the local income tax bill and its subject matter when it comes to the Council on Sept. 2.
At the outset of the discussion, Mayor Beverly O'Neill indicated she did not oppose a Council resolution opposing AB 1690. "I'm feeling no opposition. I mean, I don't oppose this, but I think that we have to ask the Council if they need more information or if they'd like to vote on this."
Councilman Rob Webb also addressed the issue of opposing (what was then assumed to be) a non-substantive bill:
"I can tell you that my intent here is to send a message not only to Sacramento that they need to address runaway spending in a way that is acceptable and retain business in this state without even entertaining the notion that we will allow local governments to pass income taxes and other taxes and skirting the 2/3 majority rule [for approving new taxes.]...I think it's also important that we as a City Council send that same message to our constituents and our businesses in the city of Long Beach that we don't think that this is something that we don't consider is acceptable for us to consider."
Councilwoman Bonnie Lowenthal [who spoke when bill was assumed to be non-substantive]: "I did read in some of the backup material that this bill...has passed the Assembly with the support of our representatives, Alan Lowenthal, Jenny Oropeza and a number of the representatives from the surrounding area..." She added, "...We've said to Sacramento 'change the way you're doing business, change the way our finances are brought to us' and I'm not particularly for income tax, especially at the local level. I just don't see us as wanting to do that as a body. But to vote against the study of the new way to finance some of our needs is also counter-intuitive for me."
Councilman Webb: "I would submit, Councilmember Lowenthal that we are asking our state legislators to change the way things are done. In my opinion, this is the wrong change that we should be studying."
Vice Mayor Frank Colonna: ..."What I'm concerned about is everytime there's a piece of legislation that comes before the Assembly, it costs the taxpayer approximately a quarter of a million dollars. So here we go again with another piece of I think bad legislation, even the very discussion of having an income tax and potentially putting it onto the burden of the cities...It sounds good when you're saying it's all public safety, but at the end of the day, it's another tax...I'm opposing even the study of the issue because it sends a very, very bad message and unfortunately our legislators up there decided to vote, but I think that was prior to a recall getting filed."
Mayor O'Neill then read a quote from Supervisor Don Knabe, blasting AB 1690 as "merely an attempt to pass on this politically unpopular mechanism to local governments who'll be forced to use it under the Draconian cuts the state is faced with in the coming months and years."
4th district Councilman Dennis Carroll added his opposition, calling the legislative proposal "a scam from beginning to end as far as I'm concerned, and beyond whatever resolution we might pass and would be wadded up and thrown into the wastebasket by the legislature anyway, I am going to propose when our Charter Amendment committee gets rolling now put in our City Charter a prohibition against any income tax in the City of Long Beach forever after and stop this in its tracks. We do not want it. We don't want to be turned into New York."
The motion (as stated by the Mayor) was to oppose AB 1690, which City Attorney Shannon added he took to mean permitting local entities to impose a local income and reflecting Council opposition to the legislature studying the idea. "We think it's a stupid idea," Councilman Webb said.
The Council vote was 7-2 (Lowenthal & Baker no)
To view AB 1690 (version as of August 18), click AB 1690 (amended as of Aug. 18)
Previous LBReport.com coverage:
July 2003: Sac'to Legislation Permitting Local Income Tax Neutered In Committee For Now But May Regain Potency Later
LB Firefighters Testify, Support AB 1690 Letting Local Voters Impose Local Income Tax For Public Safety Purposes
Committee Balks On Policy Grounds Voiced Mainly By Sen. Bowen (D., Redondo Beach-LB)
Committee Changes Legislation To "Intent" Bill -- Not Legally Binding; It May Regain Legal Teeth Later
June 2003: CA Assembly -- With Lowenthal & Oropeza Voting Yes -- OK's Bill Authorizing Any City Or County Forming A "Public Safety Finance Agency" To Impose Local Income Tax With Majority Voter Approval