A recently filed US Supreme Court Case, “Building Industry Association – Bay Area v. City of San Ramon,” has chilling implications for city-dwellers everywhere, starting with California.
What’s Going On
City of San Ramon (just east of San Francisco) is struggling to keep up with the cost of city services, mainly due to rapidly rising pension costs. After a presentation from the police chief highlighting the shortfalls in police protection and the need for more funding, the city council cooked up a scheme to boost their tax revenues by an additional two million dollars per year, without having to raise taxes on current voters.
How It Works
Let’s say you have a large vacant lot in the middle of several city blocks, and a developer wants to turn it into a neighborhood. City services like police and fire currently cover that lot, but they’re going to need more policemen and firemen to provide the same level of coverage once a neighborhood is built in the middle.
California has laws and constitutional provisions that say a city can run a tax assessment on particular properties to provide additional services, but cannot do so to provide money to the general fund which covers costs general to the whole city. California laws also state that a city can add a special tax with a 2/3 approval of landowners, but new general taxes must be approved by a majority of voters.
So the City of San Ramon declared the vacant lot as a new “special district” in the city, added a condition of development for the particular lots that the developer (current landowner) must agree to a new special tax dictated by one man (the mayor), and then after that approval began “annexing” all other undeveloped lots as part of the “Special District” even though they are scattered across the existing city.
The special tax added an additional property tax few to all new and future developments, provides no new or additional services, and will be paid in perpetuity by the residents in the special district. Thus, you and your next door neighbor will both pay property tax based on the value of your parcel, but if the border for the “Special District” falls between your houses and you are inside the special district simply because your house was built more recently, then you would pay an additional property tax, forever, without receiving any extra services.
Despite labeling this as a “special tax” the city threw the proceeds into their general fund for use across the entire city, which is more the behavior of a “general tax” requiring voter approval instead of landowner approval.
Further, to cover themselves and suggesting they knew how twisted and wrong these action were, they inserted a “poison pill” paragraph called “section H” which states:
If the levy of the Special Tax is repealed by initiative or any other action participated in by the owners of parcels in CFD No. 2014-1, the City shall cease to levy the Special Tax and shall cease to be obligated to provide the Authorized Facilities and authorized Services for which the Special Tax was levied. The obligations to provide the Authorized Facilities and Authorized Services previously funded by the repealed Special Tax shall become the obligations of any property owners association established within CFD No. 2014-1, and if there is no such association, they shall become the obligations of the property owners of Parcels within CFD No. 2014-1 in proportion to the number of Parcels owned by each such owner to the total number of Parcels within CFD No. 2014-1.
Why Do This?
The motive is a simple point of cowardice. If the land is developed, the new houses and condos will proportionally increase the tax revenues, but not enough to make up the shortfall. Thus, to cover their reckless spending, they could either
- Reduce city service levels across the city
- Raise property tax across the city
- Raise property tax only on future owners
As the complaint to the Supreme Court pints out, options 1 and 2 negatively affect the current resident voters and would reduce odds of reelection. Option 3 negatively affects future voters who are not yet around to stop voting for these corrupt politicians. And in case the future voters ever would threaten to stop voting on account of the special tax, there’s now a city law to threaten and intimidate that particular group of voters from protesting either in free assembly or at the ballot box.
Count The Crooked Actions
- They created a “special district” inside city limits, and then annexed all undeveloped parcels scattered across the city as part of the special district.
- They used a law allowing special assessments to be applied solely by the mayor, ignoring the part that specifies the funds must provide additional services.
- They call it a “special tax” to avoid required voter approval, but are using the proceeds like a general tax.
- They applied the tax when the district consisted of a single landowner, and made landowner approval a requirement to proceed with development. Once approved, they did not need approval of “annexed” landowners.
- The added tax provides no new or additional services beyond what is currently provided. Those who pay extra beyond their proportional share do not get extra service.
- They spell out retribution against any future property owner if they exercise free speech rights against this corrupt tax, or if they participate in normal voting activities against the tax.
The Judiciary as Rubber Stamp
We are seeing more and more across our country and Western Civilization that the judiciary has reduced itself to a rubber stamp for unjust executive and legislative actions. It happened with the ObamaCare case, and has happened in EU countries whose voters attempt to leave the EU. The courts consistently play weasel word games to find a way to justify the decidedly unjust government actions they were designed to prevent.
Obviously, if this case is at the US Supreme Court, that means they did not win at any lower court level. What happened at the lower courts? How did they side with the city?
- Even though the “special tax” proceeds are going into the general fund and being used for general purposes, they are earmarked for “particular” general fund purposes, therefore are “special.”
- The law requiring that “additional” services must be provided is fulfilled because expanding current city-wide services could count as an “additional service.” Never mind that the law spends many words in concern that no one resident should unfairly pay extra for the same level of service, which is exactly what happened here.
- Section H does not affect voting freedom or freedom of speech because if the “special tax” were removed then the city would in fact have less money for general purposes and could be justified in saying they can’t afford to provide services to the newer properties. This is the one piece now pending at the US Supreme Court. All others were settled (unfairly) as matters of state law.
- And the ever popular “lack of standing.” Though the law threatens to revoke city services if the voters exercise their voting rights or freedom of speech, because the city has not yet taken such draconian action, the voters have no basis to complain or even file a court case.
Lack of standing has really become the cowardly judge/court’s way out of deciding hard cases. It’s use has exploded during the Obama years. In effect, if you somehow found out Obama had added you to the secret “kill list” for drone strike without an American trial, you would lack standing to sue in court over it because he had not yet killed you. (Let’s hope Trump retires that unconstitutional piece of trash.)
Remember, here in the Redoubt we have much lower tax rates and better representation than any Sanctuary City or State in the country! See our Resources page on Taxation for more information.