County to Push for Tax on the ‘Rich’

May 19, 2016 by · Leave a Comment 

The County Board of Supervisors voted Tuesday to press for a change to state law that would allow the county to put a “millionaire’s tax” on the November ballot to fund the fight against homelessness.

Supervisors Mark Ridley-Thomas and Sheila Kuehl proposed the legislative push last week, but were denied the three votes needed for passage when Supervisor Hilda Solis chose to abstain.

On Tuesday, Solis opened the board’s meeting by saying, “We have resolved our differences and we have agreed to move ahead.”

The board also approved a related proposal by Solis and Supervisor Don Knabe, directing the CEO’s office to take a harder look at spending on homelessness, with an emphasis on how to more effectively serve single homeless adults.

A 34-page study by the CEO’s office in January found that the county spent nearly $1 billion on roughly 150,000 people who were homeless at one point or another between July 2014 and June 2015.

Services provided included health care, mental health care, welfare, law enforcement and probation services, with the study estimating that about 40 percent of those dollars were spent on just 5 percent of homeless single adults.

“The vast majority of these services are mainstream services,” said Phil Ansell, director of the county’s Homeless Initiative, meaning that the services are not designed specifically for homeless people or to directly combat homelessness.

However, homeless individuals end up using a disproportionate share of those services and the chronically homeless use even more, with the county spending an average of more than $50,000 per person on the most costly 5 percent.

Supervisor Michael Antonovich argued that the problem of homelessness cannot be solved “until the state changes the law that limits 72-hour holds” for mentally ill individuals and treatment for mental health problems is mandated.

Tuesday’s vote clears the way for the county to submit a trailer budget bill to state legislators asking for the authority to put the so-called “millionaire’s tax” on the November ballot.

If a majority of legislators support the bill by June 15 and if Gov. Jerry Brown signs it into law by June 30, then the board will have to decide whether to actually back a ballot measure that would require two-thirds voter approval for passage.

Pollsters commissioned by the county were confident about voters’ positive response to such a measure. A preliminary poll showed 76 percent support for such a tax, even in light of several other potential ballot proposals for new taxes or fees.

Ridley-Thomas said the board should pursue every option to fund its fight against increasing levels of homelessness, with more and more people living on the street in makeshift encampments.

“It is the most compelling issue confronting us at this time,” Ridley-Thomas said. “It is a crisis, no one can deny that.”

More than 100 community leaders and activists spoke out about the issue, most advocating for those who are homeless and many applauding the effort to review current spending.

“Some areas of Los Angeles County look like a bomb has hit,” community activist Glenna Wilson told the board.
County CEO Sachi Hamai has estimated that the county needs to raise about $500 million in ongoing revenue to effectively address the problem.

County staffers and pollsters considered several ways of raising that money, including a half-percent increase in sales tax, a parcel tax, redirection of Measure B revenues — designed to support trauma centers — and a marijuana tax.

The idea of a half-percent tax on personal income in excess of $1 million garnered the highest support, with 76 percent of voters polled in favor.

The board has the ability to raise local sales taxes on its own, but needs the state to give it the authority to place the “millionaire’s tax” on the ballot.

A half-percent bump in the sales tax would raise three times as much money — an estimated $746 million versus $243 million according to board documents — than the so-called millionaire’s tax. However, support for a sales tax increase polled at 68 percent — within the margin of error of the two-thirds of voters needed to pass any such measure.

Antonovich warned that a county millionaire’s tax would drive businesses away.

“Making the tax higher is taking those dollars from the job creators,” he said.

Solis said she wanted to increase funding options that didn’t rely on a tax increase, leaving open the question of whether she would ultimately support putting the millionaire’s tax on the ballot.

California millionaires are already paying a 1 percent tax on income in excess of $1 million, as mandated by Proposition 63, passed in 2004 as the Mental Health Services Act.

Last week, Brown endorsed a plan to issue $2 billion in bonds to finance the construction of housing for homeless individuals. paid for with Prop. 63 funds. The governor’s May Revision to the budget proposed $267 million in first-year funding statewide, which would fall far short of either a new local millionaire’s tax or a sales tax increase in terms of Los Angeles County revenues.

County Delays Decision on Possible ‘Millionaire Tax’

May 12, 2016 by · Leave a Comment 

The Board of Supervisors delayed a decision Tuesday on whether to press for a change to state law that would allow the county to put a “millionaire’s tax” on the November ballot to fund the fight against homelessness.

Supervisors Mark Ridley-Thomas and Sheila Kuehl proposed the legislative push.

“One-time commitments will not address the crisis of homelessness in Los Angeles,” Ridley-Thomas said.

County Chief Executive Officer Sachi Hamai said the county needed to raise about $500 million in ongoing revenue to effectively address the problem.

Kuehl recalled a recent trip to Washington, D.C., with other members of the board.

“Everywhere we went, in every office, homelessness was the issue that was raised again and again and again,” Kuehl said. “And the question, ‘What are you going to do’”

Hamai said a vote in favor would “give the county an option,” and the board would decide later whether to pursue a ballot measure.

In order to have a shot at that option, the county must submit a proposal for a budget trailer bill by June 15, to be approved and signed by Gov. Jerry Brown by June 30.

Despite the short deadline, Supervisors Don Knabe and Hilda Solis successfully pushed to postpone the decision.

Knabe warned about the unintended consequences of a legislative change, which he said would set a precedent for the state to refuse to fund other county needs.

In the future, state officials might tell the county, “Whatever you need, you tax your residents,” Knabe said.

Solis raised concerns about an analysis of homelessness in her district and how it would affect the allocation of revenues. She said the data was provided at the last minute and taking more time to analyze it would allow the board to make a stronger case to state legislators.

The board ultimately voted 2-2-1, with Knabe and Supervisor Michael Antonovich dissenting and Solis abstaining. The board will reconsider the matter next week.

The board has the ability to raise local sales taxes on its own, but needs the state to give it the authority to place the so-called “millionaire’s tax” on the ballot.

A half-percent increase in county sales taxes was one of several other options county staffers and pollsters considered as a means of raising money to combat homelessness. A parcel tax, redirection of Measure B revenues — designed to support trauma centers — and a marijuana tax were other possibilities.

The idea of a half-percent tax on personal income in excess of $1 million garnered the highest support from voters polled, with 76 percent in favor.

Support for a sales tax increase polled at 69 percent — within the margin of error of the two-thirds of voters needed to pass any such measure.

Antonovich expressed skepticism about polls showing broad support for the tax given all the other taxes that may be on the November ballot.

“To have people come out and say they’ll vote yes on four, five, six different taxes is not logical,” Antonovich said. “There’s a problem with the credibility of the poll.”

Pollsters said a homelessness measure would have “no negative impacts” on other measures being considered, including the proposed transportation Measure R2, a potential parcel tax to fund county parks and the possible extension of Proposition 30, a “temporary” statewide tax to fund education.

Phil Ansell, director of the county’s homeless initiative, defended the polling methodology and told the board that voters view homelessness as the second most significant issue facing the county, behind only jobs and the economy.

Ridley-Thomas said the polling reflected voters’ compassion.

“It’s related to a sense of sadness and also anger,” he said.

California millionaires are already paying a 1 percent tax on income in excess of $1 million, as mandated by Proposition 63, passed in 2004 as the Mental Health Services Act. The MHSA is estimated to generate about $1.4 billion in 2015-16 and as much as $1.8 billion by 2018-19 to fund mental health programs, including housing for mentally ill individuals.

The new tax now under consideration by the board would not be restricted to helping those who are mentally ill.

Dozens of advocates urged the board to back the so-called millionaire’s tax, arguing that without the money, the homeless population would only grow.

“We will see more people living in boxes,” said Anne Miskey, CEO of the Downtown Women’s Center.

Homelessness in Los Angeles County increased by roughly 6 percent this year to 46,874 people, according to a recent report by the Los Angeles County Homeless Services Authority.

However, the number of homeless veterans decreased by 30 percent and the number of homeless families was down by 18 percent, which Ansell cited as evidence that county efforts to house homeless veterans and families are working.

“Homelessness persists and has worsened,” Ansell said, but “dedicated resources and focused systemwide attention gets results.”

Antonovich said the problem was not the lack of a tax, but the state’s allocation of the taxes it raises, and argued that higher taxes would drive entrepreneurs and jobs out of the county.

Though it was clear that Antonovich would not support a legislative change and Knabe seemed set on a delay, Ridley-Thomas made an impassioned plea for Solis to join him in voting in favor.

“Do we have the stamina, do we have the resolve, do we have the commitment to step up to our responsibilities?” Ridley-Thomas asked, before making a direct appeal to Solis to act now.

Solis abstained after arguing that a week’s delay wouldn’t significantly hurt the process.

More millionaires — an estimated 772,555 households — live in California than any other state, according to a 2015 study of high-net worth individuals by Phoenix Marketing International. And nearly one-quarter of America’s billionaires live in the state, according to Forbes magazine.

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