Analysis: How a Deal between the Soda Industry and the Legislature Could Impact Our Schools Parcel Tax

Try to follow this stream of events carefully.  Last Thursday, Davis School Board Member Alan Fernandes announced an effort to put a majority-vote parcel tax on the ballot.  In order to even get it on the ballot a lot of things have to go right, including the almost ridiculous collection of 6000 signatures in a three- to four-week period of time.

If that sounds like a rush job – that’s because it is.  Mr. Fernandes is well aware of the political dynamics in the state and knows that he has a very small window to do this.  If he doesn’t get a measure on the ballot by the end of July, he may not get a chance to get a majority-vote parcel tax on the ballot at all.

That is because of a Supreme Court ruling last August.  Under Prop. 218, passed by the voters in 1996, it required that two-thirds of voters approve local ballot measures to raise taxes for specific projects.  But by a 5-2 Supreme Court ruling, the court ruled that the proposition doesn’t apply to such citizens’ initiatives, but instead only to government efforts to raise taxes.

That is why Alan Fernandes as a private citizen had to put the measure on the ballot, not the school board.  And to make things weirder, he had to do it through the city, rather than the school district, which apparently lacks the authority to put such a measure on the ballot.

But it was a loophole that figured to be closing.  Alan Fernandes himself warned on Thursday that there was a ballot initiative that would close that loophole.  It was expected to qualify – it actually has enough signatures to do so – and if it qualified it is expected to pass.  But Mr. Fernandes told the Vanguard, in a separate conversation on Thursday, he thinks by that getting the measure approved simultaneous to the approval of the law, it would be allowed to stand since the old law still ruled the day prior to the proposition becoming law.

While it was likely that a citizen group would challenge the legality of the law, he believed as long as the taxpayer’s association didn’t back such a lawsuit, the law would be upheld in a court.

In short, this had a narrow window to pass and would basically be a one-time measure.

But the winds of change are blowing.  The Bee reported on Sunday that a deal might be cut whereby “California would ban its cities and counties from creating taxes on soda and other sugary drinks for more than a decade if the Legislature approves a budget trailer bill introduced Sunday.”

What does this have to do with the parcel tax and the ability to put a majority-vote parcel tax on the ballot?

The Bee reports that this language would be “part of a developing deal between organized labor and business groups to remove from the November ballot a proposed measure that would make it harder to raise state and local taxes.”

Senate Bill 872, the Bee reports, prohibits new local taxes on “groceries,” such as “carbonated and noncarbonated nonalcoholic beverages,” through the end of 2030, including any that may pass this year.

As an editorial in the Bee notes, “Alarmed by local sales tax hikes on sugary drinks in Berkeley, Oakland and San Francisco, the beverage industry this year threw its weight – and about $7 million – behind a November ballot initiative that would dramatically raise the threshold for local tax measures. That in turn has alarmed local governments, including the city of Sacramento.”

The initiative, pushed by the beverage industry, “would ask voters to require a two-thirds supermajority for approval for any new local tax, tax increase or tax extension. If voters approve, the proposed constitutional amendment would be retroactive to Jan. 1, 2018, wiping out any local tax approved this year with less than a two-thirds majority.”

The Bee writes, “That means revenue for all sorts of local needs would go by the wayside in California, just so the beverage industry can get a reprieve from pesky public health efforts to limit the obesity, tooth decay and other ills linked to sugary soda.”

The Bee editorial notes: “Compromise is an art, we suppose, and Big Soda’s sweet deal is probably worth the trouble its initiative would otherwise cause cities. But make no mistake: This preempts a public good to line an industry’s pockets.”

So how would this impact Davis?  It would be the end of efforts for a soda tax for the next 12 years, for one thing.  That’s bad news for those who believe that this represents a public health threat.

The good news, though, is it means that the both the city and school district could seek citizen initiatives that would have majority-vote parcel tax allocations on them.

If that’s the case, Alan Fernandes will have a lot more time to consider a parcel tax that could be put on the ballot.  There are advantages to waiting, and the biggest is that, instead of having maybe three weeks to collect 6000 signatures, he could put the measure on for a special ballot next spring and have a full three months to do it.

It would also allow the school district to pass its facilities bond separate from a potential $350 a parcel tax, making the passage of both more likely.

It seems a foregone conclusion then that this deal will happen.  We should find out for sure by the end of the week.

—David M. Greenwald reporting


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  • David Greenwald

    Greenwald is the founder, editor, and executive director of the Davis Vanguard. He founded the Vanguard in 2006. David Greenwald moved to Davis in 1996 to attend Graduate School at UC Davis in Political Science. He lives in South Davis with his wife Cecilia Escamilla Greenwald and three children.

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56 comments

        1. Yes. I wrote: “The good news, though, is it means that the both the city and school district could seek citizen initiatives that would have majority-vote parcel tax allocations on them.”

    1. “It never should have been more difficult” is another way of looking at it… 50% +1 is an old concept… ~67% is relatively new… promoted by a huckster, and his partner, a miserly opponent of anything “government”… met Jarvis… nice guy, personable… knew how to use that… yet, was not an ideologue… Gann was another matter…

      Gann reminds me of another, in “real time”… the ‘another’ may also be channeling Jarvis, except for the “nice guy” part…

  1. No one will admit it but the sugar soda tax is not really a “pesky public health effort to limit the obesity, tooth decay and other ills linked to sugary soda.” but another regressive tax by the government that steals even more money from the poor, unhealthy and and uneducated” (who buy most sugary soda).  If the city really wanted to “protect” kids from sugary soda they could ban the sale of the stuff within the city limits (but would no longer get the extra cash from all the families that have a 2L bottle of soda on the table at every meal).

    1. And, “it’s great when a minority can run (or ruin) things”… but, exemptions from taxation from those who vote for taxes is a concept that I have clearly, repeatedly, opposed, as well…

      Taxation without representation is wrong… representation without taxation is equally questionable… related to taxes…

    2. Since homeowners already pay so many parcel taxes we should think about a “renter tax” to share the pain where everyone renting in town has to pay an extra $1K a year next time the city needs cash to give more raises.

        1. Most 100 unit apartment buildings are on a single parcel so we might have 400 renters paying the same “parcel” tax as a single 40 year old guy that owns his own small home in East Davis.  Just like a guy renting his home has the option to pass the cost of the parcel tax on to his tenants, people renting will have the option to pass the cost of the tax on to their employers (or parents if they don’t have jobs).

  2. I remember commenters on here saying that the 2/3’s rule was what made a parcel tax fair.  Well, what do those same commenters feel now if this new law passes?

    1. I’ve always believed that your vote should not count for twice mine.

      There is no new law here. The Soda Industry sold you out in order to avoid having the soda tax.

  3. For a school parcel tax we already have many who don’t have to pay.

    Renters, seniors, those on ss disability, those living in assisted housing, and possibly people working for the school system if a new law takes effect and our local schools decide to go that route.

    Homeowners are way outnumbered.

    1. (1) Homeowners are not necessarily the only ones to pay the parcel tax
      (2) Eligibility to pay a tax is not a requirement for enfranchisement
      (3) Your vote shouldn’t count twice mine regardless of your rationale
      (4) Homeowners may be outnumbered numerically but probably not in the actual vote totals

      1. (5) This is article about the Soda Industry black mailing local governments that they will make it much harder to raise local funding unless they remove the possibility of a soda tax from the table.

    2. The exemption issue is completely unfair. Has anyone explored deferrals, that is pushing the tax until the property is sold, instead of outright exemption?

      Kind regards,

      Jim

      1. I can’t believe that Jim has not pointed out that the “mobile” homes in Davis (and outside the city limit in the school district) are on “pads” not “parcels” and unlike the “non mobile” homes in the area do not pay individual “parcel” taxes.  If the seniors in Rancho Yolo vote for every parcel tax they don’t even have to take the time to fill out the paperwork for an exemption like all the other seniors in town that live on standard “parcels” in “non mobile” homes who vote for the taxes they don’t personally want to pay.

        1. I did point out in a note directly to Alan that this would be a good time to pass a supplementary parcel tax that would keep the current rate but eliminate the exemptions, at least in the city of Davis. Since most people would not be paying higher taxes and and with a lower bar it would establish the principle that since seniors are the biggest beneficiaries of the parcel tax they should pony up.

          Once the City of Davis one passes next year we could have another one that would apply to all DJU. Since most seniors live in the city and would be paying it regardless it would likely get the two thirds. Sometimes you need to do things stepwise.

    3. Renters *do* bear these costs (or at least some of these costs) in yearly rent increases that take into account any new parcel taxes and other similar costs incurred by the owner.

        1. if one lives in a 100 unit apartment complex the entire parcel tax for all 100 units is the same as the poor slob that owns a single unit house.  So do you really think it’s fair that the 100 units in all only pay the same tax as a single unit house?  That’s the law when it comes to a school parcel tax.

        2. And under this new tax a $1.5m house in El Macero will pay 0$ while cottage in East Davis will pay full boat. Unless the person in it is “special” enough to get a pass on paying taxes.

        3. “So do you really think it’s fair that the 100 units in all only pay the same tax as a single unit house?”

          You can thank Granda for that, although I also blame the school district for not fighting it in court.

        4. I disagree.  I would say it also matters that we don’t have control over what the law is at this point.  You’re complaining that something isn’t fair – well it’s not – but the alternative is considerably less local funding for schools and it’s not like they have another local way to fund education.

        5. So the schools and the city keep coming back for more.  Where does it stop?  When are homeowners, you know the ones who actually have to pay, going to get tapped out?

        6. It stops when we adequately fund our priorities.

          The schools have one way to fund educational programs and it’s a patently unfair way. The city has more flexibility. But we can’t even fund basic infrastructure needs and efforts by the state have led to a mini-tax revolt.

  4. If voters approve, the proposed constitutional amendment would be retroactive to Jan. 1, 2018, wiping out any local tax approved this year with less than a two-thirds majority.

    Fernandes believes that if Davis voters approved this proposed, then it would survive a legal challenge on the issue of retroactivity if the state proposition were also to pass.  I’m not knowledgeable enough on legal issues to understand how that would work.

  5. David:  “The soda industry sold you out in order to avoid having the soda tax”.

    It’s the politicians who agree to such things, who “sold us out”.

    Someday, perhaps parents will actually pay for the cost of their own kids (instead of asking others to do so).  (Yeah, that same principle would apply to old folk – including funding for social security.)

    However – having kids is a choice; getting old is not.

    1.  … having kids is a choice; getting old is not.

      Actually, there is a choice there… Anthony Bourdain, and others have so chose.   Their own choice… we can always choose… I choose to grow older… others may not support that choice, but “ef” them…

      And, to be technically correct, having sex is a “choice”… the “having kids” part is a possible ‘consequence’… and, there are “choices”, even in that regard…

    2. Just getting to this now… holy wow!

      So Ron apparently doesn’t support public education. Doesn’t appear to understand that the survival of the species depends on people mating and procreating. Kind of find this a little telling if his words are to be taken literally here.

      1. “Holy wow!”, or “wholly wow!”?…

        “Holy” generally implies a belief of a divine presence/existence… the other term does not… either term  could fit with your comment… clarification? [Not expecting one]

      2. David:  When there’s a “shortage” of new people (worldwide), let me know. Last time I checked, the population was still growing worldwide (on a finite planet). (For some reason, even environmentally-minded groups avoid talking about that.)

        Until the population stabilizes, the “procreators” aren’t doing the world any favors (to say the least).  And, expect others to pay for their choice, apparently. (In more ways than just parcel taxes, for schools.)

        Howard: It’s not about “me” (or “you”).

        I’m curious regarding what the book is about, that Jeff mentioned.

        1. Hopefully, Ron, given your views mean you have not “procreated”… would give you a ‘moral imperative’ if you haven’t…

          On my Dad’s side, my grandparents would have had two kids (replacement, which they did) and their children would have had two each (replacement)… so, a total of four… there was one… what has your family done?  Are you part of the “problem”, as you see it, or part of the “solution”?  Think on that…

        2. Howard:  I don’t tend to view issues like this in a personal manner.

          In any case, here’s a pretty interesting, recent article from the Enterprise, regarding the failure to acknowledge the impacts of continued population growth:

          https://www.davisenterprise.com/forum/opinion-columns/per-capita-davis-the-elephant-in-the-room/

          From the article/column:

          “It’s impossible to ignore population growth as a major driver of the climate crisis. So why the silence? Why do we ignore the elephant in the room? Why is it not front and center in every policy discussion?”

          I’ve been very disappointed in some environmental groups, for failing to acknowledge this issue. Enough so that I don’t even want to be associated with some of them, anymore.

          Although this has drifted from the primary topic, I would argue that our culture has essentially viewed those who have children as if they’re (literally) on a “mission from god”.  This underlying view probably even extends into our tax policies, in which non-parents are forced to help subsidize the costs. (And, that is related to the subject of this article.)

        3. Although this has drifted from the primary topic, I would argue that our culture has essentially viewed those who have children as if they’re (literally) on a “mission from god”.  This underlying view probably even extends into our tax policies, in which non-parents are forced to help subsidize the costs. (And, that is related to the subject of this article.)

          Is your position then that you shouldn’t have to pay to educate the children of others because you want to see population control, and others have acted irresponsibly by having children, and paying more for educating others is rewarding ‘bad behavior’?

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