Oakland Taxpayers Not Willing to Pay for City's Mistakes

Proponents of taxing California's residents into oblivion, including the news media and the political establishment in Sacramento, are reportedly heartened by the successes of recent local tax initiatives around the state. With 40 of 53 measures to increase or extend taxes, fees, or bonded debt passing in cities, counties, and school districts statewide, the thinking goes that Jerry Brown's plan for some unspecified tax hike at the state level just got a shot in the arm. Yet the latest news out of Oakland should give Brown and others something to think about.

If you haven't been following events in Oakland these days, here's what you missed: a $58 million budget gap, which was closed by a comically dishonest accounting maneuver; the resignation of the police chief amidst conflict with Mayor Jean Quan and the challenges of implementing Jerry Brown's "prisoner realignment" plan with a shrinking force; and turmoil in the mayor's office following the police department's aggressive response to the Occupy Oakland protests. In other words, you could say Oakland has troubles. But the city had a plan for fixing its woes: higher taxes. Measure I, the so-called "fiscal emergency parcel tax," was an $80 tax intended to fund a broad range of city services while giving Oakland time to sort out its finances. Of course, given the city's history of spending money it doesn't have, one could forgive the voters for being skeptical that the new money would actually end up going to public services. And according to the Oakland Tribune, the contentious bill went down to defeat, along with a measure to give the city more time to fund its police and firefighters' pension fund.

While we don't necessarily agree with their premise, many Californians are okay with voting higher taxes on themselves, but most would insist that certain conditions are met. Specifically, they want the money directed at concrete public services rather than vanishing into broadly-defined slush funds, and there is a point at which voters will consider taxes too high. It's not certain what sort of tax plan Brown will ultimately propose, but Sacramento faces a serious credibility problem on both of these fronts. California has an unfortunate history of finding new ways of spending tax hikes, rather than shoring up existing programs, and lest we forget, Brown is planning on a massive increase in spending next year. And yes, the Golden State continues to have the most regressive tax structure in the nation, meaning that any broad tax increase at a time of 12% unemployment will be deeply unpopular. So, while Californians are often receptive to public provision of services and the taxes that pay for them, the developments in Oakland suggest that this may not translate into the blank check that Brown likely wants.