Sensible Tax Criteria

CO$T’s Sensible Tax Criteria for Supporting or Opposing Specific Taxes and Fees

At CO$T, we advocate for sensible taxes and essential service fees – ones that are necessary, equitable, transparent, affordable, approved by popular vote during a statewide election period, and expire at some reasonable time. Appropriate taxes and fees contribute to our collective well-being. When possible, we work cooperatively and early with elected officials and community members in an effort to ensure all new/renewed taxes/fees meet a sensible standard.

Using our Sensible Tax Criteria as a guide for careful evaluation, CO$T opposes or supports locally important tax and fee proposals. In some instances we take a neutral stance when the pluses and minuses roughly balance.

CO$T evaluates proposed taxes and fees on the following specific criteria – and encourages voters and elected officials to do the same.

Necessary. Additional taxes/fees should enable important projects and essential services, preferably improving upon them – e.g., adding new teachers to lower class sizes.

Affordable. In order for people (both homeowners and renters) and businesses to afford to stay put, taxes/fees shouldn’t escalate faster than incomes. Currently, that means increases should not exceed 3% annually. The percentage increase of any escalator should be clearly stated in the summary language appearing on the ballot.

Alternatives exhausted. Our local governments should tap cost efficiencies and the multitude of newly passed state and local tax sources before seeking additional local taxes and fees to cover those same services. Districts and agencies should maximize grant opportunities.

Equitable. New and renewed taxes and fees should be structured to spread the burden as fairly as California law permits. Traditional flat parcel taxes (each property pays exactly the same amount, whether a studio condo or a large mall) hurt small property owners. CO$T strongly prefers progressive parcel taxes such as those levied per square foot of buildings (or, in the instance of school and park taxes, per dwelling unit). We encourage exemptions and discounts for seniors, disabled people, and lower income tax/rate payers.

Transparent. Voters deserve to be told the truth about a tax’s or fee’s proposed use. If more money is needed just to maintain current services or forestall cuts, say so! If the money will be spent on large maintenance or construction programs, voters deserve a detailed project list.

Accurately represented . Ballot language and promotional materials should clearly say what the money is for. If the tax/fee is promoted for a particular use, what are the guarantees?

Full disclosure. Words like “cost of living increase” should be clearly tied to a specific index — and not be used to describe annual increases of a predetermined percentage (e.g., 5%).

Reasonable sunset. Every tax should have a sunset date — and one that is tied to the projects it funds. For most sales and parcel taxes, 8-10 years is a reasonable maximum term; voters then have the opportunity to renew, cancel, or amend these taxes (which can be especially important if the tax/fee or what it funds is novel). Bond measures typically fund longer-lived construction; but to avoid unfairly passing these costs on to the next generation, new bond measures should not exceed 25-30 years.

Democratic vote as provided by California law. New and renewed taxes should conform to the intent of Propositions 13 and 218. Revenues from tax measures promising to fund special purposes – e.g., road maintenance – shouldn’t flow through the general fund in order to avoid prop 218’s requirement for approval by 2/3 of voters. CO$T opposes the use of “citizen” tax initiatives to end-run proposition 218’s requirements. CO$T opposes the use of a legislative super-majority to end-run the public’s right to a direct vote on new taxes. And CO$T opposes expanding which fees are exempt from prop 218’s restrictions.

Except in rare instances of extreme urgency, CO$T will automatically oppose any tax presented to voters at a time other than a statewide election.

CO$T urges jurisdictions, agencies, elected officials and community members to reach out to us early to seek feedback as they shape an upcoming tax or fee.