Voters Increase Tax Burden With at Least 58 Sales Tax Increases, 29 Parcel Taxes and 151 School Bonds

In local elections held in California on November 8, voters approved 58 sales tax increases at the city or county level that cumulatively will cost taxpayers more than $700 million annually.

An additional 16 sales tax measures currently are too close to call under CalTax’s criteria of measures within 3.5 percent on either side of the vote requirement. Included in that category is Measure M, the Los Angeles County Transportation Tax Measure, a two-thirds vote measure that currently has 69.82 percent of the vote. Measure M alone would cost taxpayers $860 million annually. All totaled, the 16 “too close to call” sales tax measures could cost taxpayers an additional $1.1 billion annually.

Only 15 sales tax measures failed.

CalTax has compiled the results of the more than 420 local tax and bond measures on the November 8 ballot, linked here. (CalTax: Due to incomplete or inaccurate information provided by a few California counties, CalTax’s pre-election report on local tax and bond measures omitted three sales tax measures, one hotel tax measure, and two school bond measures. Those measures are included in the table linked above.)

Parcel tax measures were less successful: 29 passed, 21 failed, and another 11 currently are too close to call. The parcel tax measures that passed will cost property owners an additional $219 million on their property tax bills, with another $15 million possible if the “too close to call” measures all end up passing.

Of the nine measures proposing changes to local utility users taxes, including “modernization” to expand what types of technology and utilities are taxed, five passed.

Travelers to some parts of the state will see a spike in their hotel bills, as voters approved 13 hotel tax increase measures and defeated just five. Another four are too close to call. Most notably, both of the competing San Diego hotel tax measures were soundly defeated, including one that would have funded construction of a new downtown stadium for the Chargers football team.

An “entertainment admissions tax” in Pacific Grove was soundly defeated, as only 23.68 percent of voters favored the measure, which would have imposed a 5 percent surcharge on admission to entertainment and recreational activities in the city, including the world-famous Monterey Bay Aquarium.

With the idea of legalizing recreational marijuana high in everyone’s minds at the state level, local voters joined in by approving 31 measures that will tax various aspects of medicinal and recreational marijuana business operations. Only four marijuana tax measures failed, and two are too close to call.

On the bond front, seven municipal bond measures passed, three failed, and four are too close to call. Among those that passed were a $3.5 billion bond in the Bay Area to fund improvements to Bay Area Rapid Transit, and a $1.2 billion bond in Los Angeles to address the city’s homeless population crisis.

Passage of school bond measures once again was nearly automatic, with 151 bond measures passing, and only five failing. Another 24 are too close to call, but most are leading in the preliminary results. The school bonds that passed or are likely to pass are worth more than $21 billion combined. These bonds will be repaid – with interest – through property tax increases in the areas that approved the measures. A majority of the school bond measures that passed easily exceeded the 55 percent vote threshold, with many receiving upward of 70 percent, and sometimes 80 percent, of the vote.

Passage of local tax measures is aided by the fact that the entities that put the measures on the ballot also write the ballot language, and often skew the wording to encourage a “yes” vote. In several documented cases, local governments also used government resources to campaign for their tax measures, under the guise of “informational” campaigns.

November 10, 2016

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