One Man Drives L.A. County Nuts : Lobbyist Gonsalves Seeks More State Money for 11 Cities

SACRAMENTO —  As he stood in the corridor outside the state Senate chamber, wearing his neat blue blazer, speaking in a soft, gentlemanly voice, Joe Gonsalves did not look like the man who has been driving Los Angeles County nuts.

But that is just what he has been doing since the early 1970s, first as an assemblyman and now as a lobbyist for 11 small cities in the county, most of them the flatland municipalities in the urban and suburban sprawl south and east of downtown Los Angeles, all of them convinced that they are being financially abused by county government.

As an assemblyman from the dairy land that became the suburban city of Cerritos, Gonsalves won passage of a controversial 1974 law that limits the amount of money the county can charge for providing county sheriff’s deputies to cities that have no police departments of their own. County officials are still angry over that, but they have not been able to have the law repealed.

One day last week, Gonsalves was waiting for the results of a Senate debate on legislation that would require Los Angeles and other counties to share property tax dollars with small cities that have no property taxes of their own. Because Los Angeles County fears a loss of about $40 million and has joined with other counties to kill the bill, the issue has become one of the Capitol’s hottest fights. A final upper house vote may come this week, and Assembly approval is also needed.

“It’s not an everyday stroll in the park,” said Gonsalves, referring to the fury of the battle.

Fiscal Restructuring

The bill has its roots in the state’s post-Proposition 13 fiscal restructuring and in the peculiar, haphazard nature of local government in Los Angeles County.

In the years after World War II, many small cities were incorporated in the suburban and industrial areas developing rapidly in the San Gabriel Valley and in the flatland south of downtown. Some, like City of Industry, were created to provide low-tax, sheltered areas for business. Others were incorporated to provide zoning protection for residential areas because of fears that remote county supervisors would wreck neighborhoods by allowing factories, huge apartment developments or other projects that would ruin suburban ambiance.

Many of the new city fathers pushed through their incorporations by promising local voters freedom from city property taxes, pledging to use sales taxes to keep the new cities running. That allowed the council members to brag to voters in cities such as Carson that their municipalities were free from the unpopular property tax.

The boast was not entirely correct. Residents still needed services and still paid property taxes.

They obtained services from other levels of government. Some were special districts created to provide libraries, fire protection and other services. These were financed by property taxes levied by the districts and collected by the county. Some cities, rather than set up police departments, signed contracts to pay the county for the sheriff to keep the peace. Residents of the so-called “no property tax” cities also paid for this indirectly through other taxes.

The result was a hodgepodge of governmental agencies providing all sorts of services.

Proposition 13 reduced the amount of property taxes levied by the county, the cities and the districts. County officials continued to collect the limited property tax and divide it among the county, special districts and cities, such as Los Angeles, that levied a municipal property tax. The pie was much smaller and, to make up for the lost revenue, the state vastly increased state aid.

The new money, however, went only to government agencies that levied property taxes. The city of Los Angeles, for example, received substantial state help. Cities that levied no tax, such as Carson, received no aid.

The Carsons of the county were angry. As the lobbyist for many of these cities, Gonsalves prepared legislation that would give them part of the property tax pool.

Gonsalves and the cities he represents have become small centers of political power. Los Angeles County is so big, and has so many elected representatives--local, state and national--that state legislators are largely anonymous. To get support, they must put together backing from whatever local institutions are available. Small city institutions--city councils, Rotary and Lions clubs, local newspapers--give them a way of connecting with voters indifferent to far-away Sacramento.

Governmental Background

Gonsalves comes from those local institutions. He was a council member and later mayor of Dairy Valley, the dairy community that became the residential city of Cerritos. As a state legislator, he was appointed to a board that doles out state money for new construction and obtained funds for his home town. An elementary school in Cerritos was named for him in gratitude.

As a lobbyist, Gonsalves organized local politicians to lobby their state legislators.

By the time the property tax bill came up, he had built a substantial lobbying network.

He made the case that the small cities were adding to overall county property tax collections by developing new subdivisions and industries. “If Paramount puts in a new subdivision (boosting overall county property tax revenue), they get no property tax money from it,” he said.

Los Angeles County fought back, as did other counties that would lose money, including Contra Costa, Ventura, San Bernardino and Riverside. They hired prominent lobbyists to supplement their advocates. They battled Gonsalves to a stalemate, and the two sides agreed on a compromise.

It was, as critics pointed out during a Senate debate last week, not necessarily fair to everybody. A new source of revenue was tapped--motor vehicle registration fees.

Vehicle Depreciation

Under present laws, the state, in setting registration fees, reduces the value of vehicles each year. For the first two years, the state assesses a 2% fee on 85% of the value of the vehicle, then the value is depreciated and the fee goes down.

Under the compromise, the state would assess the 2% fee on 85% of the value for three years. State revenue would be increased by between $160 million and $200 million.

During the Senate debate, critics called this a tax increase and said that motorists in other parts of the state would be taxed more to help Los Angeles County’s small cities. Proponents denied that it would be a tax increase, saying the present depreciation formula does not reflect true value of vehicles, especially some imported autos that hold their value for many years.

Although drivers may be angry, Gonsalves and his foes--Los Angeles and other counties--are happy. Under the compromise, Los Angeles, Contra Costa, Ventura, and San Bernardino counties would get part of the new money to pay their small cities.