Got taxes? Let communities collect revenue that California won’t

As California lurches once again toward major budget cuts, the state’s justice gap keeps getting wider. That’s the space between our promises of equality and opportunity and the reality on the ground for millions of people.

Even as the state’s wealthiest people have prospered, California has fallen to the bottom in delivering such basic things as decent schools, affordable homes and safe workplaces. Meanwhile, in Sacramento, a minority of lawmakers has refused to let Californians vote on whether to pay higher taxes to better support such things as education and the social safety net.

In the absence of such a vote, there is little that cities, counties and school districts can do. Under California’s Revenue and Taxation Code, only the state can impose or raise taxes on income, alcohol and vehicle licensing as a way of supporting crucial services.

Giving the state sole authority over most taxes was supposed to simplify our tax system. But in reality it has made it easier for a handful of politicians to block spending on programs they don’t like and for alcohol, tobacco and oil companies to successfully lobby against new or higher taxes. As a consequence, California, which used to be among the top states in per-pupil spending, has fallen to 47th in the nation, according to Education Week. Public infrastructure has suffered and state services to the disabled, the elderly and the impoverished have been slashed.

We need a new deal: If state government is failing to fund basic services like top-quality schools for all, it should get out of the way and let local residents fill the gap temporarily.

A new bill proposed by state Sen. Darrell Steinberg (D-Sacramento) would end the state’s monopoly on many taxes and allow cities, counties and school districts to impose additional taxes on such things as cigarettes, vehicle registration, alcohol, oil production and income. These higher taxes could not be imposed without voter approval.

The bill, SB 653, makes sense. It would allow communities to vote on raising their own taxes to supplement state spending on services they consider important. And it would help end the boom-and-bust budget cycles that have paralyzed public services.

Here’s what could happen under SB 653:

Angelenos could vote for supplemental school funding to make our schools great again. Today, Los Angeles public schools are near the bottom in state rankings, particularly those serving students of color in working-class neighborhoods. Last year, some struggling schools lost more than half their teachers in layoffs as the Los Angeles Unified School District struggled to close a budget gap. And this year, thousands more teachers have received notice that they may be laid off.

In the hands of a dynamic new superintendent, extra funding could help Los Angeles schools deliver a high-quality education for every student. That’s what already happens in wealthy school districts in places like Newport Beach or Santa Barbara, where higher property tax revenues help retain top teachers and pay for the kind of arts and music programs that Los Angeles had to abandon long ago.

Residents of local cities and counties might also vote to attack the housing crisis. Millions of Californians are homeless or live in substandard housing, and California lags way behind in creating new, affordable homes. Voters could, if they wished, raise taxes to address housing needs.

Or county residents might decide to support child care for working parents with young children. Studies show that child care is critical to getting people back to work. But last year, Gov. Arnold Schwarzenegger vetoed aid for working parents as they move off welfare. An emergency lawsuit has kept the program in place, but its continued funding remains in jeopardy in our current fiscal crisis. A county like Los Angeles or Riverside with high unemployment could pass a child-care stimulus program to supplement state funding. That would be good for parents and for our economy.

Groups like ours have gone to court to protect programs that close the justice gap. Over and over, we have won temporary relief to what are really permanent problems.

Right now, the state imposes tight restrictions on what local residents can do. Property taxes are strictly regulated, and sales tax rates are set at the state, with cities allowed to deviate by only 2 percentage points from the state baseline. Municipal bonds, often used for school construction, roadwork or other major improvements, can’t be used for ongoing costs.

SB 653 would push government to be creative and entrepreneurial, and it would make local leaders accountable to taxpayers for the services that matter.

Critics on the left will attack the bill because wealthier cities and counties might be better able to take advantage of the proposal, but this misses the bigger picture. If the state won’t step up to help them, local residents need tools to make their lives better. The legislation won’t eliminate inequities, but it could help some California communities gain ground.

Hernán D. Vera is president and CEO of Public Counsel.