Local Taxes

State Penalizes Los Angeles County $1.3 Million for Dispute Over Campaigning With Tax Dollars

Downtown Los Angeles

The Fair Political Practices Commission, which is responsible for enforcing California’s campaign finance and disclosure laws, unanimously approved a $1.35 million penalty against Los Angeles County on August 20 after investigating claims that the county used public funds to campaign in favor of a sales tax increase. CalTax submitted a letter to the FPPC urging the agency to approve the penalty.

LA County Department of Human Resources

The county paid a political consulting firm approximately $1 million for a “communications plan” that included radio, television and online ads (pictured, left) for Measure H, a sales tax increase on the March 7, 2017, special election ballot. The ads featured the slogan: “Real help. Lasting change.” The communication focused on programs that would receive the tax dollars, under the banner “Measure H Helps,” but did not include any information about the regressive nature of a sales tax or the negative aspects of a tax increase estimated to cost taxpayers $3.55 billion over 10 years.

Under state law, local governments are allowed to spend tax dollars on communications that describe proposed taxes to voters in neutral terms. The style, tone and tenor of the communications are to be considered.

The FPPC’s Enforcement Division opened two cases, alleging that the county’s activities were advocacy, which qualified the county as a political campaign committee and triggered the Political Reform Act’s filing and disclosure requirements. The county failed to include advertisement disclosures.

The Howard Jarvis Taxpayers Association sued with similar allegations. All parties agreed to resolve the matters with a joint settlement that includes the FPPC penalty but does not include any admission of wrongdoing by the county.

FPPC Commissioner Brian Hatch expressed frustration with the county’s failure to admit wrongdoing.

“Does this mean they will be back before us, if they don’t think they did anything wrong?” Hatch asked. “This is an important first step … but it sure seems like if they don’t think they did anything wrong, they’re probably going to do it again.”

Observers noted that the county’s taxpayer-funded advertising likely was instrumental in the passage of Measure H. As a special tax to fund programs related to homelessness, the measure needed at least two-thirds of the vote to pass, and it cleared that threshold by just 2.68 percentage points.

Examples From the Current Election

As CalTax noted in its letter to the FPPC, many local governments have been violating the spirit and the letter of the Political Reform Act by spending tax dollars on campaign-style ads and mailers. The ads often include graphics and slogans designed to encourage a “yes” vote.

The “educational outreach” efforts typically use glowing terms to describe government spending and go to great lengths to avoid language that directly informs voters that the measure includes a tax increase.

Some examples of local governments promoting measures on the November ballot:

  • The Palo Alto Unified School District issued a “fact sheet” on Measure O, a parcel tax, that refers to the proposal as a “local measure to support advacned [sic] academics and a well-rounded education.” The document continues: “On July 7, the Board of Education voted unanimously to place a measure on the November 3, 2020 ballot to renew local parcel tax funding. If approved, this measure simply renews the existing parcel tax funding at the existing rate of $ 836 per parcel, adjusted annually for cost of living increases.” A more direct, neutral description appeared in the Palo Alto Daily Post: “Measure O will initially cost $836-per-parcel but will increase by 2 percent each year for the six years of its duration.”
  • The Carson City Council approved a “voter outreach” plan for a sales tax measure after a City Council member said: “My concern is if we don’t do anything, it’s going to fail … We need to do something.” The mayor voted against the spending, and said: “Comments like those just add credence to the notion this is an advocacy campaign and it’s not an educational campaign, and that’s the problem.”
  • A “fact sheet” on a sales tax measure in San Rafael begins not with details about the proposed tax hike that would cost taxpayers an estimated $3.4 million per year, but with this statement: “Maintaining Essential City Services. The City of San Rafael strives to protect the quality of life for all residents and to provide a safe, healthy, prosperous and livable environment in partnership with the community. Important priorities include safe neighborhoods, active community centers for our youth and seniors, emergency response services and providing social services to support our most vulnerable populations. These essential city services make San Rafael a desirable place to live, work, do business and retire.”
  • The Oakland Unified School District used its official Twitter account, Facebook page and staff time to post campaign materials produced for Proposition 15, the split-roll initiative.