LA WATCHDOG - Over the next several years, we can expect the City and other local governmental entities to hit us up for billions through higher taxes, fees, and rates. Of course, the political establishment will have a song and dance show demonstrating the urgent need for these increases. At the same time, we must demand complete transparency into why the increases are necessary, that our money will be used efficiently, that we will be provided with updated information on a timely basis, and that there is independent oversight.
There are six increases on the horizon, and even more if the State and County want to dip into our wallets.
One. The City of Los Angeles will most likely be asking us to approve a second bond measure to finance the construction of permanent supportive housing for the homeless. The source of repayment is an increase in our property taxes. Approval of two-thirds of the voters will be required. The City has a lot of explaining to do since the cost of a unit of permanent supportive housing financed by the Measure HHH bonds was an astronomical $600,000. We also deserve to know the capital and operating costs of the City’s long-term plan for the homeless.
Two. The Sanitation Department is expected to ask for a hike in the Solid Resource (Trash) Fee that appears on our bimonthly DWP bill. The City will tell us that costs have increased significantly since the last increase in 2008, a legitimate claim, and that the General Fund has been subsidizing the Department’s pension and healthcare costs. While not subject to our approval, transparency is important given our lack of trust and confidence in the City Council.
Three. Sanitation will also be requesting an increase in the Sewer Service Charge that also appears on our bimonthly DWP bill. While this fee has not increased in the last two years, rates ballooned 77% over the ten-year period beginning in 2011. And like the Solid Waste Fee, the pension and healthcare costs have been subsidized by the General Fund. Again, transparency is paramount.
Four. Metro is once again considering a Congestion Tax which can range between a $1 and $10 billion a year. While our former mayor said it was about the traffic, not the money, Metro has developed a list of pet projects that will cost tens of billions. Again, transparency is vital, especially since Metro is one of the most inefficient, bloated, and corrupt government agencies and voter approval may be required. Metro already benefits from over $3 billion in sales tax proceeds.
Five. LAUSD has a “Structural Deficit” where future expenditures will exceed projected revenues. Its current operating deficit has been financed through billions in Covid related money, but this gravy train is about to end. As result, we are likely to see a ballot measure, most likely a parcel tax, to increase revenues by over $500 million, an amount that was requested by Measure EE in 2019. Measure EE was rejected by 54% of the voters but needed the approval of two-thirds of the voters. Given the poor test scores, the decline in enrollment, billions in retirement liabilities, militant unions, and poor reputation, transparency is a must.
Six. Over the next twelve years, our DWP power bills are expected to triple as the Department moves to generate electricity using 100% renewables. Unfortunately, the incremental cost of the last 10% to 20% is prohibitive, but this is not a concern of the City Council and the environmental community. Our water rates will also double or triple because of the high cost of recycled water.
It is too early to determine the annual cost of these six increases, but it is in the billions. And we justified demanding an open and transparent process, not only because it involves our hard-earned money, but because we do trust our City Council and the City Hall machine.
(Jack Humphreville writes LA Watchdog for CityWatch. He is the President of the DWP Advocacy Committee, the Budget and DWP representative for the Greater Wilshire Neighborhood Council, and a Neighborhood Council Budget Advocate. He can be reached at: [email protected].)