Commentary – Quentin Kopp

Taxpayers Foot the Bill Again

A wag once noted: “The only people who don’t have to pass the Civil Service exams to work for the government are taxpayers.” 

Last month, a lengthy Wall Street Journal article discussed the strangulation of many cities in the United States, citing the Gila River Arena in Glendale, Arizona, a Phoenix suburb, the location of the Arizona Coyotes of the National Hockey League where the coronavirus pandemic compelled cancellation of a concert, a professional rodeo, and National Hockey League games while the city continued to repay $10.7 million on arena bonds for 2020 alone. Glendale owes another $12.7 million for Camelback Ranch-Glendale, location of a spring training field for major league baseball, which closed last March. 

Another arena built with bonds repaid by local property taxpayers in Maryland Heights, Missouri for the NHL’s St. Louis Blues requires annual debt payment of $3.6 million, and the value of the bonds on the bond market has declined from 109 cents on the dollar in early March to 68 cents by May 21. Authorities in Jackson County, Missouri noted diminution of county tax revenue for debt payments on stadiums for baseball’s Kansas City Royals of the American League and the Kansas City Chiefs of the National Football League. 

The Oakland Athletics refused in April a $1.2 million rent payment to the taxpayer- funded Oakland Coliseum. That has since been resolved with a major break for Alameda County taxpayers by the proposed sale of the Oakland Coliseum by Alameda County and Oakland to the Oakland Athletics. Oakland is probably the worst-managed city in the Bay Area with high crime rates, disrespect of the law, and significant lack of creditworthiness. 

In 2012, a community athletics center and ice hockey arena in a Minneapolis suburb defaulted on debt payments, which incurred a reduction of its credit rating to junk and rendered borrowing expensive.

The foregoing recitation reminds me of the attitude of professional sports-team-owning billionaires that local taxpayers must provide stadiums for their professional sport businesses, an attitude that led the San Francisco 49ers to the City of Santa Clara, which succumbed to the false attraction of an NFL team, and the end of San Francisco taxpayer financing of a San Francisco Giants’ playpen. 

Understanding public funding rules and fundamental principles form a predicate for citizen views and public official decision-making. Besides today’s generational gap, too often private- and non-profit entities and officers demonstrate informational deficit, even ignorance of tax history. 

That’s true with Proposition 13, as exemplified by cries from teachers’ unions and others that it’s “outmoded.” Property taxation represents California’s historical means of financing, not state or federal government, but local governments, namely, cities, counties, school and special districts. Every tax should possess a rationale. 

Property taxes defray costs of general governmental services such as police, fire, education, public health and welfare, with the tax revenue comprising most of the entity’s general fund. Property taxes aren’t collected by the state, which relies mostly on state income tax and sales taxation. State law bars local government from imposing income taxes. Property taxation doesn’t support city streets or state or interstate highways, which should be funded by users through gasoline taxation. Of course, today’s fixation with electric vehicles and bicycles means those users pay nothing for city streets, county roads, and state and federal highways. Proposition 13 is as valid today for fixed income and pension homeowners as it was when it was passed in June, 1978. Residential property generates no owner income unless and until it is sold. Beware of the effort in November to change Proposition 13 and increase and create new taxes for San Francisco taxpayers.

The current fad and demand to remove statues in San Francisco and elsewhere was analyzed by the chancellor of Oxford University on BBC last month in commenting upon a student demand to remove a bronze statue of Cecil Rhodes as a symbol of “institutional racism” and “white slavery.” Oxford is the world’s second oldest remaining university. In San Francisco, we witnessed last month removal of statues of Francis Scott Key, President Ulysses Grant, and Father Junipero Serra. Oxford’s chancellor characterizes the student effort to obliterate the creator and payor of the now-called Mandela Rhodes Scholarships, utilized by such notables as President William Jefferson Clinton, as “murdering history.” 

He reminded his 22,000 students and us: “Education is not indoctrination. Our history is not a blank page on which we can write our own version of what it should have been according to our contemporary views and prejudice.” 

Discrimination at a university should be based upon intellect. Dostoyevsky observed: “Facts aren’t everything; at least half the battle consists in how one makes use of them.”

Quentin Kopp is a former San Francisco supervisor, state senator, member of the SF Ethics Commission  and retired judge.

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