Pollution tax storm heads for L.A. County
This is Part 1 of a three-part series
Dec. 3, 2012
By Wayne Lusvardi
The tax climate forecast for Los Angeles County has turned gloomy. There is an $8 billion annual tax storm that is coming in 18 months. It will rain on every property owner in the county.
But the tax monies will mainly flow to a few politically connected groups and unions. To comply with new state law, the Los Angeles County Department of Public Works is proposing an annual parcel tax of $8 to $83 per single-family home.
Big box retailers will get a tax bill for $15,000 per year, in addition to their existing property taxes. And commercial properties in downtown Los Angeles on impervious clay soils will get socked with a $200,000 added tax per year for storm water capture projects.
The parcel tax is being called necessary to comply with unfunded mandates of the federal Clean Water Act to prevent the downstream pollution of flood control outlets to beaches and artificial recreation lakes along flood control channels. However, in 2010 the California Legislature enacted its own storm water cleanup law only for Los Angeles County, Assembly Bill 2554.
The remainder of the state has no such law. This tips off voters that the real intent of the legislature is to create green jobs in L.A. County’s distressed unincorporated areas, which overlap the watershed area zones in the county’s storm water capture program.
Los Angeles County is complying with this new state law with its “Clean Water — Clean Beaches” Measure. However, calling it a tax “measure” is a misnomer because there are no suitable limits or control mechanisms on how much would be spent under the current law.
Green Jobs Program Disguised as Storm Water Cleanup
On Nov. 9, the Los Angeles Regional Water Quality Control Board passed Municipal Separate Storm Sewer System Order MS4. It requires all 88 cities in the county to develop storm water clean up projects within the next 18 months.
The proposed $5 to $8 billion project will mandate that property owners pay a flat parcel tax unconnected with the market value of their property (not ad valorem or added value tax). The tax is purportedly for many water detention basins to be constructed in unincorporated watershed areas and in each city instead of on a regional basis as they are today.
Fifty percent of the $8 billion in taxes will go to nine unelected watershed groups in the following watersheds to divvy up the proceeds for green jobs: Ballona Creek, Dominguez Channel, Upper Los Angeles River, Lower Los Angeles River, Rio Hondo, Upper San Gabriel River, Lower San Gabriel River, Santa Clara River, and Santa Monica Bay watersheds.
The Dominguez Watershed isn’t even a watershed, as it is supplied by imported treated water. In other words, self-dealing tax lobbying groups will get half of the taxes and unelected regional forms of government will circumvent elected representative government.
The stated purpose of creating Watershed Groups is to provide jobs to residents in unincorporated areas with high proportions of low-income households. Funding shall be in the same proportion as the fees collected in each watershed area. The watershed groups will also constitute an additional layer of unnecessary government.
Los Angeles County Watersheds
Anticipated controversial features of the proposed storm water parcel tax law include:
1. Forty percent of the tax proceeds will go to cities within the boundaries of the watershed district and to the County of Los Angeles for undefined water quality projects. Funding shall be proportional to the funds collected in each city.
Cities can also form Watershed Groups if they choose to do so. Ten percent of the tax proceeds will go toward planning and administration costs of the County Flood Control District. The 50-40-10 funding allocation of AB 2554 seems to be double the cost alternative to implement the project. Stated differently, only about half the $8 billion in taxes would probably go toward actual storm water cleanup facilities. The other half would go to unneeded artificial jobs programs.
2. Watershed Oversight Boards shall be created under Section 18.10 of the proposed County storm water ordinance to be composed of water quality experts drawn from academia, professional societies, and non-governmental agencies. In other words, a coalition of experts and alleged victims of water pollution shall be allowed to align against middle class taxpayers who will have to pay for the bulk of the tax.
3. The Flood Control District will be granted the power of eminent domain and be able to issue bonds backed by the tax revenues.
4. Sec. 2, Article 15 of the authorizing law grants power “to preserve, to enhance and to add recreational features to its properties.” The central mission of the county’s storm water program is to “promote the creation of green jobs.”
In other words, this will be another grab of money for green jobs programs and parks and recreation projects under the pretense of cleaning up contaminated water sources. The Santa Clara River Watershed is mostly in a natural state and is 57 percent open space and national forest.
5. There is no consideration in the tax for rainfall zones. Those who live in moderate rainfall zones — such as Long Beach — will be taxed just as much as those who live in, say, Pasadena and Altadena, located in higher rainfall zones near the San Gabriel Mountains. Pasadena gets 21 inches of rainfall on average each year. This is eight more inches of rainfall than Long Beach, which gets about 13 inches. Palmdale in the Santa Clara River Watershed gets about 7 inches of rainfall on average.
6. Section 18.02 of the County’s proposed ordinance specifies a minimum tributary area of at least 100-acres in size (reflecting an area of about 350 homes). This suggests that storm water catch basins will be from 1-acre to 10-acres in size, depending on the imperviousness of the soils and the depth of the constructed basin.
A one-acre catch basin would take about four residential lots in land area; a 10-acre catch basin would take about 43 urban lots in area. It will be difficult to find one to 10 acres of available land, except possibly existing parkland in critical catchment areas. A depressed area of a park can doubly serve as a catch basin.
But then this may raise the issue of creating toxic dumps in parks where children play. So privately owned lands will be more desirable. For example, a small 5.76-acre drainage area in urban San Diego required a 0.11-acre catch basin, which is about the size of one typical residential lot (65 feet by 110 feet). The County’s 100-acre drainage areas would be at least 900 times larger and thus might have to take 900 residential lots (all engineering aspects considered the same).
7. Assuming an average home price of $350,000, a one-acre catch basin would result in about $1.5 million in property acquisition cost and $15,000 in lost tax base per year. A 10-acre catch basin would reflect $15 million in property acquisition cost and $150,000 in lost tax base per year. Taking vacant commercial land for catch basins would be about three times more costly and thus would reduce the tax base about three times greater.
8. There is no provision in the law for a tax appeal on the grounds that a specific property has no rainfall runoff as can be certified by a civil engineer.
9. A major source of bacterial contamination has been shown to be wet decaying vegetative material in roof rain gutters and street gutters. City street trees are one of the main sources of this contamination. Deciduous ficus trees, with their shedding berries, seeds and leaves, are one of the worst offenders.
By contrast, evergreen trees and oak trees with waxy leaves and magnolia trees are examples of trees that shed fewer leaves but still provide a shade canopy. Yet there are no projects proposed to reduce high-leaf shedding trees in storm water cleanup programs and replace them with trees that shed less.
And there is no provision to file for a tax exemption on the basis that a property owner has obtained a certificate from a third-party rain gutter maintenance company that their gutters have been cleaned annually (just like homeowners comply with brushfire weed abatement mandates).
10. If the L.A. County Board of Supervisors voted to pass the storm water tax, then it would mail a ballot to every property owner in the county. This would comply with the requirements of Proposition 218 for voter approval of any tax increase. All property owners of public record would receive ballots. The Board of Supervisors may consider rejecting the tax if they receive a petition opposing the tax from 51 percent of property owners — which is unlikely due to cost and logistics.
11. There is no provision in the county’s law of long-term funding for the maintenance and removal of toxic substances that will accumulate in each storm water retention basin.
12. The county’s tax formula calls for higher taxes on properties with impervious soil where the water cannot percolate into the water table.
|Property Type||Annual Stormwater Parcel Tax|
|Single family residence||$54|
|7-11 convenience store||$300 to $400|
|Big box retailer (15 acres)||$15,000|
|Commercial building in downtown Los Angeles with high clay soil content||$200,000 or more|
|Sources:1. http://www.presstelegram.com/breakingnews/ci_22058804/l-county-proposes-water-fee-all-parcels-clean2. http://geosyntheticsmagazine.com/articles/0410_pan3_stormwater.html|
In Part 2 of this series, a market alternative will be proposed to the big government jobs program and the tax and land grab of the county’s storm water parcel tax. Part 3 will update the legal issues of the proposed storm water tax now pending for a hearing by the U.S. Supreme Court on Dec. 6.