The Los Angeles County Board of Supervisors voted to place on the November ballot a tax measure to fund a stormwater runoff system in an effort to save and clean water. The tax applies to both business and residential properties but government buildings, public schools and non-profit organizations are exempt. That’s standard procedure but you have to wonder if the push for taxes—any taxes– would be the same if every organization would have to dedicate a portion of its budget for taxes.
The theory for the exemption is that the services provided by the tax-exempt organizations would be reduced if money would go for taxes. In the case of public entities the money would come from the taxpayers anyway. That is not true for non-profits.
The same theory of reduced effects could apply for goods and services that businesses produce for public consumption or leaving more money with homeowners to spend in the economy.
Our tax system is set up to exempt government agency property and non-profits from taxes. The stormwater tax is on property and the Los Angeles County assessor carries a list of Institutional Property Tax Exemptions.
There have been attempts to exclude non-profits from tax exemptions. The governor of the state of Maine proposed such an idea a few years ago in an effort to lower residential property tax.
No one in California is making an issue of taxing non-profits or government property but it would certainly change the dynamics of a tax debate if they were included.
As to the stormwater tax itself, according to the supervisors the 2.5 cent tax for every square foot of land shedding water would only apply to impermeable areas such as concrete, roofs and sidewalks. This includes the roofs of houses. The tax would be calculated for every single parcel based on an aerial survey using special equipment. What could go wrong with such a measuring system?
The measure will raise an estimated $300 million per year.
Supervisor Sheila Kuehl, Chair of the Board of Supervisors, who pushed for the tax measure said, “Every year a full 100 billion gallons of water run down our curbs and out into the ocean. We have to get water-wise. Extreme weather is our new normal and recurring cycles of drought are a reality. We need smarter ways to capture, clean and store stormwater, so we can increase our local water supply, clean that water, and save it for future use.”
Segments of the business community opposed the measure. The Los Angeles County Business Federation (BizFed), while agreeing that dealing with stormwater runoff was a necessary objective, opposed the Supervisors’ measure as a “forever” tax. “The tax is supposed to solve a specific problem, and theoretically, when that problem gets solved we shouldn’t continue to be taxed for it,” BizFed CEO Tracy Hernandez said.
The special tax requires a two-thirds vote to pass. It is expected other local taxes will be on the same ballot, which could hurt its chances of passing.