Gov. Gavin Newsom’s call for withholding state funds—in this instance transportation money– from cities for not meeting their housing goals was wrong from the beginning. Newsom has now pulled back on that dictate opting for a carrot rather than a stick solution, at least temporarily. But it would be a terrible precedent, one that has been suggested before.
It felt odd from the get-go when Newsom announced in January that the state government was going to punish local governments for not following guidelines on housing. Odd because it came from an administration that tells the federal government on so many occasions that it has no intent to follow federal mandates and then files a lawsuit against the feds.
But while there are other issues at play in the federal-California relationship, there was one obvious situation that compelled Newsom to take a second look at the proposal to withhold transportation dollars—citizen trust in government promises.
I raised that concern in January when Newsom originally proposed withholding the gas tax funds recently signed by Gov. Brown and which withstood a repeal attempt in last November’s election:
The problem is the political establishment worked hard to defeat Proposition 6 by promising that road repairs would be made with the new tax dollars. Those promises of road fixes go beyond the dollars raised specifically by SB 1. Taxpayers would be rightfully indignant if they learn transportation revenue is withheld because of a squabble over housing, especially considering the heavily advertised campaign to promote transportation fixes we so recently went through.
Many Californians would see just another broken promise from government officials if all the rhetoric over the Proposition 6 campaign dedicated to promoting road repairs and transportation improvements would be wiped away by gubernatorial fiat.
Democratic legislators are joining the chorus indicating that withholding the gas tax money is breaking faith with the voters.
Assemblyman Jim Cooper said, “I think the voters do have a certain expectation that those funds be used for what’s promised, and now to change that mid-stream, that’s going to rub a lot of folks wrong.”
Senator Jim Beall who wrote the gas tax legislation, SB1 said, “Their use for any other purpose, such as to be used as leverage, is a violation of the trust of the voters and taxpayers.”
Instead of the stick of withholding funds, Newsom is now offering a carrot to local governments to hit housing goals in the form of $750 million for cities and counties to help housing production and reward building. But, he plans to revisit the issue in four years.
Unfortunately, the tactic of withholding state funds as a punishment is not new. Probably not too many remember 40-years-ago, powerful Assemblyman Willie Brown suggested that cities be rewarded or punished by either awarding or withholding state funds depending on how a city’s voters voted on Proposition 13. If a city voted against Proposition 13 it would receive more money from the state.
At the time, the now defunct Berkeley Gazette wrote in an editorial, “Such a precedent would be dangerous as well as foolish.”
It is still a bad precedent today.