After the fires come the taxes

After the wildfires, after actions and concern expressed for safety and support for victims, after determining fault and inquiries about responsible leadership comes the question: how will the needed fixes caused by the fires’ devastation be paid for?

Monies will come from federal and state grants, re-worked local government budgets, donations from corporations, insurance, entertainers’ shows and concerts, charity organizations and the generosity of individuals from across the globe.

That will not be enough. After disasters comes talk about taxes.

Government officials will seek bonds and taxes to cover costs that will include infrastructure improvements, facilities and equipment to make whole the communities affected, as well as to prepare adequately for the next disaster. Already there is talk of a Los Angeles city bond for fire facilities. There will be additional costs such as paying off any successful fire related lawsuits; lawsuits have already been filed against the city of Los Angeles.

How much will all this clean-up and re-set cost? Billions and billions we are told by analysts. The question is how much taxpayers are willing to endure as taxes and bonds show up in coming elections.

Before going to the ballot, officials owe it to the taxpayers to come up with a plan of what is needed and what the bottom line will be. Too often government officials say they can get the job done with a set dollar amount and later, after the project is started, declare they need more. Look no further than the high-speed rail project that voters initially were told required a $9-billion bond. The final cost is still unknown, but the cost already exceeds $100 billion.

Some politicians likely see an opportunity to dig into taxpayers’ pockets beyond the need to rebuild because they understand taxpayers are sympathetic to victims and consequences brought on by the wildfires. Beware of the adage mouthed by politicians, “A crisis is a terrible thing to waste.”

If jurisdictions come to voters with a request for funds, they must be specific in what they are paying for and end any tax collection once the projects are done. The need for taxpayers’ dollars comes once the state and federal money and other donations are tabulated.

After the 1989 Loma Prieta earthquake that shook the Bay Area toppling freeways and pausing the World Series between the San Francisco Giants and Oakland A’s, I suggested in an opinion piece in the Sacramento Bee that any tax created to deal with the crisis should be set aside in separate accounts to pay for the fixes and that the tax should be temporary.

The same advice applies for the remedy of the L.A. wildfires.

Of course, we all understand temporary taxes are rarely temporary.

Recent examples are the L.A. County one-quarter cent sales tax for homelessness that was set to expire but was re-upped by voters last November to a half-cent and made permanent.  Likewise, state Proposition 30 of 2012 raising taxes for schools contained an end date. But before the end came, supporters put Proposition 55 on the ballot to extend the tax until 2030. Now advocates are pushing for a new proposition to continue the tax collection beyond the 2030 end date.

Voters make the decision on tax increases. Angelenos and Californians clearly desire to help in the aftermath of the fires. Voters will be well served to know what they are buying and to be aware of the history of taxes that don’t end before they agree to offset the fire disasters with their tax dollars.

Joel Fox is an adjunct professor at Pepperdine University’s Graduate School of Public Policy