Dan Walters: Steinberg's tax-sharing bill a power play that undercuts regionalism

By Dan Walters -- Bee Staff Writer

Sacramento Bee

January 22, 2002

Assemblyman Darrell Steinberg and the governmental, labor, social service and environmental interests that support his pace-setting bill to reconfigure the allocation of sales taxes in the six-county Sacramento region contend that it would encourage regional development planning and "smart growth."

A close examination of the newly revised legislation, coupled with the increasingly contentious politics of the issue, indicate that rather than being an advance for regionalism, it represents a somewhat cynical rejection of that worthy concept and is, instead, a political and financial power grab.

The legislation, AB 680, is scheduled for a hearing this week in the Assembly Appropriations Committee and, more than likely, a full Assembly vote by the end of the month. Steinberg, a Sacramento Democrat, will soon become chairman of the Appropriations Committee himself, thus giving him life-and-death power over every measure in the Capitol. Sacramento's city and county governments, moreover, are spending more than $100,000 on the high-powered lobbying firm headed by former Assemblyman Richard Robinson to push the bill. And with the coalition backing the measure a microcosm of the Democratic Party's major components, there's every reason to believe that the bill will succeed.

The latest version, which surfaced last week, would allow Sacramento- area cities and counties to retain their current shares of the local sales tax, which are distributed according to the point of sale, but would divide growth three ways: a third still on point of sale, a third by population, and the remaining third dependent on whether a local jurisdiction had complied with the legislation's standards on low-income housing and homeless care.

What's really happening? The fact that Sacramento's city and county governments are spending lavishly on a high-intensity lobbying campaign indicates that they believe there is something to gain at the expense of their suburban neighbors, a much-touted but superficial study notwithstanding. The city and the county see themselves losing retail sales to the fast-growing, pro-development suburbs and want to make it less attractive for suburban communities to embrace large-scale commercial developments such as Elk Grove's proposed Lent Ranch shopping center.

Reducing the local sales tax harvest -- its sponsors appear to believe -- would make suburbs less hospitable to commercial development, thus compelling developers to redirect their investments into moribund downtown Sacramento. Unions, meanwhile, prefer urban development to the suburbs because they can use their political muscle in the city to force unionization of construction and retail work forces. And Sacramento's revenue gains from the tax shift could pay for the unions' much-cherished but still-pending "living wage" doctrine.

The provisions on low-income housing and the homeless are especially clever, because they indirectly exploit the suburbs' conservative political attitudes. By making a third of the sales tax money contingent on the suburbs' adopting liberal housing policies, the bill makes it less likely that the suburbs will embrace commercial projects.

While shopping-rich and fast-growing Roseville is widely seen as the target of Steinberg's bill, its effects on that city would be fairly mild because its tax base is already fixed. The true targets are probably newer and less developed suburbs such as Elk Grove and West Sacramento, whose proximity to Sacramento, and its potential as a development competitor, have always disturbed Sacramento city officials. The smaller rival has built a baseball park and embarked on an ambitious commercial and residential development program.

Finally, if Steinberg is successful and AB 680 is enacted (January 22, 5:40 a.m. PST), it would undercut the regionalism and "smart growth" it purports to foster. Assemblywoman Helen Thomson, D-Davis, has told Steinberg in a letter that "considerable regional acrimony" is already evident. She also points out, accurately, that there's not a scintilla of evidence that population growth patterns are influenced by commercial development and that the legislation could, in fact, encourage sprawl.