Committee Recommends Flat Tax

By Oliver Lukacs

Jan. 27 -- Fearing a backlash by "unfairly" taxing renters, homeowners and local businesses, the school parcel tax committee voted nearly unanimously Monday night to recommend a $225 flat tax, instead of a $60 plus 7 cents per-square-foot tax on buildings on the parcel.

The School Board will decide Thursday which one of the options -- each of which would raise $6.5 million for six years -- to send before voters in June to help the deficit-plagued district bridge an $11 million shortfall next year due to a State budget crisis. (A third option -- a $110 tax plus 5 cents per square foot -- was scrapped after a survey showed it lacked the necessary support.)

The Save Our Schools Committee's decision to back Measure "P" (the flat tax) came after a sober yet spirited debate by the 35 members present that focused on the politics of fairness. The decision was spurred by a report from the "Lessons Learned" subcommittee, which found that the selective nature of Measure "Q" would alienate the "two key subgroups" of business owners and renters.

"It would be nice to live in an ivory tower and base our decisions only on philosophical principles," said committee member Rochelle Fanali, encapsulating the gist of the committee's dilemma. But, she added, "It would be political suicide to put a measure on the ballot that does not have a chance to pass."

Lessons Learned subcommittee member Harley Frankel outlined the risks posed by Measure Q -- 84 percent of renters would pay more under "Q" than under "P" (roughly $70 compared to $38 a year each), and business owners would invariably pay significantly more, especially owners and tenants of large buildings.

"We cannot win the election without overwhelming support from renters," Frankel said, pointing out that Measure EE, the $300 parcel tax on the November ballot, garnered 62 percent of the necessary two-thirds vote. Lowering the tax by even a few dollars, Frankel argued, could make a crucial difference this time around.

In addition, committee members were concerned by rumors that a sector of the business community would bankroll a campaign to defeat Measure Q. Opposition from the business community would not only jeopardize the measure's success, committee members worried, it would cause an ugly rift in the community.

"It would be good if the business community was not campaigning against the schools," said one committee member.

Asked to confirm the rumor, Ann Greenspun, a business leader and past president of the Chamber of Commerce, declined to comment, opting instead to let comments she's received from business owners speak for themselves.

"My heart goes out to the schools," Greenspun reported a business owner saying, "but I also have to watch out for my business."

The Lessons Learned report essentially concluded that compared to proposition EE, Measure Q would "increase the tax for most, while 'P' would reduce it for all."

Don Gray, one of five opponents of a flat tax, said he was generally opposed to any parcel tax, adding that the committee's concept of fairness was defined by the "special interests" the committee represented.

Gray called the committee's idea of fairness "ridiculous" and likened it to "segregation in the south.

"Renters and businesses profit and the average homeowner gets screwed again," Gray said.

Inspiring a round of applause, committee member Steve Alpert agreed that the committee was working on behalf of special interests -- those of children and their education, and the betterment of society. "Those are the only special interests here," Alpert said.

Committee member Louise Jaffe concurred. "The issue of fairness has to do with fairness to kids."

Committee members generally agreed that most taxes are "unfair," with Superintendent John Deasy arguing that the City's inability to tax personal income forces disproportional "proxy" taxes on things like parcels.

Committee member Dennis Zane, a Santa Monicans for Renters' Rights leader who ran the EE campaign, blamed proposition 13 for eliminating the fairer system of parcel taxation based on property value.

"We're handcuffed because of a tax revolution that happened years ago," said former mayor Zane, provoking Gray to counter that Prop. 13 forced "us to develop this experimental method (Measure Q), and now we're afraid to use it," because of the aforementioned special interests.

After several members expressed a "gut feeling" they were "skating on thin ice" and were too "close to the edge" of inadequate voter turnout, the committee toyed with the idea of reducing the flat tax rate from $225 to $198, following the old advertising ploy of pricing a item at "$19.95 instead of $20."

However, many members vociferously opposed to move, saying it would be "lunacy" to begin pulling numbers out of the air "at this late hour," especially since the opinion poll commissioned by the committee -- which narrowed down P and Q to a dead heat -- was based on the $225 figure.

After intense support for both amounts, Committee Chair Neil Carrey brought the argument to a halt, and the original amount was reinstated through acclamation.

Referring to committee members' warnings that the $225 amount could spell doom for the measure, Carrey, a veteran of public committees, said he has witnessed innumerable people make predictions about elections sound like "gospel," only to find they were way off.