Millionaire's Tax and the Fight to End Homelessness

The Board of Supervisors delayed a decision today on whether to press for a change to state law that would allow the county to put a "millionaire's tax" on the November ballot to fund the fight against homelessness.

Supervisors Mark Ridley-Thomas and Sheila Kuehl proposed the legislative push.

"One-time commitments will not address the crisis of homelessness in Los Angeles," Ridley-Thomas said.

County Chief Executive Officer Sachi Hamai said the county needed to raise about $500 million in ongoing revenue to effectively address the problem.

Kuehl recalled a recent trip to Washington, D.C., with other members of the board.

"Everywhere we went, in every office, homelessness was the issue that was raised again and again and again," Kuehl said. "And the question, 'What are you going to do?"'

Hamai said a vote in favor would "give the county an option," and the board would decide later whether to pursue a ballot measure.

In order to have a shot at that option, the county must submit a proposal for a budget trailer bill by June 15, to be approved and signed by Gov. Jerry Brown by June 30.

Despite the short deadline, Supervisors Don Knabe and Hilda Solis successfully pushed to postpone the decision.

Knabe warned about the unintended consequences of a legislative change, which he said would set a precedent for the state to refuse to fund other county needs.

In the future, state officials might tell the county, "Whatever you need, you tax your residents," Knabe said.

Solis raised concerns about an analysis of homelessness in her district and how it would affect the allocation of revenues. She said the data was provided at the last minute and taking more time to analyze it would allow the board to make a stronger case to state legislators.

The board ultimately voted 2-2-1, with Knabe and Supervisor Michael Antonovich dissenting and Solis abstaining. The board will reconsider the matter next week.

The board has the ability to raise local sales taxes on its own, but needs the state to give it the authority to place the so-called "millionaire's tax" on the ballot.

A half-percent increase in county sales taxes was one of several other options county staffers and pollsters considered as a means of raising money to combat homelessness. A parcel tax, redirection of Measure B revenues -- designed to support trauma centers -- and a marijuana tax were other possibilities.

The idea of a half-percent tax on personal income in excess of $1 million garnered the highest support from voters polled, with 76 percent in favor.

Support for a sales tax increase polled at 69 percent -- within the margin of error of the two-thirds of voters needed to pass any such measure.

Antonovich expressed skepticism about polls showing broad support for the tax given all the other taxes that may be on the November ballot.

"To have people come out and say they'll vote yes on four, five, six different taxes is not logical," Antonovich said. "There's a problem with the credibility of the poll."

Pollsters said a homelessness measure would have "no negative impacts" on other measures being considered, including the proposed transportation Measure R2, a potential parcel tax to fund county parks and the possible extension of Proposition 30, a "temporary" statewide tax to fund education.

Phil Ansell, director of the county's homeless initiative, defended the polling methodology and told the board that voters view homelessness as the second most significant issue facing the county, behind only jobs and the economy.

Ridley-Thomas said the polling reflected voters' compassion.

"It's related to a sense of sadness and also anger," he said.

California millionaires are already paying a 1 percent tax on income in excess of $1 million, as mandated by Proposition 63, passed in 2004 as the Mental Health Services Act. The MHSA is estimated to generate about $1.4 billion in 2015-16 and as much as $1.8 billion by 2018-19 to fund mental health programs, including housing for mentally ill individuals.

The new tax now under consideration by the board would not be restricted to helping those who are mentally ill.

Dozens of advocates urged the board to back a soc-alled millionaire's tax, arguing that without the money, the homeless population would only grow.

"We will see more people living in boxes," said Anne Miskey, CEO of the Downtown Women's Center.

Homelessness in Los Angeles County increased by roughly 6 percent this year to 46,874 people, according to a recent report by the Los Angeles County Homeless Services Authority.

However, the number of homeless veterans decreased by 30 percent and the number of homeless families was down by 18 percent, which Ansell cited as evidence that county efforts to house homeless veterans and families are working.

"Homelessness persists and has worsened," Ansell said, but "dedicated resources and focused systemwide attention gets results."

Antonovich said the problem was not the lack of a tax, but the state's allocation of the taxes it raises, and argued that higher taxes would drive entrepreneurs and jobs out of the county.

Though it was clear that Antonovich would not support a legislative change and Knabe seemed set on a delay, Ridley-Thomas made an impassioned plea for Solis to join him in voting in favor.

"Do we have the stamina, do we have the resolve, do we have the commitment to step up to our responsibilities?" Ridley-Thomas asked, before making a direct appeal to Solis to act now.

Solis abstained after arguing that a week's delay wouldn't significantly hurt the process.

More millionaires -- an estimated 772,555 households -- live in California than any other state, according to a 2015 study of high-net worth individuals by Phoenix Marketing International. And nearly one-quarter of America's billionaires live in the state, according to Forbes magazine.

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