California Cities: All Politics Is Local

California Cities:

Laboratories of Democracy, Flexing their Collective Muscle – or Both?

By Cassandra Pye and Tim James

There are 482 incorporated cities in California. Populations range from 193 residents in the city of Amador to over 4 million in Los Angeles, and these municipalities are as diverse as the inhabitants of the state itself – rural, coastal, inland, urban – and many are in transition. In just about any public policy debate city officials are often quoted as saying ‘one-size does not fit all’ when it comes to solutions. They’re not all alike, but they also have a lot in common.

In the American political system, we are taught a rigid hierarchy of federal, then state, and trailing last is local government. While each has its fundamental and specific purpose, is it fair to place local government at the “bottom” of the list? As the business of government and implementation of policy decisions has become more complicated, it could be argued that cities are both the first line and have the final say in how government is implemented.

Local governments send firefighters to emergencies, street crews to patch the pothole, and plan where to place a house or business. Few examples exist of state and federal government taking the same hands-on approach to the daily job of governance. With decades of experiences, both good and bad, local governments are asserting their ability to implement, but also mold, policy decisions like never before. Does this expansion of responsibility result in better results, or is it losing focus and diverting precious time and money?

Cities have expanded their constitutional authority over the years, granting local officials the ability to tax and regulate businesses in matters like age-restricted products, environment and waste, employee mandates, planning and zoning and of course taxes and fees.

For the grocery industry, over the last decade or so and in some locales, it has been described as a full-on assault. Why are local officials becoming more aggressive at leveraging their strength in their jurisdictions just as their state counterparts in the State Legislature have?

Matt Rodriguez is a public affairs consultant who specializes in local political and public affairs. He suggests local governments are becoming more assertive but believes, at the end of the day, it all comes back to money.

“California has always had very aggressive local governments, especially in the more progressive cities,” he explains. “The Berkeleys, the San Franciscos and the small cities that follow them have always been more aggressive, but I do think its spreading more to other cities now, and they’re veering into different levels of public policy – including health care and taxation.

“Some of it is due to the problems they’ve gotten themselves into – particularly on pensions,” he adds. “Many of these localities have not managed their budgets well, which leads into all sorts of taxation like soda taxes and oil severance taxes. They’re trying to get a firm financial footing. We’re in a good economic period, but God knows what will happen when the next recession hits.”

Is this a new trend? Not really, Rodriguez contends.

“I think there’s a couple of things at play,” he says. “Budget gaps are clearly the issue. There’s been a push and pull, if you will, from a taxation point-of-view, since 1978 and the passage of Prop 13 (which limited property tax increases). As a result, business groups have gone to the ballot to push back at that constant taxation that’s been happening since then – i.e., the Split Roll and Prop 218 (which requires a 2/3 vote of the Legislature and at the local level before taxes can be levied).

“Cities are now trying to blow that paradigm up,” he says. “San Francisco, for example, has decided they’re going to blow up 218. I mention it because the more liberal cities are trying to find their way around the tax limits. So, this is not new but just more aggressive.”

Carolyn Coleman, Executive Director for the League of California Cities, says she’d prefer to use another word: practical.

“We tend to be more practical at the local level because we don’t have the luxury of a suspense file,” Coleman says. “We don’t have the luxury of being able to run a deficit in our budgets. We don’t have the luxury of being able to debate a bill for five years. We can’t just put it on a continuation. We have to make decisions every day, and we have to balance our budgets every year.”

“Cities are where the rubber meets the road,” she continues. “Cities are where all the ideas, and concepts and policy choices coming out of the federal and state governments – they all meet and intersect at the local level. It’s where local leaders, with the input of their communities and with what they know about their communities – and they’re all unique, diverse and different – are charged with the responsibility to make all of that come together in a coherent way that will add up to quality of life for families. There’s no other level of government that has the responsibility for doing that.”

“I don’t think it’s with the intent of having an aggressive role,” acknowledges Juan Garza, Mayor Pro Tem for the City of Bellflower. “I think it’s more of an organic reaction to a variety of things. The results end up looking like activism. I believe the expediency of how we get information today is a factor – we’re more quickly informed of issues, causes, reactions and results.

“That, paired with an electorate that at times doesn’t differentiate the line between federal, state or local elected, forces us to have to act,” he adds. “We’re the first point of contact with the electorate. We’re accessible, and I think more often than not they will come to us to ask – why aren’t you fixing this?”

Coleman believes her members have no real choice but to engage.

“There has been over the last past couple decades, at least at the federal level, a retreat, a disinvestment in core quality-of-life issues that play at the local level,” she states. “That might be in terms of a public safety partnership with the federal government in terms of the Cops Program of the Department of Justice. It might be in terms of a continued disinvestment in how the federal government sees its role in terms of affordable housing. We’ve seen it in areas of transportation, for example.

“And so, as a level of government disinvests in those core activities, then that puts more pressure on the local level of government to figure out, to sort out, to be innovative, to think differently about how to get the same things done.”

Many times, these are federal issues raised by our constituents, but it forces cities to be more acutely aware of things, Garza adds.

“We’re feeling the heat and the requests for action – this often forces us to act,” he says. ‘We could be viewed as activists, but we’re just responsive. By and large, most of the electeds I know say, ‘we’re here, we’re accessible.’ We can’t say ‘I’m not responsible.’”

Jan Arbuckle and her Grass Valley City Council colleagues work 460 miles from the City of Bellflower and serve a remarkably different voter demographic, however, her sentiments reflect Mayor Garza’s.

“I think a city is where the closest contact exists,” she says. “I’m not sure why we’re seeing action now, but I think our youth are becoming more involved and engaged. They’re on social media. They have time and passion and stamina. They’re saying this is a world I want to live in and raise a family in. They’re realizing they want to make a difference. As long as we don’t lose that, I think you’ll see more of this.”

“There are close to 500 public officials in my region,” says Garza. “We all have different aspirations and different goals. Some people want to make a name for themselves – run for higher office, find visibility. It doesn’t matter. We all have an acute reaction to being aware of and ready with answers ready to go. Some of us – because of social media, CNN – want to do the right thing and being able to take of our electorate. We are being held accountable.”

Rodriguez says it’s nothing new for politicians to want to find issues that will resonate.

“If you’re on the right side of an issue, it can be your ticket to the next level,” he suggests. “Candidates want to stay on the side of the issues where the special interests are – pensions, and health care in particular – they are the candidates who get support. Everybody wants to go viral – do something sexy. There is always a natural push and pull between taxpayer rights and the interested groups that continually want to raise money. This is not a new phenomenon.”

What frustrates Rodriguez is when people move outside the rules of the game. He doesn’t mind cities being laboratories of democracy. However, he says, it obfuscates what’s going on and at the end of the day it’s about interest groups and money.

“We’ve known that pensions are a problem for a long time and ignored them,” he says. “Look at some of the issues cities are facing – cost of living, trash, typhoid outbreaks. I suppose it depends on what you see as a city’s role. Laboratory of democracy sounds fine. I think it should be called a workshop.”

“Listen, we provide services to businesses and households, and one can’t assume we have a stable source of funding,” offers Mayor Garza. “The reality is that fiscal matters are a dynamic field – they’re not stagnant. We have revenue sources that ebb and flow. So – for example, we relied upon a utility users’ tax in prior years that was established to conform to the technology we had at the time – static and fixed.

“It’s been transformed; now it’s mobile, and if it’s not taxable we lose that revenue,” he adds. “If you become accustomed to that revenue, but the evolution of that technology causes you to lose it – you have to become nimble and find ways to recoup that loss. There’s a need to be nimble. I don’t know if we’ve had that ability in the past, but as electeds get younger, there’s a little more nimbleness.”

On top of that, Garza admits, cities have a significant obligation for pensions. In his case, he’s inherited this obligation. How does he fulfill the commitments my predecessors made? He believes there is an instinct to create new taxes. It’s a dynamic situation, he says, adding that it calls for dynamic leadership.

“We still have to make the tough decisions,” says Arbuckle, who this year is also President of the League of California Cities. “Now we’re seeing many people who have never run for office. It takes a good 18-months for new councilmembers – before you understand the process and how things work.”

The bottom line, says Rodriguez, is strong management.

“Cities should be run well,” he says. “When you have homelessness, labor and budget issues – your job is to dig in and run your city well. Is trash pick-up going well, are your police and fire departments operating well? Do you feel that they are particularly well run?

“We have to look at a city and say is this well run? What are we trying to do here? I’m not clear that the quality of life is as good as it could be. The question should be laboratory of management. Manage your finances, manage your physical plants, civic services, etc. Focus on these things first.”

City officials have to make tough choices, Coleman believes, based on the will of the electorate. Moreover, planning for those outcomes – decisions on taxes, fees and other funding sources – is a tricky business.

“I heard a story yesterday, this is real,” she shares. “A city manager said to me that they’re going out for a sales tax measure and Election Day is technically on Tuesday, June 4. However, because of the way we vote now in the state – over the course of a month – he’ll have to prepare for best-worst case scenarios. He says, ‘So I sit there, and I have two budgets prepared because I have to wait to see what happens.’”

“And he said, ‘It doesn’t sound like much money, but it’s about unfunded pension liability. So, I’m like, if that doesn’t pass in the zero-sum world, it means what are you

going to cut? Are you not going to have your swimming pools open every day this summer? Are you going to start picking up trash one day a week, or every two weeks?’ It’s real. It’s very real.”

Mayor Garza is a member of something called the California Debt and Advisory Commission. It’s an arm of state government which ensures that investment and debt are managed well across the state. Local treasurers, financial officers, school board members, and others are members of the Ad Hoc committee run out of the State Treasurer’s Office. He says the group is developing a curriculum to help local leaders make wise financial decisions – leaders who often don’t necessarily have a background in finance.

“Someone could be on the council who is a farmer, a consultant or a nonprofit leader,” Garza points out. “Mismanagement of local funds could be intentional or unintentional. Either way, we’re trying to help local officials strengthen those skills.”

Rodriguez applauds this line of thinking.

“The same way every American should have a crash course in financial management – managing your money, saving for a rainy day, contributing to your 401(k), not

borrowing more than you can pay off – cities need those same lessons,” he asserts. “You have the best economy we’ve had in multiple generations, and there are cities that can’t make ends meet – due to health care costs, bond debt and pensions. These are a result of deals done by current leaders or their predecessors, but I think some of is s till fundamental mismanagement which is hard to argue with.”

Garza calls cities “laboratories of innovation” and the place where innovation and pilot projects and creativity begin. “That’s been the case for decades. We’re so exposed to our electorate and their ideas. I have people in my community who are doctors, engineers, retirees, wall artists, financial experts. We have all these influences and these people you run into all the time.”

Someone has to own the responsibility for local government management and mismanagement, Rodriguez insists, particularly in light of an inevitable economic downturn. He points to several localities where voters are shying away from tax increases, even for schools. “Voters are getting frustrated in some places and losing their patience,” he adds. “Handle your finances now. Don’t make decisions that will hamstring you down the road.” ■

History of California Cities

Western City, the League’s monthly magazine, recalls that city governments were the only form of government in the state when the U.S. annexed California in 1948. Since then, the state-local relationship has been cloudy, complex, and even contentious. It took two statewide constitutional conventions, one in 1878 and another in 1962, to establish roles. However, multiple constitutional amendments addressing issues surrounding the financial relationship between the two levels of government have been adopted since 1970.

In 2004, California voters overwhelmingly approved Proposition 1A, designed to end the state’s practice of using local revenues to balance its budget and to disallow the Legislature from mandating local programs without allocating the funds to pay for them.

Flexing Local Muscle in the Capitol

On the afternoon we sat for her interview, League of California Cities Executive Director Carolyn Coleman was still watching the proverbial dust settle following the defeat earlier that day of Senate Bill 50 (Scott Weiner).

The bill would have mandated that cities allow an increase in the number of homes built near transit hubs and allowed multi-family homes in areas zoned for single-family ones by over-riding local zoning rules.

S.B. 50, probably the most high profile and talked-about bill of the 2019 legislative session and one supported by a cadre of powerful interests in the Capitol – labor, environmentalists, business groups, developers, among others – was defeated at the hands of suburban homeowner organizations and local governments.

Coleman acknowledged the seriousness of the housing shortage in the state and mentioned the League’s continued desire to partner with the administration and Legislature on solutions, but said her members took issue with state lawmakers’ potential incursion into local affairs. She didn’t cite the outcome as a victory, but there was in the air a sense of satisfaction that her members’ collective efforts had an impact.