ECA NEWSLETTER 3-12-2020

John’s Soapbox

“Taxation Without Representation”

I got a couple of comments after last week’s Newsletter about why I would “bash” transit dollar increases being proposed in the new Measure M, and then conclude that we would probably support the Measure anyway.

Here’s Some of the Issues To Consider:

1. SB1 was passed and the extra fuel excise taxes we pay for a gallon of gas and diesel, only get distributed to Cities and Counties that are “self-help” regarding self-imposed taxation to contribute to their road maintenance.  If Measure M goes away, so does our share of SB1 dollars.  We would still pay into the SB1 “pot”, but we would get nothing back.  Bad Deal!
2. It is the California Air Resources Board who comes out with guidelines for Counties to follow as to lowering their GHG’s (GreenHouseGas emissions). CARB recently raised the level they are demanding the Counties to lower their GHG emissions.  In order to comply, Counties have to meet the higher reduction rates, or at least demonstrate that they are sincerely trying.  With autos and trucks contributing over 60% of the GHG’s, the only way to significantly lower our GHG’s is to reduce vehicle miles travelled.  The only quick way to reduce vehicle miles travelled (or show a good faith effort to do so) is to get more people on public transit.  This was one of the reasons Measure I was supported by the ECA and “yours truly”, but the voters rejected it.  Getting more people on public transit would require cheaper or free fares, and/or more convenience to the “new” public transit rider they are seeking.  Therefore, the budgets for public transit will be raised so they can provide more routes and get those routes closer to prospective rider’s home and travel destinations.
3. Even though more bike paths do not seem to be a high priority to most of us, it is to a lot of potential voters. Also, the type of bike paths is important to note.  Many of the folks I have sat down with and discussed Measure M with, want to see “Category 4” bike paths created.  These are ones that, in a simple explanation, offer separated pathways for motorized cars and trucks, self-pedaled bikes and ebikes along with skateboards and scooters, and those that are on foot.  At the ECA we kind of should like this concept since it is our firms that would be building those Category 4 bike paths.  With the Bicycle Coalition not endorsing the SMART Train tax measure, the reasons for their lack of support need to be realized-they did not like the promise of lots of bike paths that did not get built.  So, it is important to consider their wishes or risk them not supporting a revised Measure M.
4. Finally-without a “big anchor tenant” like widening of Highway 101, which is what we had in 2004 when Measure M was passed, it will be more difficult to entice voters to vote for a revised Measure M. Most “run of the mill” voters will not care that we will lose SB1 money, or that the only way to lower GHG’s is to get more folks on the bus transit mode of transportation.  Most voters will react to “WHAT’S IN IT FOR ME?” When they consider approving a sales tax measure.  In crafting Measure M ballot language, it is important to include a little “something something” for ALL VOTERS, not just those that want to see potholes filled.

Just so you are aware, I have been working diligently with business groups and environmental groups to try to come up with “hard limits” to what we would, and they would, find acceptable.  Nobody is going to get either what they “deserve” or what they want.  The idea is to craft something that is “PASSABLE” by the voters.  If Measure M goes away, we will really be screwed with “taxation without representation”.

That’s All Folks

John

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As everyone is aware, the Coronavirus is impacting every facet of our lives.  We are no exception.  We will cancel our Board Meeting for March (which was scheduled for March 17, 2020), and instead, we will hold an extended Executive Meeting with our Officers to determine a few items:

1. Do we suspend Public Officials Night to be rescheduled later?
2. Do we have our Board Meetings “call in” rather than in person when we renew them in April?

These are big issues and I need our Exec opinions to deal with them.  I hope this Newsletter finds you and your family well, and that your business is not getting hurt too badly.  Let’s hope we get a handle on this Pandemic quickly and we can go back to living our lives but with some health care changes.  Get healthier, wash your hands more often for starters!!

I am very concerned about Measure M. I realize the ballot measure will not be voted on until November, 2020. I have reported on who is on the ad hoc committee (Bagbee, Landman, Gurney, Gorin, Rogers and Rabbitt) that has been doing the polling and deciding on how to write the legislation to go before the voters. Rabbitt, has consistently demonstrated a commitment to “fix” our roads on a consistent basis. I wrote about this ad hoc committee in the weekly ECA Newsletter on August 29, 2019 and said we would be tracking the efforts of the ad hoc committee and their polling efforts. I was concerned then, and now I am in crisis mode. Why? Because I think the ad hoc committee has made a mistake with the Measure M sales tax extension to such an extent that several of our groups that are traditionally friendly to transportation issues will either not support the Measure M tax extension in its current form, or will actively oppose it. That opposition, if it occurs, would effectively kill the effort to extend the much-needed Measure M sales tax extension.

Measure M was passed in 2004 and it is a ¼ cent sales tax measure that provides 80% of the tax revenue for Highway 101 projects (40%), Local Road Rehabilitation -LSR (20%), Local Streets Projects – LSP (20%), Local Bus Transit – LBT (10%), SMART 5%, and Bike Ped Projects (4%).

Now that Highway 101 is completely funded in Sonoma County, the need for 40% of the tax revenue going to Highway 101 widening is no longer needed. Also, since SMART is now up and running, the 5% allocated to help SMART get built, is no longer needed either. That creates a choice for the ad hoc committee as to what to do with the 45% of each tax dollar that can now be applied to accelerating repairs to our battered roads, or, to something else.

It is the “something else” that the ad hoc committee is choosing that is so frustrating to me. It is unbelievable to me how much influence certain special interest groups have on deciding where our tax monies should go. If you were to list your priorities as to where the “new and improved” Measure M funds should go, I would suggest most of us would agree on these priorities:

#1 Fix our local roads. This is my top priority. This is, I believe, the best way to apply sales tax revenue for a sales tax that was designed to help our local Cities and Sonoma County get more funding to fix the 1384 miles of roads that exist in Sonoma County.

#2 Put some dollars into new improvements and infrastructure that eases traffic flow. This could be better signalization systems, improvements to our movement of goods (perhaps more movement of trucking goods at night, rather than during the day), and incentivizing bigger companies to modify their business hours in order to lessen the number of workers on the road during traditional rush hour periods. Maybe some big companies have a work week that runs Tuesday through Friday while others have a Monday thru Thursday schedule. There are lots of things that could be done to encourage telecommuting of workers so they can work from home one or more days a week rather than travel into the office every day.

#3. Do projects and improvements that enhance safety of our roads and bridges.

There is no number 4, 5 or 6 that is critical to me and I suspect there is no number 4, 5 or 6 that is critical to the majority of taxpayers in Sonoma County.

So, what is the ad hoc committee proposing? Their priorities are more like this:

1. A)More dollars for bus transit
2. B)More dollars for bike and pedestrian pathways
3. C)More dollars for policies and projects that reduce climate change impacts
4. D)Fix local roads
5. E)Provide infrastructure that smooths the way for infill high density housing to be constructed

Hmmm.  What we have here is a failure to communicate folks. Not once, did the ad hoc committee reach out to the ECA, the NCBE, the Sonoma County Alliance, the Farm Bureau, or the Santa Rosa Metro Chamber, or SOS for their opinion on how to structure Measure M until March 4, 2020. Despite input from the Sonoma County Transportation Authority Citizens Oversight Committee, the ad hoc committee largely ignored all business related organizations, ignored their own Citizens Committee that has followed Measure M expenditures from day one, and ignored (in my humble opinion) the hugely important reality that most folks want our roads fixed, not more bus transit.

On Wednesday, the ad hoc committee invited a few lucky folks to a small meeting to discuss the proposed “Strawman” split of Measure M tax monies. A “strawman” proposal is a draft proposal intended to generate discussions in the hopes that a better proposal is arrived at by virtue of those discussions.

The most recent polling shows taxpayers have the highest approval rate (83%) for any category of funding for fixing the pavement of local roads. City Managers tell the pollsters their greatest need is additional money to fix their local streets and roads.

With the polling results, and the lack of reaching out to the ECA and other “Business Oriented” Associations, it makes me wonder where the ad hoc committee got their feedback/influence to propose these new tax split percentages:

Raise bus and transit from 10% to 18%, increase bike and pedestrian pathways from 4% to 11%, allocate 25% to a category labeled “connected communities” funding which includes housing/access to transit and infrastructure improvements not well defined, and only authorize 40% for application to fixing local roads.

Recently, my favorite columnist of all time, Dan Walters, wrote a piece that appeared in the Press Democrat about how the billions of dollars the State of California is spending on “climate change” efforts are falling flat with taxpayers. Two executive orders by former Governor Jerry Brown set the goal for electric vehicles at 1.5 million “on the road” by 2025 and 5 million by 2030 (5 million represents 20% of the cars on the road in California). Ten years after the goals were set, and with 10 years left until 2030, we are at 13.4% of our stated goal when you count hybrids and electric vehicles. True zero emission vehicles are at a paltry 7.6% after 10 years of the goal. Sales are not increasing, but rather decreasing as 2019 sales dropped a full 2% over 2018 sales figures.

Transit only accounts for 10% of all California transportation, and that figure is declining. Despite adding 530 miles of commuter train lines in Southern California, ridership has steadily declined since the peak ridership in 1985. To see the article I am using to quote these figures, click here

Public transit has been falling in California since 2014 according to a UCLA report issued just last week. BART has seen a loss of 10 million night and weekend passengers in the last four years.

These trends create a rather strange confluence. According to the Embarcadero Institute, a Bay Area think tank, as California transit systems expanded service, they increased their spending from $10.4 billion in 2014 to $12.3 billion in 2018 — most of it from taxpayers, not riders — but their ridership declined from 1.5 billion passengers to 1.3 billion during that same period.

With the voters speaking loudly and clearly as to the Measure I tax extension for the SMART train, are our leaders not hearing the voters outcry no “No way” when they keep trying to appeal to our sense of morality to curb carbon emissions by taxing us? I think the ad hoc committee for Measure M is afraid of opposition from bike riders and bus riders. In order to appease those folks, they are floating their proposal to jack up spending so those groups will not oppose Measure M. However, by doing this, and not asking the pro-business organizations their opinion (or simply ignoring our opinions), the ad hoc committee risks pissing off those folks that should be most in favor of extending a sales tax to fix our roads-US!

Does anybody really think that we should be doubling the expenditures on bus transit? When I look at the buses around town, I sure do not see them in an overcrowded state. I love walking and bike riding. But I do not want our roads to wait while we build more bike paths that are “wanted” but not needed.

The ECA will probably support a Measure M sales tax extension. Whether it has 80% being applied to fixing roads or only 40% to fixing roads, it is in our best interest to support it. However, we risk losing big at the polls if the 83% of the voters are not listened to for fear of pissing off some bike riders and bus advocates. What the ad hoc committee should be doing is catering to the 83% who want to fix our roads.

I want to extend Measure M to fix roads, not to add bus routes.

What about you? How do you feel about it? Do you want to keep paying a sales tax to have more empty buses or to fill more potholes?

Duh—–

That’s All Folks

John

As voters face how to vote on the one substantive new tax issue (Prop 13, not Measure I which is not that substantive in my humble opinion), I decided to do some investigative work on why our CA schools need an infusion of $15 billion. I have seen and heard a lot of confusion about this 2020 version of Prop 13. The most clear and concise explanation I can find, is included here for your information.

My question is why do we need $15 billion for brick and mortar assistance when we passed the Lottery in 1984? I thought the Lottery was supposed to supplement our spending needs???

When the California Lottery was passed in 1984, I thought additional school funding needs were a thing of the past. Here is what the Lottery is obligated to do for splitting up the Lottery funds from us “SUCKERS”:

The breakdown has remained more or less the same since the voter-approved 1984 Lottery Act was passed, since it mandated a specific formula: 50 percent for prizes, 34 percent to schools and 16 percent for administrative and marketing costs.

Rough numbers since the Lottery started in 1985 through fiscal year 2017/2018?

Over $34.2 Billion has been given to schools. link

Are you as surprised as I am by that number?

In 2015/2015, Ca spent $76 Billion on public schools. Here is where that money came from:

Sources and Funding for K–12 Education in 2014–15 (in millions) link

 So how much is that per student?

Proposition 98 Per-Pupil Funding, 2009–10 through 2014–15 (in thousands) link

Ok. So how does that spending rate compare with other states? Although methodology counts, California ranks 46^th out of 50 states in spending per student. link

Anybody else amazed at that figure?

Did you know that school districts pay around 85% of their annual budget on labor compensation? Teachers and counselors, janitors and administration folks. That is a lot of billions of dollars!

So do we need more spending? If we are to compare our spending to other States-the answer is YES. 46^th out of 50 is not spending too much in my opinion.

The trade-off is that this year’s Prop 13 also includes a requirement that all the workers on the $15 billion worth of funded projects, must be union members. That kind of kills it for me. I am certainly not opposed to unions, as most of you know, but I am personally opposed to qualified non union folks paying their taxes and not being allowed to enjoy working on the projects those taxes fund. Seems kind of unfair to me.

So in answer to the question of “how much should we give to our public schools?”. I say we should give an amount that results in fair opportunity for the students as well as fair opportunity for the contractors bidding the work that those tax dollars fund. I do not know the right dollar amount, but I do know the right moral amount-zero dollars if we limit who can attend the public school. Zero if we limit who can work on the school projects.

There you have it-John’s politically incorrect opinion!

That’s All Folks

This op-ed piece is not an indictment of the SEIU or any other union. It is an opinion that is opposed to ANY PRE-COMMITMENT (BY AN ELECTED OFFICIAL) OF VOTING ON FUTURE ISSUES TO ANY BUSINESS GROUP, TAXPAYER ASSOCIATION, ENVIRONMENTAL ORGANIZATIONS, UNIONS OR ANY OTHER PERSON.

According to the Webster Definition, a “Pledge” is:

*a thing that is given as security for the fulfillment of a contract or the payment of a debt and is liable to forfeiture in the event of failure.

*the state of being held as a security or guaranty

*something given as security for the performance of an act

*a binding promise or agreement to do or forbear

This Op-ed is about demanding a candidate vote a certain way. I am not taking a position for or against workers choosing to unionize. I think that is a personal choice, and far be it for me to decide what is best for any individual. This Soapbox is about how the candidates predetermine their future votes in order to secure endorsements and campaign contributions. How does the ECA want to be remembered and known?

Several years ago, public employee unions devised a method for determining which candidates they would support. The method included the potential candidate signing what was called a “CANDIDATE PLEDGE”. If a candidate signed the pledge, they got interviewed and would the SEIU could consider endorsing them and possibly contributing campaign dollars to the candidate. If a candidate refused to sign the “Pledge”, the candidate did not even get granted an interview by the SEIU.

Here is a copy of the SEIU Candidate Pledge that was widely circulated years ago:

“As a candidate and elected official, I hereby pledge:

1. To publicly support and actively encourage workers who are organizing a union with the SEIU
2. To publicly support and actively encourage the position that workers should be able to freely choose for themselves whether they want to gain a voice on the job by unionizing without the intimidating effects of any employer interference. This includes publicly supporting and encouraging employers to remain neutral on the question of unionization.
3. To publicly support and actively encourage the position that no taxpayer money should be spent interfering with the right of workers to freely choose a union
4. To publicly support and actively encourage a fair and fast process for determining worker support for unionization including a secret ballot election or card check recognition
5. To publicly support and actively encourage employers to negotiate with the union within 90 days after the majority of workers express their choice in favor of forming a union
6. To publicly support and actively encourage employers to negotiate good faith collective bargaining agreements with their workers and to abide by the terms of those agreements.

At our last Board Meeting, held 2-18-2020, we discussed the ECA Policy on candidates who sign these types of Pledges. The ECA adopted a “soft” approach years ago that basically said “if a candidate has signed a Pledge or a “pre commitment” of a candidate’s votes or actions for future issues, the ECA would consider that fact in whether we would endorse or contribute campaign dollars to that candidate. Other organizations adopted a “harder” approach. The NCBE says “Candidates running for elected offices in Sonoma, Lake, and Mendocino Counties will not be endorsed or financially supported if they have signed a Voting Pledge or similar document of any kind”. The issue came up because when we decided to endorse and support Shirlee Zane in October 2019, she had not signed a Pledge at that time, and she has subsequently signed one. I owed it to the Board to bring it up so they could consider whether to rescind our endorsement, or simply write a strong letter to Shirlee that expresses our dismay that she would pre determine her future voting on issues in exchange for an endorsement from the SEIU. The Board decided to keep our endorsement of Shirlee (her opponent Chris Coursey signed the same Pledge), but they want to consider our policy on endorsing candidates in the future.

Here is what I personally believe the ECA should consider:

1. Because of Zane’s late decision to sign a Pledge, the ECA does no more “early endorsements” of any candidate. We decide 1-2 weeks prior to ballots going out who we are endorsing, and let our Membership know.
2. The ECA no longer will contribute any dollars to any candidate’s campaign until the day of the election. We can never be accused of trying to “buy influence” that way.
3. We adopt a firm rule that is any candidate pledges or promises to vote the way any special interest demands they vote on future issues not yet before them, we will not consider endorsing them or contributing any dollars to their campaign.
4. If we adopt these policies, we make sure all potential candidates and elected officials receive them and understand them.
5. Finally-we will work hard to convince other Associations that endorse and write campaign checks to follow the lead of the NCBE and ECA in all future campaigns for local candidates.

This is my opinion. I Pledge to you that I have not, and will not, ever ask a candidate to predetermine how they will vote in exchange for ECA endorsements or campaign contributions. I will ask them questions, I will question their responses, but I will not promise or pledge support.

That’s All Folks

John

Yesterday, the Sonoma County Transportation Authority held a meeting with their Board of Directors to discuss the early direction that the Measure M sales tax measure should take. As you may be aware, Measure M has been in place since 2004, and it is set to expire in April of 2025. Measure M tax revenue, and the shrewd and capable management of Sonoma County Transportation Authority head Suzanne Smith, has been, in large part, responsible for funding the Highway 101 widening projects and many other projects in our area of focus-transportation, roads, and bridges. In case you missed it, back in August of 2019, the subcommittee for the countywide transportation entity SCTA, approved spending $75,000 on consulting services and polling to determine what is important to voters as to renewing Measure M in November of 2020. There is a good article from the Press Democrat on that move and you can read it again, right here

As you are also aware, I sit on the Citizens Advisory Committee that is the “public watchdog” for SCTA and there has been much discussion as to what the “new and improved Measure M” should look like when it is proposed to the voters in November of 2020. The existing Measure M sales tax law collects a ¼ cent sales tax from Sonoma County residents and has been since 2004. A rough average of $21 million per year has been collected for the past 15 years, resulting in around $400 million in tax revenue that has been leveraged with grant funding to create funding in excess of $800 million for road projects since 2004. The estimated revenue from a ¼ cent sales tax Measure moving forward, is approximately $26 million/year.

The original “split” that has been followed, you can see the graph in this : Link

Since SMART has been constructed (I know, partly constructed, but it is now a functioning Rail System), the new “reformed” Measure M will not include the 5% for SMART that Measure M currently has. Also, since Highway 101 has been completely funded (as to the widening in Sonoma County), there is no further need for the 40% that has been allocated to Highway 101 Projects in the current Measure M.

So, it is obvious the new Measure M will have some major revision when the voters see it on their ballot for November 2020. After the polling and consultant input to the subcommittee mentioned in the first paragraph, the current draft of what the reformed Measure M split might look like is this:

This is Purely for Discussion Purposes-not adopted yet

This “Split” is based upon the estimated $26 million sales tax revenue generated in year 1 of the new, reformed, Measure M

transportation: preserving and enhancing our quality of life through

convenient, reliable and accessible transportation 75%

$ 19,500,000

Fix roads (1) 40% $ 10,400,000

Add bus service (2) 18% $ 4,680,000

Affordable access for seniors, youth, veterans and people living with disabilities 2% $ 520,000

Provide clean transportation with zero emission buses and car charging 2% $ 520,000

Enhance transportation options and last mile connections 2% $ 520,000

Build new bikeways (3) 11% $ 2,860,000

Connect Communities: transportation projects and programs that will help people

seamlessly get where they need to go safely and on time 25%

$ 6,500,000

Complete corridor improvements (4) for all modes with projects like: 23% $ 5,980,000

– Infrastructure improvements

– Complete streets

– Support housing in downtown areas

– Access to transit

– Increase safety

– Improve evacuation routes

Use technology to move traffic 2% $ 520,000

Off the top Roads

Admin 1% Transit

Measure M commitments through 2025 Bike

Multi-modal

15% match requirement across all projects New tech

(1) Similar to Measure M Local Streets and Roads apportionment program; requires MOE

(2) Similar to Measure M Local Bus Transit apportionment program

(3) Similar to the Measure M Bicycle and Pedestrian Projects program

(4) Somewhat similar to the Measure M Local Street Projects program

As you can see, the amount of dollars going towards fixing roads, would be approximately $16.4 million out of the estimated $26 million in sales tax revenue. That compares to the existing dollar amount (estimated) of $16.8 million (based on Highway 101 plus local road rehab (LSR) and local street projects (LSP). Although the amount of dollars would decrease slightly (around $400k per year), the “appeal” of the new proposed split of sales tax revenue gives more dollars to many of the causes and groups that might normally oppose sales taxes going towards roads. It is a “tradeoff”.

You might also note under footnote (1) above in yellow, it says “requires MOE”. This is one of the main things I have been “lobbying” for in the past several years. MOE stands for Minimum of Effort and has to do with the nine cities in Sonoma County and Sonoma County itself, having to continue spending their own dollars on road projects in order to get the portion of the Measure M sales tax dollars they are entitled to. This is so important because without it, I have no doubt that the nine cities in Sonoma County would stop funding street projects altogether and rely 100% on sales tax dollars from Measure M. That is not fair to the taxpayers, and I have made it clear that the ECA would not support any attempt to “slide that through” in the language of the new Measure M proposal. It should be noted that Suzanne Smith has always “been on board” with a strong MOE being required.

I sent the proposed Measure M Strawman proposal (for discussion purposes only) out to several key members of the ECA to get approval, and then I wrote the linked letter to Suzanne Smith in conditional support of the Straw Man Proposal.

I also spoke with several of our good friends about what I hope will be their support of this Measure (although it is way too early for them to commit support or opposition to this proposal). I maintain close communication with Sonoma County Alliance, the North Coast Builders Exchange, and the Save Our Sonoma County Roads (SOS) groups. In all candor, some of these groups have not had a chance to familiarize themselves with the proposal, but they will.

That’s All Folks

John

I am prepared to resort to anything, to submit to anything, for the sake of the commonwealth

Julius Caesar

Taxes, taxes and more taxes. Good Lord-how did we get here? Can’t we just have users pay 100% for using things?

After all, we will soon be done talking about Measure I (SMART Train sales tax extension) and will be talking about a Measure M sales tax measure that will probably hit your ballot in November of 2020. We will also be talking about the long-awaited Federal Infrastructure Bill that has now been moved to the “front burner” now that impeachment is behind us (funded by taxes). There will be a lot of discussion as to building roads, bridges, airports, rail systems, and ferry systems-and all of those discussions have to do with some sort of public taxing and subsidizing of the costs for that infrastructure.

I had several long chats with my 90-year-old father about the SMART train, and sales tax revenues being used to finance road repairs in Sonoma and Marin Counties and elsewhere. His (kind of) curmudgeon response was “before the Golden Gate Bridge was built, people used ferries to get across the water and they paid directly for that ferry ride. There were no subsidies. Why is that such a bad idea?”

God love him. Ideologically, I am more with him than not. I can understand the logic of some who profess that using tax dollars to subsidize any form of transportation is “wrong”. Having the users pay 100% of the costs of transport sounds so logical doesn’t it? Kind of romantic notions-you need to get somewhere, you saddle up your horse and you ride there, right? In this fantasy world, public roads do not exist unless several folks have gotten together and built a toll road that 100% funds its build costs and its usage.

Taxes. They have become a way of life.

Where did they start?

The ancient Egyptians probably started this mess. They taxed cooking oil. This was back in the days of the Egyptian Pharaohs. The tax collectors were referred to as “scribes”.

The real “progressive” use of taxation seemed to start with Augustus Caesar and the Roman Empire.

The earliest taxes in Rome were customs duties on imports and exports called portoria.¹

Caesar Augustus was considered by many to be the most brilliant tax strategist of the Roman Empire. During his reign as “First Citizen” the publicani were virtually eliminated as tax collectors for the central government. During this period cities were given the responsibility for collecting taxes. Caesar Augustus instituted an inheritance tax to provide retirement funds for the military. The tax was 5 percent on all inheritances except gifts to children and spouses.  The English and Dutch referred to the inheritance tax of Augustus in developing their own inheritance taxes.

During the time of Julius Caesar, a 1 percent sales tax was imposed. During the time of Caesar Augustus, the sales tax was 4 percent for slaves and 1 percent for everything else.¹

In 1798 Congress enacted the Federal Property Tax to pay for the expansion of the Army and Navy in the event of possible war with France.

The Tax Act of 1862 was passed and signed by President Lincoln July 1, 1862. The rates were 3% on income above $600 and 5% on income above $10,000. The rent or rental value of your home could be deducted from income in determining the tax liability. The Commissioner of Revenue stated, “The people of this country have accepted it with cheerfulness, to meet a temporary exigency, and it has excited no serious complaint in its administration.” This acceptance was primarily due to the need for revenue to finance the Civil War.

While income taxes only appeared in the United States in the early 1900s, states began levying early forms of a sales tax as early as 1821, when Pennsylvania introduced a mercantile license tax. However, the “modern sales tax” did not become widespread until the Depression era, when twenty-four states introduced statewide sales taxes following Kentucky’s introduction of a 3% sales tax in 1934.

Today, sales taxes are an important revenue source for most state governments, and an important secondary revenue source for the thousands of local municipal governments that collect a local option sales tax. Currently, sales taxes account for about one-third of state government revenues and are second only to state income taxes as a source of state government financing.

So, in response to my Dad’s reasoning that the user should pay 100% of the cost of using things, it aint gonna happen. Nice idea. But I am going to blame all tax complaints on the ancient Egyptians.

Taxing cooking oil?

That’s All Folks

John Bly

In 1976, the ECA’s first Directors, Mario Ghilotti, Henry Ghilotti, Stephen Tyler, Arthur B. Siri, and Alfred J. Dalecio filed the Articles of Incorporation of the Northern California Engineering Contractors Association with the State of California. Those first Directors wrote down the ECA’s “SPECIFIC AND PRIMARY PURPOSES”:

1. TO ESTABLISH AND MAINTAIN HIGH PROFESSIONAL STANDARDS AMONG CONSTRUCTION CONTRACTORS.
2. TO ENCOURAGE SOUND BUSINESS METHODS, EFFICIENT HARMONY AND COOPERATION BETWEEN CONSTRUCTION CONTRACTORS, TENDING TO RAISE THE STANDING OF CONSTRUCTION WORKERS GENERALLY IN THE BUSINESS WORLD.
3. TO OPPOSE UNFAIR BUSINESS PRACTICES.
4. TO PROMOTE BETTER RELATIONS BETWEEN ALL THE INDIVIDUALS AND ORGANIZATIONS WITH WHICH CONSTRUCTION CONTRACTORS HAVE BUSINESS DEALINGS.
5. TO ADVVOCATE, FOSTER AND PROMOTE CONSTRUCTIVE LEGISLATION WHICH WILL INSURE THE SOUND DEVELOPMENT OF OUR STATE.
6. TO MAKE MEMBERSHIP IN THIS ASSOCIATION AN ASSURANCE TO THE PUBLIC OF THE SKILL, INTEGRITY AND RESPONSIBILITY OF ITS MEMBERS, BY REQUIRING THAT THOSE ADMITTED TO MEMBERSHIP SHALL HAVE ESTABLISHED AN HONORABLE REPUTATION ON THESE FUNDAMENTAL POINTS, AND BY MAKING CONTINUANCE OF SUCH MEMBERSHIP IN THIS ASSOCIATION DEPEND UPON THE MAINTENANCE OF SUCH REPUTATION, AND UPON FAIR DEALINGS WITH ITS MEMBERS AND WITH THE PUBLIC AND WITH THE EMPLOYEES.
7. TO PROMOTE AND DEFEND EQUITABLE LABOR PRACTICES BETWEEN MANAGEMENT AND LBOR THROUGHOUT THE INDUSTRY.

When I read these “specific and primary” purposes, they represent that those that founded the ECA were concerned about the workers. They wanted to make certain that being in the ECA meant you have some moral compass that includes making sure you are not doing business practices that take advantage of workers to gain an unfair business advantage. We “sell” that concept to local officials so they can count on ECA members being a cut above.

Wouldn’t it be nice?

So here is the moral dilemma: if you knowingly hire people that are not being paid what they should, and if you knowingly are hiring people and paying them cash so they do not pay income taxes, and if you are knowingly employing specialty services that come from outside the area instead of employing firms that live, work, play, go to school, and go to church right here in the community, are you at odds with what the first ECA Directors hoped ECA Members would do?

Yep.

I have appealed to all that still read my weekly newsletter to hire local, and in particular, hire fellow ECA Members first. Why? Because they are standing for the industry and the community and they are giving back to the community by being a member of the ECA. ECA members are donating or supporting our Community Relations projects that have touched the lives of so many less fortunate. It is ECA members who get together and honor those that have gone before them with awards and stories that young people starting in their careers can learn from as to the right way to do things. It is ECA members who were first to help fire victims and most of our firms did not gouge people with their methods of cleaning up their properties nor as to how much they charged them. ECA members are guided by their moral compass. That same moral compass our first Directors recognized and wrote about.

Why do business with companies that are not ECA members if the dollars are close to the same dollars in cost? Even if it costs slightly more, look at the return-those dollars stay in our community, pay for our schools, our roads, our churches, our charities. THAT IS WORTH SOMETHING.

So as we move on with 2020, I once again appeal to you to go to our website, look up the Membership Directory, and ask your Project estimators, your Contract Administrators, your project superintendents, your project and area managers, your purchasing agents, do business with those ECA firms.

Everyone knows it costs a lot to live here, so make certain you are doing everything in your power to pay the folks working on your projects what they deserve, make sure they get paid in a way that they will pay their fair share of income and local taxes, so the cost of living does not go up!

The key and only thing we can really do, is make sure you can look in the mirror every morning and ask
Mirror mirror on the wall, who is the fairest of them all”?

Have it be you!

That’s All Folks!
John