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Call for a Regional Tax Pool Criticized

Sacramento: A proposal to share sales levies among counties and cities pits civic haves against have-nots.


SACRAMENTO — Drive by the Galleria at Roseville, a glittering new shoppers' mecca in that affluent suburb of the state capital, and you can practically hear the cash registers clanging from beyond the parking lots full of sport utility vehicles and luxury sedans.

Drive along Florin Road, just minutes away in Sacramento County, and see how the other half lives, as aging car dealerships and new immigrant-owned businesses battle long odds to enliven a fading commercial corridor.

It is a scene repeated throughout California--a handful of new suburbs become beacons of commerce, luring big-box retailers and auto malls that shower the city coffers with millions in sales taxes, while graying urban communities and less fortunate suburbs housing most of the population fight a losing battle to protect their tax base.

But here, for the 1.8 million people living in the six-county Sacramento metropolitan region, the lopsided, often cutthroat competition between municipal haves and have-nots could soon give way to a grand social experiment.

Assemblyman Darrell Steinberg (D-Sacramento) is pushing legislation that would force the entire region to share future increases in sales tax receipts. One-third of future sales tax gains would be divided strictly on a per-capita basis, another third would stay as is, and cities that build housing for the poor or protect pristine land from development would receive a bigger share of the remaining funds.

The aggressive campaign has angered half the cities in California and is being closely monitored by urban planning experts throughout the nation, who believe the approach could spread to other parts of the state and the country. It has also raised tensions in the Sacramento area, with some accusing Steinberg, a former Sacramento city councilman, of using his clout to benefit his hometown.

"We spend so much time and energy trying to one-up each other for the new retail development,'' Steinberg said. "The challenges in this region are so great--we have the fifth-worst air pollution in the country, some of the worst traffic congestion--we need to work together.''

Supporters say the sharing plan would foster regional cooperation and put a stop to competition among neighbors for the tax dollars that come from new Wal-Marts and outlet malls. The struggles can contribute to sprawl as money-starved cities expand their borders to make room for yet more mini-malls. And they sometimes even cost taxpayers, as government officials give retailers generous subsidies to lure them away from neighboring towns.

The Rich Get Richer

For example, more than $30 million in sales taxes generated by the Galleria at Roseville over the next two decades will go to the developers of the mall instead of the city under an agreement reached by the city's leaders. Also, Wal-Mart is relocating one of its stores to Roseville from Rocklin, the city next door.

''Everybody competes for these taxes, but only a few people win. That creates a growing disparity,'' said Myron Orfield, a Minnesota state senator and regional planning advocate who believes the California battle has national implications. "Places like Roseville keep winning bigger and bigger every year. And the losers have a harder and harder time providing government services.''

Opponents call the legislation pure socialism, a power play by the city of Sacramento to bend the rules of the sales tax game in its favor. What is being billed as a feel-good solution for warring municipalities has instead turned deeply contentious, they note, with cities up and down the state hiring high-priced lobbyists and lining up on opposing sides of the legislative debate.

''This bill benefits no one but Sacramento. That's not regional planning, if you ask me,'' said Martie Dote, a city councilwoman in Woodland, one of the suburban communities that would lose money under Steinberg's bill. "This is very divisive."

The political debate over the measure, AB 680, has split sharply along party lines, with GOP legislators calling it an attack on the suburbs. Assembly Republican Leader Dave Cox (R-Fair Oaks), who represents some of the suburbs affected by the sharing plan, has slammed it as a "redistribution of wealth," and made killing the bill a party priority. Nonetheless, Steinberg believes he has enough Democratic votes to get his bill through the Assembly this week, which he must do to keep it from dying. Democrats hold 50 of the Assembly's 80 seats, so no GOP support is necessary.

Steinberg's chances improved last week when Assemblywoman Helen Thomson (D-Davis), who represents some of the region, indicated she would support an amended version of the bill. A vote could come as soon as today.

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