California's Wilson nixes letting libraries use assessment revenue to issue bonds.

LOS ANGELES -- Gov. Pete Wilson has vetoed a bill that would have created new assessment powers for California libraries, including the right to issue limited obligation bonds backed by the assessment revenue stream.

A veto message released by Wilson last Friday called the measure "a new tax masquerading as a benefit assessment."

The vetoed legislation, S.B. 566, was sponsored by state Sen. David Roberti, D-Los Angeles, on behalf of Los Angeles County. Roberti and county officials could not be reached for comment yesterday because of the Columbus Day holiday.

Library funding shortfalls have been aggravated by a state budget shift of $2.6 billion to schools from local governments in the current fiscal year. Many libraries throughout California have experienced serious budget cutbacks, prompting service cuts such as shorter hours of operation.

Giving libraries the ability to create benefit assessment districts would provide them with a stable method for financing construction and operations, according to the California Library Association and other public library lobbying groups.

A Senate analysis of S.B. 566 noted that a Los Angeles County special fire district recently was granted the right to levy benefit assessments..

The district "was able to stave off financial disaster through the use of its benefit assessment authority," the analysis says, and that S.B. 566 "would simply give libraries throughout the state the same financing options available to all other types of special districts."

But Wilson's veto message criticized the measure for excluding a formal protest procedure by taxpayers. Public agencies that create assessment districts usually give taxpayers the right to override the decision. Taxpayers may gather signatures, and if a certain percentage is obtained -- usually usually 5% to 10% of property owners -- the assessment district must be disbanded.

In response to taxpayer concern, the library assessment measure called for a vote once the district was operating.

But "this proposal provides for no protest [ahead of time], and the assessment could be in effect for up to two years prior to any vote being taken,"

Wilson said. "In the event that the assessment is voted down, there is no mechanism by which to refund the money already collected." Wilson said: "In short, this bill does not create a at all, but a new tax, which could be levied for two years without being voted on by the general public."

Public officials increasingly have turned to special assessment financings because they do not require a public vote. By contrast, parcel taxes and other special levies require a two-thirds voter approval under the California constitution.

The Howard Jarvis Taxpayers Association, one of several anti-tax groups that fought S.B. 566, believed Wilson "did the right thing" in vetoing the measure, said Kris Vosburgh, executive director of the Jarvis group, yesterday.

Vosburgh said the Roberti bill underscores a growing movement by local agencies to levy assessments as easy replacements for parcel taxes without the two-thirds vote.

Vosburgh said he has little sympathy with library proponents who are concerned that the veto could jeopardize library services across the state.

Parcel taxes can win voter approval if "local officials make good, strong arguments," Vosburgh said. "These things can be done if public officials go to the people and get their consent."

In Pasadena, Vosburgh said, a parcel tax to fund libraries obtained a 79.8% approval margin in a special election on June 22. The parcel tax will raise about $1.3 million a year.

At last Friday's California Public Finance Conference sponsored by The Bond Buyer, S.B. 566 was discussed in a panel on assessments.

Samuel A. Sperry, an attorney with Orrick, Herrington & Sutcliffe, asked an audience composed of public finance professionals whether they believed the library assessment proposed in Roberti's bill was more like a traditional benefit assessment or a parcel tax.

Standing at the dais, Sperry said his review of hands raised in response to a straw poll indicated that the audience, by a 10-to-1 margin, believed the proposed library assessment levy was more akin to a tax.

Panelists said that traditional assessments are levies on property owners who receive demonstrable benefits from improvements adjacent to their property, such as sewers, sidewalks, and street lights. Now, assessments are being proposed for a range of non-traditional applications.

Peter M. Detwiler, principal consultant the Senate Local Government Committee, told conference attendees that legislation pending before Wilson would create an assessment district to fight vine root disease in a wine-growing region of northern California.

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