James Vanderbilt Should Reconsider* the 2/3 Tax Vote Measure, Part 2: Here’s Why

Vanderbilt, Part 2 cover4. The Plan for This Part 2

Part 1 of this short series presented the recorded basis for James Vanderbilt’s decision to cast the deciding vote in favor of placing Kris Murray’s “Anaheim Taxpayer Protection Act” — an official mis-naming that Vanderbilt successfully got eliminated — onto the ballot, where it will tie the hands of future City Councils until the City is underwater.  (I mean literally underwater, from rising oceans, .  Figuratively, this measure could put Anaheim financially underwater a whole lot earlier than that.)

Here in Part 2, we’ll explore why Vanderbilt — based on his own excellent stated leadership values — should have voted the other way.  Part 3 — well, you’ll just have to wait a little while.

Here, from Part 1, are Vanderbilt’s stated tenets:

So what I try to do is fall back on three basic tenets that I think would help guide me (and hopefully anybody else), which is my thinking that, on these measures where we’ve had strong disagreements, to fall back on.

One is being honest, another is a matter of being fair, and then the third one: if there is disagreement, that the voters should decide – and let that be the final verdict when the Council is in an area of disagreement.

We will take these in turn.

5.  Murray’s “Tax Protection” Plan Was Not Honest

When Vanderbilt voted on Murray’s plan, he may have believed that the Council was serious about financial stewardship of the City: meaning, from his viewpoint, low taxation and low spending, eliminating waste without shortchanging essential city services.  But in the minutes following — once his vote was already in the bag — he had reason to realize that this wasn’t true.

First, with Vanderbilt’s cooperation, Councilwomen Murray and Kring  voted to handcuff future Councils from imposing, extending, or raising taxes — and the only tax that 2/3 of the public might conceivably wish to introduce is a gate tax (a sales tax on admissions to amusements) like the one Disney World has in Orlando, so no discussion of other prospective tax hike really matters.  (And let’s be honest and recognize avoiding a gate tax involves Disney SAVING SO MUCH MONEY that it might be worth their spending MANY MILLIONS OF DOLLARS  to see it pass if it’s on the ballot.)  Then, joined by Jordan Brandman, the Council turned right around and voted not to eliminate the “bond loophole” that allows three Councilmembers to put the City on the hook for billions of dollars of debt if they want to.  (Vanderbilt voted against this too, but only after they rejected his amendment to remove what he considered to be a biased ballot title.)  Then, without Vanderbilt’s vote, the Council voted not to put massive (and massively selective) hotel subsidies to a public vote.  Then, Murray and Kring voted to leave the City’s negotiator with the Angels (who seemed to be representing the other side of the bargaining table) in as the head of negotiations, despite the addition of legendary attorney Wylie Aitken to the City’s team.

Murray and Kring are not serious about fiscal stewardship of the City.  If Vanderbilt did not know that at the moment that he cast his vote for Murray’s proposal, surely he knew it an hour later after the rest of the above had transpired.  (Brandman is at least spared from a charge of hypocrisy here; he wants more money to come into the City so that it can be spend on projects he favors.)

But the Pringle Team was even more dishonest than that.  Something up has come up since the April 7 meeting:  the first shoe has dropped.

That surprise is the sudden discovery that the Council Majority plans to come back to the City Council to seek $2 million from the General Fund because its projections for revenue from ARTIC — as predicted here and elsewhere — were so MASSIVELY FLAWED.  And these in turn become a DRAMATIC AND COMPELLING EXAMPLE of why the City cannot responsibly foreclose on any possibility of a gate tax to cover future budget shortfalls: BECAUSE THE BILL FOR THE COUNCIL MAJORITY’S RECKLESS SPENDING IS ALREADY NOW COMING DUE.

“Surprises” like this do happen — although this one is not actually a surprise.  It was always foreseeable — and the timing was probably planned for AFTER the vote on Murray’s proposal, on which they needed Vanderbilt’s vote.

How did this deficit of $2 million for operation of the first year of ARTIC alone come into being — and is it any indication that the City really DOES need the revenue generation activity that Murray’s proposal is designed to prevent?

Well.  The revenue numbers for ARTIC were deliberately skewed by City Staff, by integrating ridership figures for a high speed rail project they knew would not factor into this project for decades, if ever. Really — Cynthia Ward found a “smoking gun” email in a Public Records request: email of Natalie Meeks, Linda Johnson, Jamie Lai, and Darrell Johnson, dated Monday, January 11, 2010.

And here’s another shoe waiting to drop, about which Vanderbilt was probably not informed before the vote on Murray’s measure.

The Council also had not been made aware that 1997 bonds for the California Adventure Disney expansion are NOT flat linear in their payments, as the Finance Director as repeatedly misrepresented.  In many cases payments have NOT YET EVEN BEGUN! (We the public would be more likely to know that sort of thing if we got a report from the City Treasurer who deals with the bonds — instead of the Finance Director who pays the bills with the money left after we have paid the (back-loaded) bonds.

How the HECK were we supposed to pay back the balloon payments on these Capital Appreciation bonds, once the payment amount skyrocketed?  Funny story.  What we had was the ability to impose a Gate Tax, if appropriate, after 20 years.  That is: “in 2016.”

That’s right — the 1996 agreement included a 20-year moratorium on the Gate Tax.  (Murray insists she did not know about this and that it was not the motive for her proposal, despite that it is her best friend and political collaborator, Disney’s Governmental Affairs chief Carrie Nocella’s BUSINESS to know about it.)  The moratorium ended just in time for a 2016 vote to allow Anaheim to cover the suddenly huge bond payments — as a new series of 1997 bonds begins payments beginning in 2017. We believe this was by design.

If the ARTIC project hitting our General Fund by $2MM is a bad thing, perhaps someone can explain where the funding for these upcoming payments will come from? Did Staff somehow forget to mention THAT highly reasonable potential reason for wanting to make sure the gate tax might be enacted down the road, should the rosy assumptions of revenue projections not meet expectations — as we already know is the case with ARTIC?

When he voted two weeks ago, it is likely that Councilmember Vanderbilt didn’t know about the huge (and probably persistent) ARTIC shortfall, and perhaps not about the rest.  Great pains have been taken to spew out smoke screens to conceal this information from the public.

But now, if he reads this, he knows.  He knows that the criticisms of the Council’s reckless spending, which will place such a great burden on future Councils, have been borne out.  He has seen just the first shoe drop — of which will be many such shoes — and he should probably realize that this discovery wasn’t “sudden,” but was deliberately held back until after Kris Murray’s motion rendering practically impossible any future gate tax (or other taxes) had passed — with his support.

What he knows now is that he was used and, by omission, deceived.  Should Dishonesty Pay?

6.  Murray’s “Tax Protection” Plan Was Not Fair

I believe that Vanderbilt, like Tom Tait, prides himself in being a “steward” on behalf of Anaheim.  What does “stewardship” mean?  It means taking into account not only the interests of people today, but the interests of people tomorrow and next year, and next generation and on as far down the road as can reasonably be foreseen.

A government action that takes from the future to give political benefits to politicians today is not fair.  For the Council to brag about building more parks and firehouses with the Convention Center bond money — when that money for what are supposed to be “current money” projects will be paid back by future generations at a high premium for benefits that they will not likely enjoy — is unfair.

What’s worse, though, is denying that future government the means to solve the economic problems created by today’s Council Majority.  And that’s what Murray’s proposal would do.

A Gate Tax — someday, not necessarily soon, but someday — may very well be Anaheim’s best option to close a funding gap in the future without ending City services or selling off City Hall and the Convention Center to private interests or declaring municipal bankruptcy and possibly leaving the pension funds of today’s City employees drained.  (People used to assure me that the latter couldn’t possibly happen.  But now judges are openly discussing that possibility.)

If it’s the best option, and so compelling that 2/3 of the public will support it, then let it pass.  But if Disney is able to use its billions to elect just three people on a 7-member City Council who will, like Kris Murray, put Disney’s interests above Anaheim’s, then they can prevent such a measure from EVER coming from the Council to the voters.

That’s unfair.  That’s what Vanderbilt was tricked, in my opinion — as I’ll express below — into supporting.

7.  Murray’s “Tax Protection” Plan Prevents FUTURE Council Disagreements from Going to a Public Vote

I have to admit that I’m impressed with Vanderbilt’s idea that when a Council seriously disagrees, the best resolution is for a matter to come to a public vote.  That’s a good guideline.  Of course, the effect of Murray’s proposal is to HONOR THAT TENET THIS ONE TIME SO THAT IT NEVER HAS TO BE HONORED AGAIN!

When does Murray’s proposal really matter?  Only under one condition: when 2/3 of the public is likely to favor a proposal, and 4 members of a future 7-member City Council want them to get to vote on it and the other 3 members do not.  If only 3 of 7 members favor it, it can’t get onto the ballot even under the current rules; if 5 of 7 favor it, it can get onto the ballot even under the new rules.

That is as “divided” as a Council can get!  And yet the effect of Murray’s proposal is to ensure is that under those conditions in which the Council is so deeply divided, the matter WILL NOT GO TO THE PUBLIC!

Vanderbilt’s tenet is an honest, decent, and worthwhile guideline.  But by going along with Murray’s plan, he honors the tenet once so that next year’s electorate can vote to make sure that it will always be violated, under these conditions, forever after!

8. OK, But It’s Already Over, Right?  Why Is OJB Busting Vanderbilt’s Chops Like This?

Because it’s NOT yet over!  Something CAN still be done!  But Vanderbilt is the only one who can do it!  And THAT’S what we will reveal in Part 3!

About Greg Diamond

Somewhat verbose attorney, semi-retired due to disability, residing in northwest Brea. Occasionally runs for office against bad people who would otherwise go unopposed. Got 45% of the vote against Bob Huff for State Senate in 2012; Josh Newman then won the seat in 2016. In 2014 became the first attorney to challenge OCDA Tony Rackauckas since 2002; Todd Spitzer then won that seat in 2018. Every time he's run against some rotten incumbent, the *next* person to challenge them wins! He's OK with that. Corrupt party hacks hate him. He's OK with that too. He does advise some local campaigns informally and (so far) without compensation. (If that last bit changes, he will declare the interest.)