Representing an alternative view on BID
After advising the Business Improvement District committee the lawsuit contesting the BID, and my participation by being named as a defendant, I was met with a couple board members who supported my rights, but the majority voiced an opinion that I should no longer be on the board. Some stated they felt “blind-sided,” others felt I was “disingenuous.”
The claim that I am being disingenuous couldn’t be further from the truth. The fact is I originally declined to be named in the lawsuit, feeling it might compromise my position as a BID board member. After some reflection, it occurred to me that action would be the most disingenuous of all! It has been my contention from the very start that this BID is illegal. To publicly bail out on what I have been saying all along, while privately supporting those actions would have been the height of hypocrisy. It is my hope that fellow BID board members, and the community in general, will respect my convictions … even if they disagree with my point of view.
I certainly did not “blind-side” anyone. I have not been a mole, secretly infiltrating enemy camps, only to turn traitor on those whose trust I have gained! I have been an outspoken critic of this BID from the start. I have frequently stated I think the BID is unfair and unlawful. I tried very hard to change the system from within and even developed an alternative solution to try and avoid this lawsuit. But I was politely heard, then respectfully put aside. I have pushed for patience in creating a fair BID assessment plan, but was told it is “unwise to pass over the good while seeking the perfect.” I have repeatedly said this BID is unlawful, but was told they followed existing law. Yes, they did all the right steps, held all the right public meetings, and even conducted the ridiculous “protest,” where not voting is the same as a yes vote. Just because all the procedures were followed does not make it legal, and it certainly does not make it right!
First of all, the BID was never meant to be utilized as a citywide taxation tool. The law clearly states that only businesses that benefit from tourism shall be taxed. It was argued by proponents of the BID that everyone in a tourism-based economy benefits either directly or indirectly from the tax. However, the BID law states that assessments are not taxes for the general benefit of a city, but are assessments which confer “special benefits” upon businesses for which the improvements and activities are provided. In a legal opinion from “Howard Jarvis Taxpayers Assn. v. City of San Diego” the court addresses these benefits. The judges stated a special assessment (the BID) is levied against property “particularly and directly benefited” by a local improvement. They went on to say “The rationale of special assessment is that the assessed property has received a special benefit over and above that received by the general public. The general public should not be required to pay for special benefits of the few, and the few specially benefited should not be subsidized by the general public.”
The point was again emphasized in “Evans v. City of San Jose.” In that opinion, judges stated the reason a BID is exempt from Proposition 13 is because a discrete group receives benefit. The opinion reads “The public as a whole may be incidentally benefited, but the discrete group is specially benefited by the expenditure of these funds. The public should not be required to finance an expenditure through taxation which benefits only a small segment of the population. If it is asked to do so, it must agree by a two-thirds vote.”
The law to me seems quite clear.
It is equally clear the city has not fulfilled its duty to adequately demonstrate how my business, or any of a thousand other businesses who do not see tourists, “particularly and directly” benefits from tourism. In fact, according to Chapter 3 in “A Planner’s Guide to Financing Public Improvements,” distributed by the Governor’s Office of Planning and Research, this point is emphasized: “The agency should carefully document the special benefit which each assessed property will receive. Pursuant to Proposition 218, the assessment cannot finance improvements or services of general benefit. Agencies should approach this assessment act with caution and a strong opinion from counsel before choosing not to comply with Proposition 218.”
I have also repeatedly stated that the different way in which lodging is assessed starting in 2006 (they have no assessment this year) is unfair. A pass-through tax paid by tourists as part of a hotel tax is not the same as a business being taxed directly out of pocket based on gross revenue. This inequitable form of taxation must also be addressed in any future BID proposals.
The simple fact that the proponents’ main argument is “Everybody benefits from tourism” automatically disqualifies it as a BID assessment, and is instead a tax for general benefit. Any new tax needs a two-thirds majority vote. I would be happy to publicly debate this topic with City Council members who unanimously approved the BID, or anyone else who thinks my logic is flawed.
And to answer the question of my future on the BID board, I have no intention of backing away from those responsibilities. If the court rules in our favor, I will enthusiastically be a part of creating a better solution to our city’s marketing problems. If the BID is deemed to be legal, then I will continue to work hard to make it as fair as possible. I will continue to be a voice for those who feel as I do. Not as an obstacle, but as an active member with a different point of view.
I have not been, nor do I plan to be, an obstructionist.
– Pat Martin is a South Lake Tahoe resident.
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