The History and Analysis of Proposition 90 in El Dorado County

by Placerville Newswire / Nov 20, 2017 / comments

[Stephen J. Ferry]

Late in 2008 while working on the General Plan we were meeting in a local Civil Engineer’s office and it was there that I met a local land use attorney.  I asked him if he knew about Prop 90 and he said no, so I explained it to him and he said, “that will never happen in El Dorado County.”  Following that, in early 2009 our new Supervisor John Knight attended a meeting and I took him aside and asked if he knew about Prop 90.  Again, he did not know either so I explained it to him and he took interest and wanted to help. 

Following that, a group was created to support Prop 90, including the real estate industry and the chambers.  We met with Tim Holcomb and Karl Weiland, from the Assessor’s office to discuss this and they took a very neutral view of what we were doing and did not offer their support.  

I was the interim (2009) Chairman for the El Dorado County Association of Realtors Political Action Committee.  I took on the responsibility of creating the “White Papers” for the presentations to the county  and created the Stop the Drop (dropping property prices) campaign.  Basically the Assessor was required by Proposition 8 to reduce the values of properties as those values fell from 2007-2013.  The problem, of course was that the Prop 13 tax revenues were dropping and they were the major revenue for the county’s General Fund.  El Dorado County was entering deep financial straits.  

With great support from Katie De’Gunther (a local title executive now deceased and missed) rallying folks to the Board Chambers, the Board of Supervisors approved the first participation for a period of two years but after a couple of weeks we were notified that the County Council had made a mistake.  We had to do it all over again and a couple of the members of the board seemed to be stuck on the two year limit.  Prop 90 prevailed again being approved on a 5-0 vote to be put in place for five (5) years.   The reading of the ordinance had to occur and that was approved again by a 5-0 vote.  The Prop 90 Ordinance became effective on February 12, 2010 [sic].  Karl Weiland had inherited the Assessor’s Post from Tim Holcomb and he has done a wonderful job administering this program.  

After the five years had passed the board extended Prop 90 for 18 months.  There was opposition building that did not want seniors coming to El Dorado County and seemed to extend past seniors.  But after the 18 months the Board of Supervisors re-approved Prop 90 for another five years.  (I do not remember the vote.)  And now just one year later the Board voted to rescind the five year approval and cancel Prop 90 altogether.  

Let me speak to the benefit of senior housing that home builders like.  It is the traffic component that is so difficult to get past the California Environmental Quality Act (CEQA).  Of course there is less commute traffic with Senior Housing therefore making the constraint less onerous.  To maintain a Level of Service E (no stop and go on EDC freeways and other roads) becomes very difficult with new family or workforce housing.  Those folks have to commute.  

Has anyone seen the “elephant” in the room yet.  I only saw it a couple of weeks ago and this elephant is HUGE to coin a phrase.  Not through any of this did anyone say “What are the Economic Benefits attending to Prop 90 and what are the Economic Faults coming from Prop 90?  Ok, they did ask the question but they answered with “we can determine the actual tax benefit to the participating seniors (cost to the county) but we cannot determine the benefits to the county.”  Why is this important?  There has never been a Professional Economic Analysis of these two questions as regards Prop 90, only amateur answers.  I have a college degree but not in Economics.  El Dorado County needs to hire an Economist to do a paper on this subject.  Not to reinstate Prop 90 (although that would be nice), but to get a determination of the actual financial impact of any Economic Development Program.  You can bet the City of Sacramento got an Economist’s Report for the building of Golden One Center but, to my knowledge, El Dorado County has never done this.  We cannot allow El Dorado County to wallow in Economic Ignorance!!

Many people have said we no longer need Prop 90 because the financial crisis is over.  Although that crisis was the instigating cause of passing Prop 90 it is not the reason counties or other jurisdictions enter into Economic Development Programs.  Jurisdictions compete with one another for programs that bring money from one area into their target area (again, Golden One Center) to expand the local money supply and economy.  Money supply expands and contracts, pick which one you like.

So, what are the final figures on Prop 90?  Almost 700 seniors and their spouses will have made use of EDC’s Prop 90 program.  These seniors have to be 55 years of age or older.  The detriment of senior housing always comes down to emergency services, particularly ambulance service.  This is provided by the Fire Services within the county.  El Dorado Hills Fire Department says they are losing revenue because of Prop 90 and having to take on the seniors medical emergency problems and expenses.  The department is very organized and could certainly publish the numbers of Prop 90 seniors that have required services.  All they have to do is note the address involved in the emergency (not the recipient of services)  and cross reference it to the county assessor’s office.  Then the emergency services cost analysis would be complete and without violating HIPPA.  These questions would/should be answered in the Professional Economic Analysis.  

The Professional Economic Analysis would also address basic Economic questions and theories.   The theory of the “Gross Multiplication of Money” and the “Velocity of Money.”  These theories are real and need to be addressed along with many others.
http://www.investopedia.com/exam-guide/cfa-level-1/macroeconomics/multiplier-effect.asp —  http://econbrowser.com/archives/2010/12/velocity_of_mon 

Last, for those seniors who have come here, welcome to El Dorado County and when you get your hair done, or have a meal out, buy some clothes, become active in a place of worship, or buy a car, let the folks know that you came to El Dorado County proudly and that Prop 90 was a real help.  I’m glad you are here….  and so are the people who have invested their life savings in small businesses that you patronize.  

Respectfully, Stephen J. Ferry.
El Dorado Hills