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RUSSO INTERVIEW from page 3 ....................................... <br /> <br /> We would be tooking at guaranteeing revenue sources which ere more properly metched to the services provided. For <br /> example, property tax really is a reflection of the success ofany individual locality, to the extent that if property values are <br /> higher, property taxes also are higher. If a city does a good job in the way it trades-off industry vs. commerce vs. residential <br /> vs. open space, property values will be higher. A city that governs itself well will see an increase in property values. Them is <br /> no other stream of revenue that makes more sense for local government. <br /> <br /> Income taxes are an extremely volatile source of revenue, but it also more closely mirrors whether the state is doing a <br /> good job in being competitive or not being competitive. These are regional considerations. I don't think it's fair when critics <br /> of the League attempt to portray us as narrow-focused, unable to see the big picture. I don't think that's a fair criticism. <br /> We'd like to see a more proper alignment of which revenues go where, an alignment that aligns incentives appropriately and <br /> rewards success rather than subsidizing failure. <br /> <br /> Help our readers understand the significance of this issue for local governments. From the vantage point of <br /> your position as elected City Attorney of Oakland, elaborate on how California's current state/local fiscal arrang~ <br /> merits impact your city? <br /> <br /> The current fiscal structure is not,just bad for California's cities, it's bad for California. For example, Oakland has a large <br /> portion of its downtown that is not developed The current tax structure really doesn't motivate us to do the things we <br /> ought to be doing in the broader regional and state interest. Take the regional housing question, for example. Oakland <br /> should have every incentive to build housing. You've got the hub of the BART system right there. When you look on top of <br /> that BART station, there is nothing. You've got three highways circling this area and there is nothing. The reason there is <br /> nothing is because it is not financially sensible for a city to encourage new housing. As with most large urbanized cities, <br /> Oakland cannot meet the existing service needs of its residents. <br /> <br /> To bring in more housing to its urban core, particularly more affordable housing, which is where the need is crying out <br />in the Bay Area on the affordability indices, Oakland is left with an irrational decision. The region needs, in fact California <br />needs, for Oakland to build more housing. The problem: housing doesn't pencil out. The only thing that arguably pencils out <br />for a municipality is high income senior housing. That's because seniors with high incomes have a lot of disposable income. <br />They spend it near where they live. They don't go to school anymore. Their kids have already gone to school, so they don't <br />need schools, And they don't commit crimes, so we don't need police for them either. Pretty much any other type of <br />housing doesn't pencil out if you look at government as an enterprise balancing revenues against expenses. <br /> <br /> In MIR's interview with Darrell Steinberg about the demise of AB 680, which was a regional revenue sharing <br />bill, he addressed the need for regional governance, arguing that local political boundaries fail to embrace the <br />impacts of regional challenges like housing and infrastructure. As Oakland's City Attorney, are you able to think <br />and act regionally when so required? <br /> <br /> I think there are dramatic impediments to thinking regionally. California, more than most states, is completely <br />balkanized. We elect the bus company. We elect the train company. We elect the water company. I never quite understood <br />that, That balkanization creates many political fiefdoms, which makes it difficult for us to go forward. <br /> <br /> That being said, Darrell Steinberg is a very talented and very smart Assemblymember. He is absolutely correct to view <br />housing as a regional issue. The comments he made about the League were probably because he was frustrated and angry <br />seeing how effective we are. But this bill would not solve the problem. The problem is not going to be solved by punishing <br />those cities that played by the rules regarding sales tax. The problem must be addressed without moral,judgment. <br /> <br /> Continued on Page 5 <br />PAGE 4/PRIORITY FOCUS Visit the League's Official Web Site--www.cacities.org <br /> <br /> <br />