I posted last week on the recent Inside OC interview with Mayor Tom Tait. Another topic raised by host Rick Reiff was the cit council’s approval last summer of a development agreement with Disney that effectively immunizes Disneyland visitors from imposition of a city entertainment or “gate” tax until at least 2046, and possibly until 2061 if Disney invests $1.5 billion in the Disneyland Resort by certain deadlines.
It’s important to note a few things before continuing on. First, Anaheim has never had an entertainment tax. Secondly, this ban wasn’t really new, but a continuation of an existing ban stemming from a 1996 agreement between Disney and the City of Anaheim creating a framework for Disney investment in the Resort, including Adventure Park, the Grand Californian Hotel, the Downtown Disney District in 2001 and ultimately the addition of Cars Land to California Adventure. Furthermore, Disney has already hit the milestones in the latest development agreement.
When Reiff asked him why he opposed the de facto extension of the entertainment tax moratoriam, Mayor Tait gave a number of reasons:
“No other company that I know of…has a veto power over the people on the vote of a tax.”
The problem with this reasoning is it’s wrong. Disney has no such veto power over the people or their representatives on the city council, and the agreement doesn’t grant it. It is simply untrue to make such an assertion. Anaheim voters are free to approve a gate tax if a future council or political organization were foolish enough to place one on the ballot. The agreement renders such a move self-defeating becuase the city would have to pay Disney an amount equivalent to the revenue from the gate tax – and that would simply transfer money from Disneyland visitors to Disney.
In other words, the agreement creates a powerful disincentive for the city to pursue a destructive policy of taxing people simply because they are visiting Disneyland. Such a tax would be regressive, destructive and certain to get larger over time as council progressives dream up new ways to spend other people’s money.
“I’m definitely not for limiting the right of the people to vote for a tax, whether you agree [with] it or not.”
This is an interesting statement, and I’m not convinced the mayor has fully thought through its implications. For example, Proposition 13 imposes several limitations on the right of the people to vote for a tax. It prohibits them from raising property taxes for more than 1% annually. It limits that right by requiring a two-thirds majority of voters to enact a special tax, and it prohibits the state legislature from raising taxes by less than a two-thirds majority of both houses.
The Anaheim City Charter prohibits the imposition of new or increases taxes by less than two-thirds of the voters.
These are all limitations on the right of the people to vote for tax, and most people – especially adherents of limited government – believe it is wise to have such limitations in place. Conservatives fight to protect these limitations on “the people’s right to tax,” while denizens of the Left relentlessly seek to remove them as impediments to the growth of government.
If the mayor were to apply his stated principle across the board, he would have to support the repeal of Proposition 13 and the above-mentioned provision of the city charter – which he does not. What we’re left with is intellectual confusion and cognitive dissonance.
The mayor is basically arguing for the unlimited right of taxation by plebiscite – a notion that is profoundly at odds with the Revolutionary principles upon with the Founders built the Republic. It is, instead, an idea grounded in progressivism, which rejects the principles of the Founding.
Our Declaration of Independence [states] all are created equal. In this case, I suppose one company is more equal than others.
Let’s start with the obvious: the Declaration is talking about individual human beings, not companies. The mayor makes the same argument here as he did against the GardenWalk agreement, and as I pointed out in the previous post, Mayor Tait has supported reforms that afford certain types of “cool” businesses regulatory advantages not available to other, less cool businesses.
Furthermore, this appeal to the principle of equality in the Declaration is strange given the mayor’s embrace of changing the city’s election law in an effort to produce councilmembers of a preferred ethnicity – which is in opposition to the Declaration.
Disney shouldn’t have brought this forth in the first place. Over 60 year history of the city with Disney, the city has not passed a tax, but the people have the right to do that. It’s a principle matter. Once you do it for Disney…an immigrant comes to Anaheim wants to open a restaurant, shouldn ‘t you be given the same prohibition on taxes for 45 years? It’s a principle thing.
Disney would have been foolish not to seek an extension of the entertainment tax now. For starters, there’s the obvious reality that the 1996 moratorium will expire in a few months. Tait is correct there has been no entertainment tax during the city’s 60-year history with Disneyland. So what? Mayor Tait is constantly talking about how there have never been by-district council elections in Anaheim’s 158-year history, and he’s positively ecstatic about bringing that history to an end. That Tait’s pro-district coalition partners were furious and apoplectic at the prospect of Disneyland visitors being put beyond their taxing grasp for 45 years confirms Disney’s wisdom in seeking a certain tax environment while there is still a pro-business majority on the city council.
Reiff asked if Tait had prevailed, would it cost Anaheim jobs and the support of the business community. Tait response:
I think Disney is gonna do what they’re gonna do whether they have that or not. I think they would go for it with their big expansion with their Star Wars park, whether they had this provision or not. For example, in Orlando, they’re building that park in Orlando, and Orlando, in the state of Florida, that has a six-and-a-half percent sales tax on the admissions. In Anaheim it’s zero. So of the 100 dollar ticket price, zero taxes are paid. I’d say they have a great deal in Anaheim.
Mayor Tait and other critics of the gate tax ban have repeatedly made this claim. The reality is they have no idea what Disney would have done absent a continuation of the entertainment tax ban. Disney is a global media conglomerate. Building a Star War Land Disneyland is only one of any number of opportunities for Disney to productively invest $1.5 billion.
Furthermore, Tait’s the Orlando comparison is a red herring that actually undermine’s his point. The state 6.5% sales tax on admissions is a certainty that Disney can factor into its calculations. the opposite was true in Anaheim: would the lack of a gate tax continue in the future? Maybe. maybe not. But it doesn’t take a psychic to see the Anaheim City Council will be tilting in a pro-tax direction with the advent of by-dsitrict elections.
I think there are things that are more important than money, frankly, and that’s the principles upon which this country was founded, and about treating people equally, and the right of the people, in the future generations to have a say in their city. I have a new grandson who will be 47 before they can vote for any new tax on Disney.
Maybe I missed it, but I’m not aware of anyone in Anaheim politics stating that money is more important than the principles of the American Founding. And at the risk of being repetitive, how does one square “treating people equally” with using the race and ethnicity of a certain segment of Anaheim’s population as the criteria for drawing council districts an deciding which ones will be on the ballot first? It would be interesting to see the mayor treat his leftist political allies to a discourse on the principles of the American Founding and watch their reaction.
The right of future generations of Anaheimers to “have a say in their city” remains unimpaired, notwithstanding hyperbolic alarmism to the contrary. And the fact that it will be 47 years before a new tax can be imposed on visitors to Disneyland ought to be cause for celebration in this overtaxed republic, rather than consternation and handwringing.