Tax Sharing Revenue Plan Falls Apart

An innovative agreement between Lancaster and Palmdale to share future sales tax revenues has disintegrated, leaving officials scrambling for explanations and alternatives before the Nov. 4 election, Lancaster Mayor Frank Roberts said Thursday.

After shaking hands on the proposal in August, Palmdale officials repeatedly canceled meetings with Lancaster officials to finalize details, and a formal, written agreement has never been drafted, Roberts said.

Although no one representing Palmdale could be reached for comment Thursday, state Assemblyman George Runner (R-Lancaster), who represents the Antelope Valley area and has served as a mediator between the two cities, confirmed Roberts’ assessment.

“We thought this was the way to go, it fell through,” Roberts said.

Backers of the proposed arrangement say it would have ended the expensive bidding wars that pit California cities against each other in competition for businesses. Those “poaching wars” typically feature one community offering tax breaks, loans and other incentives to lure big retailers away from neighboring towns.

The sharing plan in the Antelope Valley was so novel that Roberts reported being besieged by fellow public officials at a meeting this month of the League of California Cities. They saluted his vision and wanted to know how he had managed to put aside the competitive urges that have intensified statewide since Proposition 13 and other measures have limited the amount of tax revenue that cities can collect.

“I finally had to say, ‘It’s off. Palmdale called it off,’ ” Roberts said. “And everybody said, ‘Really? You would have been the model.’ ”

He said he last met in person with Palmdale Mayor Jim Ledford Aug. 14 to discuss the proposal but has not been able to speak directly to him since then. The upcoming election, in which two Palmdale City Council seats and Ledford’s position are being contested, may have caused nervousness about an innovation bound to draw controversy, Roberts suggested.

Meanwhile, nearly the entire Palmdale administration spent much of Thursday afternoon making a pitch to a visiting company trying to decide whether to locate in Lancaster or Palmdale, according to office assistants who took phone messages.

The same company, an electronics firm involved in an anonymous bidding process, visited Lancaster Thursday morning.

Revenue sharing in the Antelope Valley may not be dead, however, if Lancaster Councilman Michael Singer has anything to say about it. Singer has written a proposal, scheduled for discussion at Tuesday’s City Council meeting, that would revive tax revenue sharing with a “per-capita” breakdown replacing the original agreement’s 50-50 split.

That means Lancaster, with a 1990 census population of 97,291, would subsidize the sharing deal by giving between $750,000 and $1 million a year to Palmdale--population 73,314.

Singer said Palmdale officials backed out because they feared navigating uncharted tax waters with a lower population--and therefore less ability to attract businesses--than their neighbor to the north. The per-capita proposal, he argued, would level the field.

“We will never be on an even par,” Singer said. “There will always be this jockeying back and forth to get the upper hand. Sooner or later we have to say, ‘Enough. We have to stop.’ ”

But proponents of the original agreement say Singer is pandering to Palmdale at the expense of Lancaster taxpayers.

“It seems to me that he should be on the council of the city of Palmdale,” said Roberts, who opposed Singer in the mayoral race. “He’s doing a great job for them.”

Runner, who is pushing state legislation to enable cities to form revenue-sharing alliances without the approval of voters, agreed.

“It baffles me as to why a city councilman in Lancaster wants to give away a million dollars a year,” Runner said. “Being a citizen of the city of Lancaster, I would be appalled. To give away money right now. . . . Some city services would have to go to do that.”

The idea of sharing tax revenue in the High Desert has surfaced periodically in recent years. Lancaster officials say they lost $500,000 a year in sales tax income when Palmdale lured four car dealerships in the late 1980s. That blow followed the loss of Sears, Roebuck & Co. and JCPenney to Palmdale.

But Palmdale recently lost two car dealerships to its neighbor.

“These cities have always had a competitive spirit,” Roberts said. “It goes back to the early days of school sports. You generally don’t give away your good players. I don’t think that’s the American way. The American way is competition.

“On the other hand, if you save tax money and you make it so that the people vying against each other make it fairer for both, it’ll make sense.”

Runner said cities have few other ways to raise revenue other than by increasing the take on their 1% share of the state sales tax generated within their borders--8.75% in Los Angeles County and 7.25% in many others. When faced with a potential threat to that piece of the pie, they retreat, despite the long-term consequences.