Wednesday, September 22, 2010

Taxing Times For Bell, California

City officials got arrested in a corruption bust in New Jersey-esque proportions. Eight officials, elected in nonpartisan elections, were arrested, including one who had to be removed from his premises after law enforcement had to use a battering ram to enter and effectuate the arrest, for misappropriation of $5.5 million in public funds.
Among those arrested were former city administrator Robert Rizzo, former assistant city manager Angela Spaccia, Mayor Oscar Hernandez, councilmembers George Mirabal, Teresa Jacobo, Luis Artiga and former councilmembers George Cole and Victor Bello.

"This is corruption on steroids," Cooley said.]

The charges are expected to be detailed at a morning press conference, according to a source with knowledge of the case who was not authorized to comment publicly. A witness told The Times he saw Councilman Luis Artiga taken away in handcuffs Tuesday morning.

A neighbor of Hernandez said authorities used a battering ram on his front door after he failed to answer the door.

"They broke the door down," said the neighbor, who only gave his name as Jose. "They knocked down the door and they brought him out in cuffs."]

For two months, the Los Angeles County district attorney's office and state and federal authorities have investigated Bell, where high salaries earned by former City Manager Robert Rizzo and other top officials have sparked widespread outrage. The Times reported last month that Rizzo was set to earn more than $1.5 million in 2010. Additionally, he gave loans totaling $1.6 million to more than 50 city officials, including himself.
The mug shots for the eight can be found here. Rizzo's lawyer says that the charges are politically motivated and that the prosecutor is running for attorney general in the state.

The scandal broke after it became public knowledge that this particularly poor municipality was paying exorbitant salaries and compensation packages to several public officials, including Rizzo. This is happening in a municipality where the average salary is about $30,000. When compared with Beverly Hills, you'd see that something is seriously wrong. The average salary in Bell is about 40% of Beverly Hill's ($93,327 versus $39,394), but Beverly Hills property tax rate is significantly lower.

This too is on the heels of a report by the State Controller that the city had systematically overcharged Bell residents in property taxes for years on end.
The overcharges were discovered during the initial phase of the Controller's audit into the City of Bell's finances. Property owners in the city paid an estimated $3 million in extra taxes during the past three years.

“While my investigation into the City of Bell continues, these unlawful taxes must stop immediately,” said Chiang. “Homeowners and property owners should not pay the price for this poor fiscal management.”

The Controller's letter explains that Bell's City Council began raising property tax rates in 2007 to pay for pension obligations, even though State law caps those taxes at the rate used in fiscal year 1983-84. Property taxpayers saw their assessments for pension obligations rise from .187554% in 2007 to .277554% in 2010.
It goes without saying that the residents were systematically fleeced by the city officials who used the illegally imposed tax revenues to apparently line their own pockets.

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