‘More illegal taxes by Bell found’ (September 17)

The following is an analysis that is part of a graduate thesis. Learn more.

This was a relatively straightforward article dealing with another official opinion by the state controller. The primary issue at stake was: “What is the controller’s office’s view of the legality of Bell’s sewer fees?” (This view of the issue is probably fairer than the broader “Were Bell’s business taxes legal?” as the article addresses only the controller’s views.)

The reporters’ conclusion was that the controller believed the taxes to be illegal, and, as with the Sept. 3 article, the evidence came from a letter from the controller, John Chiang, to the city. According to the reporters, the letter said that “the city had failed to get the required voter approval as it hiked business license taxes by more than 50% over the last decade” (2).

For long-term followers the Times series, a second importance piece of evidence was quotes and paraphrases from “city officials” and from Pedro Carrillo, then Bell’s interim city administrator:

City officials said Thursday the latest finding was a financial setback and that they were working with state officials to form “a relief plan” to deal with refunds and the loss of future revenue from lowering taxes that were illegally raised.

“Today’s finding is another potential problem for us,” interim City Administrator Pedro Carrillo said, adding that the immediate effects are unclear. Carrillo said he would consider “any and all means” to balance the budget but declined to say if layoffs or cuts to city services were imminent. (4–5)

These quotes didn’t necessarily demonstrate any conclusions about Bell’s taxes or the controller’s view of their legality, as the city doesn’t get to decide whether their taxes are legal. But the quotes would have been important for anyone who followed the series and caught the premature accusation by Times reporters on Sept. 3 that Chiang had found Bell’s sewer taxes to be illegal. Here, both city and state appeared to be on the same page, so there is less doubt that some important part of Chiang’s letter was omitted or glossed over.

So the reporters adequately demonstrated their first conclusion; they didn’t return to the issue in the story. They did present a second issue, though: “What is the city’s financial position in light of the new findings on illegality?” The reporters write:

State auditors Thursday said they had found a third instance in which the city of Bell collected taxes illegally, bringing to $5.6 million the amount owed to taxpayers and raising questions about how the struggling town will balance its books. (1)

Fairness dictates that the conclusion (that the finding “rais[ed] questions about how the struggling town will balance its books”) be taken more as a bit of journo-speak than as a claim unto itself. Otherwise, the argument would have fallen on its face because no such questions, or even a question mark, appeared in the story. The more charitable reading would have the reporters claiming that the finding “raises the question of how Bell will balance its books.” The reporters did offer evidence in the story demonstrating that the latter question became legitimate in light of the controller’s finding.

The first piece of evidence supporting the claim that whether Bell can balance its books was an open question came from Carrillo, who was quoted and paraphrased as saying the city “would consider ‘any and all means’ to balance the budget” (5). This quote in itself was pretty sufficient to demonstrate that Bell’s financial balance in question: Carillo said he didn’t know how the city will maintain stability.

It could be said, though, that questions regarding Bell’s budget imbalances might have existed even before the controller’s findings regarding business taxes. How could the reader know that the budget wasn’t already in trouble? If it had been in trouble, the better-justified conclusion from the reporters might have been that the controller exacerbated or added urgency to the budget question, but not raised it.

There is not much for readers to go on here, but the reporters hinted at questions surrounding Bell’s budget to be a new one, not an exacerbated one, in paragraph 14:

The city expects to refund the $2.9 million in overpaid retirement taxes from its estimated $5 million in reserves. But Carrillo said he hopes to avoid draining that fund by having to also return all $2.1 million in business tax overcharges disclosed Thursday.

Which suggested that the city had a plan for handling controller-induced shocks to their budget — there were no questions about the matter — that the new finding upended.

But analyzing whether the reporters demonstrated that the question was “newly raised” seems like unnecessarily splitting hairs of what is a minor issue of timing. Regardless of when the question arose it existed by the time of the story. The reporters here served their readers well by alerting them to the existence of illegal taxes and a serious budget problem Bell faced, and the reporters did so with strong and germane evidence.

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