CA Legislators Hustle More Tax Bills

APRIL 25, 2011

By KATY GRIMES

With another poll out today saying that voters want to vote on Gov. Jerry Brown’s tax extension increases, the media are mum about the many other tax bills slithering through the Legislature which would greatly increase every taxpayer’s total tax bill.

Highlights of the new Times/USC Dornsife poll include:

• * 70 percent of respondents said they supported a cap on pensions for current and future public employees.
• * 68 percent approved of raising the amount of money government workers should be required to contribute to their retirement. Increasing the age at which government employees may collect pensions was favored by 52 percent.
• * Among Democratic respondents, 71 percent supported increasing retirement contributions for future hires.
• * 66 percent backed a pension cap for both current and future workers.
• * However, fewer than half of the Democrats surveyed favored cutting benefits and raising the retirement age for current employees.
• * 60 percent of those surveyed, including majorities of both Democrats and Republicans, said they backed such an election.
• * 71 percent want reforms included on the ballot.

Legislature’s Tax-Increase Obsession

It’s unclear whether Gov. Brown’s $12 billion tax increase will be on the ballot, possibly in November. And even if it makes it to a ballot, the odds probably are against it passing.

But that hasn’t stopped legislators from pushing bills that would raise taxes, make it harder to cut spending or increase regulations.

Here are a few bills to watch out for, all authored by Democrats. The bill descriptions are explanation enough why we should be alarmed:

1. ACA 18 by Assemblyman Sandre Swanson of Oakland and SCA 5 by Assemblyman Joe Simitian of Santa Cruz. Either bill would lower to a majority vote Proposition 13’s two-thirds threshold for local bonds and parcel taxes.

2. SB 653 by Senate President Pro-Tem Darrell Steinberg. It would allow counties to impose new/increased general taxes, including an income tax with only a majority vote.

A Couple of Real clunkers

3. AB 438 by Assemblyman Das Williams of Santa Barbara. It would require that if any local governments want to privatize libraries, a vote of residents must be taken.

4. SB 448 by senators Mark DeSaunier of Walnut Creek and Loni Hancock of Oakland. It would require an individual who receives compensation to circulate an initiative, referendum, or recall petition to wear a badge stating, “PAID SIGNATURE GATHERER,”” and that identifies if and where the person is registered to vote.

More Taxes and Expenses

5. AB 579 by Assemblyman Bill Monning of Santa Cruz. It would prohibits mobilehome park owners from challenging a rent-control ordinance in court. And it would permit the award of attorney’s fees and other litigation expenses to a local governmental when the owner challenges the validity or application of a local ordinance or regulation, or initiative measure that regulates spaces rented.

6. AB 669 by Assemblyman Monning. Call it the Pop Tax. It requires a tax on soda — specifically on “bottled sweetened beverages” — at a rate of a penny per fluid ounce. So a 12-ounce soda would get hit with a 12-cent Pop Tax. The tax would be deposited (minus refunds and administrative costs) in the “Children’s Health Promotion Fund,” which this bill would create. And the bill would allocate the money to the State Department of Public Health and Superintendent of Public Instruction for childhood obesity prevention programs. It’s another mandated expenditure at a time when the state treasury is broke.

7. AB 153 by Assemblywoman Nancy Skinner, D-Berkeley (what happened to the Berkeley Free Speech Movement?). It would impose a sales tax aimed at in-state sales by what are called “affiliates,” which are state residents and businesses that sell items online at Amazon, Ebay and other services. The affiliates often are small Mom & Pop type operations. It would not affect Amazon.com’s own sales, which are regulated by federal law. (CalWatchdog January story: Online Retailers Are Tax Targets)

The Board of Equalization (BOE) estimates increased state and local tax revenues of $152 million in 2011-12 and $317 million in 2012-13. If this tax-increase passes, Amazon.com has said it would fire all its California affiliates.

8. SB 928 by Sen. Noreen Evans of Santa Rosa. It would grant counties the same local taxing authority as chartered cities. This bill would authorize the board of supervisors of any county to levy any tax that may be levied by any charter city. Legislators say this bill is needed to support schools, fire and police. And who could quibble with that?

But the elephant in the room is the total cost of all of these tax bills California residents and businesses are facing should they pass — and no one is talking about that.

“With California finally beginning to recover from the recession, it would be disastrous to open the floodgates for local income and excise taxes,” the California Taxpayers Association objected. “The state currently is collecting billions of dollars more in personal income taxes than it did the previous fiscal year, which is a great sign for the state — a thriving economy is the best source of new revenue to fund necessary government programs.”

Total Cost of the Tax Shocks

The additional total cost of these tax bills, and the danger they could wage on Californians, many already precariously perched on the brink of financial ruin, could devastate the state. While each bill eventually gets analyzed by legislative staff, no one at the Capitol appears to be adding up the total cost of all of the tax bills to taxpayers, including Brown’s tax extension increases.