Five CA GOP state senators back $2 billion tax increase

June 10, 2013

By John Hrabe

With a Democratic supermajority, Republican votes no longer are needed to increase taxes in the California Senate. Yet in a strange development, five GOP senators backed a tax increase anyway.

SB 11 is a $2.3 billion tax “extension” co-authored by a Democratic state senator, Fran Pavley of Calabasas; and by a Republican state senator, Anthony Cannella of Ceres. It passed the full Senate, 32-5, with two not voting and one vacancy.

Of the votes, 27 were from Democrats, or 67.5 percent, which was above the two-thirds supermajority threshold in the 40-seat Senate to raise taxes.

Yet in addition to Cannella, Republicans voting for it were Senate Republican Leader Bob Huff of Brea and Sens. Bill Emmerson of Redlands, Jean Fuller of Bakersfield and Mimi Walters of Irvine. Although Cannella did not, the latter four all signed the Americans for Tax Reform’s Taxpayer Protection Pledge, a solemn promise never to raise taxes.

Total: Out of the Senate Republican Caucus’ small membership of 11, five voted for SB 11.

The Senate Republican Caucus’ own analysis identified the bill as “the continuation of billions of dollars of vehicle registration fees and tire taxes for eight years.” Yet not a single Senator, Republican or Democrat, spoke against the bill.

None of the Republican senators who signed the anti-tax pledge responded to CalWatchdog.com’s request for comment on their tax flip-flop. A spokesman for Huff referred comment to a YouTube video (provided below), in which Huff referenced his vote.

“What we did this week was we extended fees for smog abatement, registrations, tire purchases,” Huff said in a 40-second explanation of his tax extension vote. “I wouldn’t normaly do that. But the bill was tied to easing regulations, burdens imposed on gas stations, truckers, ag equipment. And so it was one of those situations where you were taking a bad situation and making it better. ”

GOP analysis: Tax extension is “hefty price to pay” 

Huff’s argument that industry incentives are worth a multi-billion-dollar tax increase is disputed by his own caucus.  An internal Senate Republican Caucus bill analysis obtained by CalWatchdog.com found:

“The continuation of billions of dollars of vehicle registration fees and tire taxes for eight years is a hefty price to pay. This bill would result in fee extensions of $8 in smog abatement, $18 for vehicle registrations, $10 on boat registrations, and $0.75 per tire on consumers annually until the year 2024.

The analysis included an all-caps warning that the bill imposed “VERY MAJOR STATE COSTS AND REVENUE INCREASES.” And it quoted this analysis from the Howard Jarvis Taxpayer Association:

“SB 11 has been keyed as a two-thirds vote tax increase. The cumulative impact of these exactions will result in a $2.3 billion tax extension.”

GOP Caucus: Not a tax increase

Bill Bird, a spokesman for Huff, denied the bill is a tax increase. “The pledge states the legislator will not vote to RAISE taxes. He didn’t,” Bird said of Huff’s vote.

This nuanced interpretation of what constitutes a tax increase is contradicted by none other than Huff himself. In 2011, when Senate Democrats proposed legislation to grant local governments the authority to raise taxes, Huff gave a fiery speech against what he dubbed the “I Love More Taxes Bill of 2011.”

“Our staff believe it’s in violation of Prop. 26, which reads, ‘Any change in state statute which results in any taxpayer paying a higher tax must be imposed by an act passed by not less than two thirds of all members elected to each of the two houses of the legislature,’” Huff said. “What are we doing? We’re creating something on a majority vote that will facilitate raising taxes.”

Huff even took time to acknowledge the nuance of the “I Love More Taxes Bill of 2011.”

“This in itself doesn’t raise taxes,” Huff said. “Local government already has the ability to raise taxes, but it gives them more taxes they can raise on a majority vote.”

Just a month ago, Huff was warning that high tax rates hurt the economy. “Higher tax rates and continuing high unemployment mean less money in people’s pockets and less money to propel the economy,” he said in a press release in response to the Gov. Jerry Brown’s May Revision budget proposal for fiscal year 2013-14, which begins on July 1. “The Legislature should spend less time on a growing list of additional tax proposals.”

Taxpayer groups: A tax extension is a tax increase

Patrick Gleason, the director of state affairs at Americans for Tax Reform, which organizes the “Taxpayer Protection Pledge,” said his group considers a tax extension a violation of the pledge that Huff, Emmerson, Fuller and Walters signed.

“Legislation that would extend a tax scheduled to sunset is a tax increase,” Gleason said in an email.

The Howard Jarvis Taxpayer Association adds that Republican legislators could face a backlash for breaking their promise to their constituents.

“We’re not sure legislators fully grasp how this vote will be perceived by all the drivers — most of whom are voters — in their districts,” said Jon Coupal, president of the Howard Jarvis Taxpayers Association. “The backlash will be severe.”

Huff is no stranger to taxpayers’ backlash for halfhearted promises. In 2009, some taxpayers launched a failed recall for what they considered Huff’s failure of leadership to protect taxpayers from the largest tax increase in California history. That was the $13 billion signed into law that year by Gov. Arnold Schwarzenegger, with the help of two Republican state senators and two Assembly members. In his rebuttal to the 2009 recall attempt, Huff clarified that he never voted for the tax extension, and therefore had not violated his tax pledge.

Huff also opposed Proposition 1A, a May 2009 initiative pushed by Schwazenegger that would have extended the tax increases. It was defeated heartily by voters, 65-35.

“While these reforms became linked to a two-year extension of taxes and packaged as Proposition 1A, Huff didn’t vote for the budget, the tax increase or the extension,” Huff’s recall rebuttal stated. “Bob Huff has not violated his pledge to not raise taxes!”

Huff vs. Huff: “Doesn’t Fix the Real Problem”

SB 11, Huff argues, is a compromise to offer temporary relief to struggling industries.

“I wouldn’t normally do that, but the bill was tied to easing regulations of burdens imposed on gas stations, truckers, ag equipment,” Huff said in his May 31 Capitol Comment. “It was one of those things where you’re taking a bad situation and making it better.”

In April 2011, for the same reason Huff opposed a tax extension proposed by Democrats during budget negotiations. He said, “I have often said an extension of the taxes doesn’t fix the real problem.”