Top 5 taxes you may see on the 2016 ballot


millionaires taxLast June, I wrote a column forecasting which tax increase measures might be on the Nov. 2016 ballot given the conversations going on then.

Time for an update.

As is nearly always the case in the political world, situations and strategies change. What’s being discussed most heavily today is not necessarily what will be pushed to the ballot for voters to decide in 2016.

By measuring fact, rumor and innuendo, I’ll offer my reading of the top five tax possibilities for the Nov. 2016 ballot.

First, a word about those that did not make the list this time. Previously, a soda tax was on the list, but that possibility seems to have faded for the moment.  Instead, advocates are considering labeling sodas with more information about the sugar content.

There is a constant buzz about restructuring the entire tax system and that has been heightened by the introduction of Senate Bill 8, by state Sen. Bob Hertzberg, D-Van Nuys. The bill would re-do the tax system, cut some tax rates and introduce a service tax.

Hertzberg hasn’t developed the plan in full as yet. Both the Left and the Right have attacked the idea. However, he also is working closely with the Think Long Committee for California, which has the resources to qualify a measure for the ballot. As of now, the idea is not ready for consideration.

To the list, then:

5. OIL SEVERANCE TAX. Previous Ranking #3.

Whether the oil severance tax initiative moves forward depends on one man – hedge fund billionaire Tom Steyer. He said he would rather work through the legislative process, but the bill would be unlikely to pass the Legislature.

Steyer also is said to be interested in promoting an initiative that would require a two-thirds vote in local communities to approve fracking for oil. While he has the resources to do more than one measure, the odds are he would focus on just one, if any.

4. SURPLUS! NO NEW TAXES. Previous ranking: Unranked

Okay, this is obviously not a tax-increase measure. However, with the recent announcement of an unexpected $1 billion in the state treasury many experts predict the state budget will have a surplus of $2 billion dollars or more. Under such conditions, some observers suggest new taxes won’t fly with the voters, so why try?

A lot will depend on the fiscal situation heading into next year’s budget. But even if the economy holds steady and the budget is in good shape, it is hard to imagine there won’t be at least one tax-increase measure on next year’s ballot. Still, the chances are more likely today than they were a year ago that a surplus could stall the tax-increase movement.

3. SPLIT ROLL. Previous ranking: #2

There still is an ongoing grassroots effort to promote a split-roll property tax requiring business property to be taxed on a different basis than residential property. While that’s going on, big players have yet to commit to funding such an initiative.

Certainly, there would be big money spent to oppose such a measure. So both sides are considering the issue carefully. The school establishment would have to step up to support a split roll and consider how a property tax on the same ballot with an extension of the Proposition 30 taxes would play.

Also, a state school bond measure may be on the ballot, attracting attention from the school folks. A couple of sources tell me a little air has come out of the split-roll effort. So while it certainly hasn’t gone away, it drops to #3.

2. CIGARETTE TAX: Previous ranking: #4

The possibility of a cigarette tax on the ballot has moved up simply because some of the items in front of it moved down in the rankings. There really hasn’t been a change in the emphasis of a cigarette tax by proponents.

They will try the legislative route, but if unsuccessful will consider going to the ballot, where they were very close to passing a measure the last time they tried. In 2012, Proposition 29 failed, but by a narrow margin of 50.3 percent to 49.7 percent.

1. EXTENSION OF PROPOSITION 30. Previous ranking: #1

No change here. Many insiders believe Proposition 30, the $7 billion tax voters passed in 2012, would be the easiest tax to pass since it is already levied. Especially if the sales tax piece is removed, many voters would not directly feel the tax’s pinch. That would leave only the tax increases on high-incomes, including the 13.3 percent top tax on millionaires.

All the spending interests may not be happy, since schools get most of the money. But extending Prop. 30 still stands as the most likely tax measure to be on the ballot. The biggest question: What will Gov. Jerry Brown say about continuing the “temporary tax”?

Follow Joel Fox on Twitter @1JoelFox1

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