Despite record surplus, Gov. Newsom wants new water, phone taxes

Gov. Gavin Newsom’s has called for a first-ever water tax and an added fee on phone bills at a time when the state is enjoying what recently departed state Legislative Analyst Mac Taylor called “extraordinary” budget health. Newsom said last week that experts now forecast a $21.5 billion budget windfall in 2019-20. Until recent years, the optics of asking the public to pay more with an overflowing budget would have seemed impossible to overcome.

Specific details have not yet emerged on Newsom’s plan, but it’s expected to be similar to a rejected 2018 proposal from state Sen. Bill Monning, D-Carmel, to tax residential customers 95 cents a month to help fund water improvements in rural farming communities in the Central Valley and throughout the state.

It would raise about $110 million to get clean water to what the McClatchy News Service estimated last year to be 360,000 people without such access. Others looking at the problem see it as much worse. Newsom said 1 million residents face health risks from their own water supplies.

Newsom emphasized what a priority the water tax would be for him on Friday by taking his cabinet on a “surprise” tour of affected Central Valley communities.

The dairy industry would also face $30 million in new fees. The $140 million annually that Newsom hopes to get from his plan is dwarfed by money already available from a $7.5 billion 2014 state water bond. While the largest chunk of the bond – $2.7 billion – was reserved for water storage projects, one of its listed priorities for the remaining $4.8 billion was providing access to clean water.

Howard Jarvis Taxpayers Association President Jon Coupal saw Newsom’s water tax plan as part of a historical continuum. He told the Sacramento Bee it was only the latest example “of California’s knee-jerk reaction to default to a new tax whenever there’s a new problem.”

But Newsom depicted his 2019-20 budget as reflecting discipline, touting its emphasis on continuing to add to the state’s rainy day fund and his commitment to prepay some of CalPERS’ and CalSTRS’ unfunded long-term liabilities. Finance officials say every $1 billion prepaid now saves more than $2 billion in the long haul.

Governor cites urgent need to upgrade 911 system

Newsom also confirmed that he wants to add a 20- to 80-cent fee on monthly cellphone and landline bills to upgrade the 911 emergency notification system. That would take a two-thirds vote of the Legislature.

A similar proposal died late in the legislative session amid fears that it was a regressive tax that could cause headaches for incumbents on the November ballot.

But Newsom depicts the fee as a vital part of upgrading a 911 system that has outdated technology and is not up to the challenge of keeping safe a state facing devastating wildfires on a yearly basis.

The 911 fee was part of a larger wildfire-response program Newsom announced last week in the aftermath of last fall’s Camp fire in Butte County that killed at least 86 people and destroyed about 14,000 homes and the Woolsey Fire in Ventura and Los Angeles Counties that caused three deaths and torched 1,500 homes.

The governor wants to add $105 million to the $200 million already earmarked for improved wildfire response efforts in fiscal 2019-20. The extra money would be used to boost forest clearing efforts, to expand emergency fire rescue crews and more.

8 comments

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  1. Fletch'
    Fletch' 14 January, 2019, 11:45

    Of course he does, no source of payment or income is excluded or sacrosanct.

    Reply this comment
  2. Richard Rider
    Richard Rider 14 January, 2019, 12:32

    I love it! It’s time we start sticking it to the average Joe (and Joan) — those folks who elected Newsom and his crowd into office.

    CA can’t continue to soak the rich for our socialist state’s endless “needs.” Unlike a country, rich people (and their companies) are MUCH more likely to depart a state if given enough “incentive” — which we are already providing.

    I’ve always respected the European countries for spreading the burden for their welfare state via higher income taxes on the lower income population — and a 20+% “sales tax” (a.k.a. VAT tax) on all purchases. Their voters support it. GREAT!

    Let’s see how well these new broad regressive taxes play in California. Should be fun!

    Reply this comment
    • Sean
      Sean 14 January, 2019, 13:29

      California already has a lot of regressive taxes. State and local sales tax averages more than 8.5% statewide putting it in the top 10 nationwide. Fuels taxes and fees increase the cost per gallon of gas nearly 50% over other states. The highest portion of Medicaid recipients nationwide (31% of population) increases healthcare costs for those with employer provided coverage. A single person only needs an income of $52,600 to hit a marginal tax rate of 9.3%. Proposition 13 also increases property taxes on young, less affluent buyers. There is a reason young adults leave the state when they want to have children.

      Reply this comment
      • RBC
        RBC 14 January, 2019, 16:23

        I hear you, Sean. I have a family with 3 kids and finally made the decision to put a plan in place to exit California in the next 3-5 years.Sadly, this is a common theme for just about everyone I speak with here in California.

        Reply this comment
        • Chuck4084
          Chuck4084 15 January, 2019, 10:31

          Good for you. I left 4 years ago and haven’t missed California a bit. I discovered there is a lot of “hidden” expenses. For example I had a $1M personal liability insurance policy that cost nearly $500 per year, now I have a $2M policy that costs $150 per year. Car insurance was cut nearly in half. Once you make the move you will wonder why you waited so long.

          Reply this comment
    • Joe
      Joe 14 January, 2019, 19:52

      It’s only the beginning.

      The DemoRats have a super majority in the legislature, they hold every state wide office, Gabby Newscum is governor. They have an absolute stranglehold on power.

      There will be an orgy of tax increases, guaranteed!

      Reply this comment
  3. Ulysses Uhaul
    Ulysses Uhaul 14 January, 2019, 16:38

    Uli feels your pain!!!!!

    Little use tax here and a little use tax there…….

    They are going for morning donut or burrito-

    Reply this comment
  4. machiavelli
    machiavelli 15 January, 2019, 15:15

    We congratulate the Governor…with a healthy budget, no, a budget that is “extraordinary,” the state has successfully extracted billions of our tax dollars for state programs resulting in a $21B surplus.

    This is the kind of proud announcement that immediately demands a fresh question, “Do you drink water, take a bath/shower, wash your car or water your lawn? If so, it’s time for you to pay more taxes based on your water usage. We could use the money for…whatever.”

    Reply this comment

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Chris Reed

Chris Reed

Chris Reed is a regular contributor to Cal Watchdog. Reed is an editorial writer for U-T San Diego. Before joining the U-T in July 2005, he was the opinion-page columns editor and wrote the featured weekly Unspin column for The Orange County Register. Reed was on the national board of the Association of Opinion Page Editors from 2003-2005. From 2000 to 2005, Reed made more than 100 appearances as a featured news analyst on Los Angeles-area National Public Radio affiliate KPCC-FM. From 1990 to 1998, Reed was an editor, metro columnist and film critic at the Inland Valley Daily Bulletin in Ontario. Reed has a political science degree from the University of Hawaii (Hilo campus), where he edited the student newspaper, the Vulcan News, his senior year. He is on Twitter: @chrisreed99.

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