The latest comes in a special investigation report published last week by the State Personnel Board, an agency charged with enforcing California’s civil-service-related statutes. The report, prompted by anonymous complaints about the BOE’s hiring practices, found that the agency “has a large number of employees who have personal relationships with other BOE employees and work in the same department or division.”

The findings could lead to the dismissal of three state employees. It also poses deep challenges for the agency and its successors. Approximately 90 percent of the BOE’s 4,767 employees will continue doing their existing jobs under the auspices of a new Department of Tax and Fee Administration, which handles tax collections, and a new Office of Administrative Hearings, which will adjudicate tax disputes between businesses and the state.

The State Personnel Board’s survey found that 835 of these employees – comprising 17.5 percent of the former BOE’s work force – have “personal relationships” with other staff members. The board defined such relationships as “associations with individuals by blood, adoption, marriage, registered domestic partnerships or cohabitation.” The survey, the personnel board cautioned, did not capture the entire workforce, so that percentage could be higher or lower.

The numbers don’t tell the entire story, however. The report detailed several specific examples that were investigated as part of the audit, and which provide details about how such questionable hiring takes place.

In one investigated case, auditors looked at allegations that a tax consultant expert in BOE member George Runner’s office “used his position of influence to encourage the hiring of his son.” The son later voluntarily resigned the position. The report argued that “employees acted in bad faith by not intending to observe the spirit and intent of civil service laws” because the hire apparently “was the result of preselection.”

In another investigated case, the personnel audit found that the daughter of an assemblyman was allowed to submit an application for a public-information officer position even though her application was submitted after the deadline had passed. It stated that Board of Equalization Member Jerome Horton and his chief of staff had pushed for the daughter’s hiring even though “she received the lowest rating for the interview by both interview panel members.”

The Sacramento Bee identified the assemblyman as Jim Cooper, D-Elk Grove. The audit argued that the appointment was not made in good faith and called for “corrective action.” Horton told the newspaper that he was simply trying to assure that the assemblyman’s daughter was treated fairly – and didn’t learn of the hire until after the fact.

In a third case, the audit argued that the “voluntary demotion of an employee” from an information-officer position in the Sacramento office to an office technician in the New York office was improper. The report states that “the evidence overwhelmingly supports a finding” that the person’s transfer “violated civil service merit principles and the law.” That case involved BOE Member Diane Harkey and her office. The report called for the employee’s dismissal.

In yet another instance, the report found that a job applicant, whose spouse also worked for BOE, was hired for a position even though he had “not waited the requisite six months between exams.” The audit called for his appointment to be voided.

The report pointed to the significance of these specific incidents. Officials “observed that the culture of BOE was one in which board members and their staff and executives were perceived as having significant influence and power over civil service personal matters” and that “favoritism or perceived favoritism toward employees having personal relationships with other employees had a dispiriting and stressful impact on overall employee morale.”

The State Personnel Board report also found that the BOE engaged in a hiring rush right before the governor’s pension-reform law went into effect, as the Bee explained. The “findings identified deficiencies in 23 of the 27 recruitment packages reviewed” and deemed those 23 appointments to be “unlawful” for a variety of reasons, according to the report.

The new California Department of Tax and Fee Administration prohibits nepotism, which it describes as “favoritism by those with power or influence to appoint, employ, promote, advance or advocate for relatives or persons with whom they have personal relationship.” It states that this situation “is antithetical to merit-based personnel system.”

The rules are clear. And the report offers several specific correctives. The big question now is how the state will handle the broader matter – that such a large number of employees in its tax bureaus have “personal relationships” with other employees.

In his November 13 letter to the State Personnel Board, the tax agency’s director Nick Maduros largely concurred with the report’s findings, but said the agency is working on developing a “more complete and accurate picture of the extent of employee personal relationships moving forward.” He will work with the state human resources agency, CalHR, “to develop a corrective action plan” for relationships that run afoul of the new anti-nepotism policy.

In the meantime, the personnel board’s executive officer, Suzanne Ambrose, told the Bee that she expects more anonymous tips from other state agencies. This could be just the tip of a broad state-governmental scandal that goes much deeper than the dealings of a now-gutted tax agency.

Steven Greenhut is Western region director for the R Street Institute. Write to him at sgreenhut@rstreet.org.

The current MID – which allows taxpayers to deduct interest on up to the first $1 million of mortgage debt – has been a boon to the state’s homeowners. The median price of a California home is home nearly $510,000, according to Zillow. In Los Angeles County and Orange County, it’s even more: $574,400 and $691,600, respectively. However, the median price in the booming Inland Empire remains significantly lower: $347,700 for Riverside County and $314,000 for San Bernardino County.

The state and local tax deduction disproportionately benefits those with higher incomes in states with higher tax burdens. According to the Tax Foundation, with an average gross income (AGI) of $73,938, 33.9 percent of filers in California take advantage of the deduction, which amounts to almost 8 percent of AGI.

Meanwhile, the median value of this deduction is less than 4.5 percent, and, per the Tax Foundation, California, New York, New Jersey, Illinois, Texas and Pennsylvania “claim more than half of the value of all state and local tax deductions nationwide.”

As to be expected, many of California’s political representatives have chimed in. Here are a few of their responses:

Jerry Brown penned a letter to Rep. Darrell Issa, R-Vista: “I implore you to vote NO or to ask for more time so that Californians can have a chance to find out about the real impact of this proposal. Getting rid of an individual’s ability to deduct his or her California taxes is a horrible idea, but it is made far worse when you preserve – at the same time – the right of corporations to take those same deductions. Can you tell me how much your neighbors and fellow citizens will have to pay because of this proposal?”

Darrell Issa defended himself and the GOP plan in a letter of his own: “It seemed only fitting to take this opportunity to highlight your expertise on – as your letter states – ‘horrible ideas’ on tax policy. I recognize the role of the state and local tax deduction to reduce the tax burden on many Californians, but let’s be clear: it has only become of such importance as a direct result of the tremendous weight that your misguided policies have put on California taxpayers.” Issa concluded, “Rather than sending contrived letters pretending to care about the burdens placed on taxpayers in our state, I implore you to turn away from the era of ever-increasing taxes that have continued under your administration and instead seek policies that actually lower the tax burden on all Californians.”

House Majority Leader Kevin McCarthy, R-Bakersfield, defended the plan: “Today, we moved closer to enacting reform that will encourage American companies to bring American jobs back to American towns, allow people to spend minutes, not days, doing their taxes, and help increase wages by $4,000 for the average family because of faster economic growth. We’re moving forward at a fast pace because America has so much to gain when we get this done.”

House Minority Leader Nancy Pelosi, D-San Francisco, in a press release published on Halloween, stated, “The GOP plan to double tax middle class families’ incomes shows the fundamental rottenness at the core of their tax bill. Middle class families get tricked, billionaires get treats. Republicans should abandon their broken middle-class tax hike bill, and work with the Democrats for real bipartisan tax reform that puts the middle class first and delivers A Better Deal to the American people.”

Rep. Ted Lieu, D-Torrance, decried, “The GOP tax plan is absurd. Their proposal to eliminate the state and local tax deduction will lead to a massive tax hike for middle class families in California.” He also “double dare[d]” the state’s moderate Republicans – who “should know better” – to vote for “this ridiculous tax plan.”

Among the bills that were vetoed at that time were two that would have repealed sales taxes on diapers and tampons. Both measures passed unanimously, but the governor wanted to assure that new spending-related measures didn’t lead to deficits. So the authors of those two measures are back again this year – but this time they are addressing the revenue issue.

The Common Cents Tax Reform Act, Assembly Bill 479, would “exempt diapers, tampons, pads and other basic necessities from California’s sales tax,” according to a statement last week from its authors. The February version of the bill would have exempted sales taxes from the sale, storage and use of various physician-prescribed medicines, but was amended to target diapers and feminine products.

To deal with the governor’s concerns, its co-authors (Assembly members Cristina Garcia, D-Bell Gardens, and Lorena Gonzalez Fletcher, D-San Diego) want to raise taxes to offset the tax cut. The bill would increase the excise tax by $1.20 per gallon on hard liquor that is 100 proof and and by $2.40 a gallon for liquors that are more than 100 proof.

They estimate the tax increase will add about 1.5 cents per gallon to the typical hard-liquor serving and say that it’s a modest increase, but the tax rate would be boosted by more than 36 percent – raising it from $3.30 a gallon to $4.50 a gallon. The state’s excise taxes, however, would remain the same on the sales of beer and wine.

“Common sense is that liquor is a choice and a luxury and human biology is not,” said Garcia, who authored the tampon-tax bill last year. “There is no happy hour for menstruation. Our tax code needs to reflect the fact that it’s not OK to tax women for being born women.” Gonzalez Fletcher, who had authored the diaper-tax measure, depicted the matter as one of “babies over booze.” Because the bill requires a tax increase, it will need two-thirds supermajority support in the Legislature.

But opponents of the legislation caution against using the tax code to favor some goods over others. “Taxing drinks to reduce the taxes on other consumer goods is folly – not least because retailers will mark up diapers and feminine care products to their current price,” said Kevin Kosar, a senior fellow of the R Street Institute in Washington, D.C., and author of the 2016 book, “Moonshine: A Global History.”

“Drink taxes should only cover the social costs they produce – not expenses attributable to normal bodily functions like defecation and menstruation,” he added. “What’s next – taxing drinks to pay for toilet paper and fingernail clippers?”

This is likely to become a partisan issue. Some California Republicans supported previous efforts to reduce taxes on diapers and tampons, figuring any tax reduction is a good thing. Likewise, many Republicans generally took issue with the governor’s statement equating tax cuts as spending. If a cut is the same thing as a spending hike, then it implies the government – rather than individuals – is the steward of all income. But they appreciate Brown’s insistence the budget remain balanced, which means any diversion of revenue has to be made up somewhere else.

California Democrats are jumping on a national “gender equity” campaign designed to reduce the prices of feminine products and other necessities. For instance, the Washington Post reported that New York’s Democratic Gov. Andrew Cuomo last year signed a law exempting sales tax from tampons and Washington, D.C.’s Democratic mayor signed a law that also removes the tax from diapers. Cuomo blasted the tax as regressive – meaning it hurts the poor the most – and called it a “matter of social and economic justice.”

Assembly Bill 479 isn’t the only recent effort to rearrange the tax code to favor in a targeted manner. “The Teacher Recruitment and Retention Act of 2017,” introduced by Democratic state Sens. Henry Stern, D-Agoura Hills, and Cathleen Galgiani, D-Stockton, would exempt public-school teachers from paying state income tax on their teacher salaries if they stay in the field for at least five years. The goal is to address a shortage of classroom teachers.

The diaper/tampon exemption would be revenue-neutral because of the corresponding booze-tax increase, but the teacher exemption is estimated to cost more than $617 million a year. Although the state’s highly progressive tax code already is filled with special privileges for some and higher tax rates for others, critics worry that this new spate of tax exemptions could spark a frenzy of similar bills, and the slow expansion of state tax exemptions from one favored group to another.

When Gov. Brown vetoed seven tax bills last year, he noted that their cumulative effect would be to reduce revenues by around $300 million. He cautioned about cutting such revenues “when the state’s budget remains precariously balanced.”

Although there’s disagreement on the likelihood of new deficits, there’s little question that California’s budget remains as precarious as ever. That gives the teacher exemption a huge obstacle – but it’s unclear what the governor might do if AB479 passes now that supporters of the tampon and diaper exemptions identified a tax hike to make up for lost revenue.

Steven Greenhut is Western region director for the R Street Institute. Write to him at sgreenhut@rstreet.org.

A bill introduced by Assemblywoman Cristina Garcia, D-Bell Gardens, would roll back the sales and usage tax exemptions for certain, less-nutritious, snack foods.

The measure, part of Garcia’s agenda to highlight inequities in the tax code, requires a heavy lift to become law. In 1992, voters repealed a tax on snacks, leaving most candy and junk food exempt from sales tax. The measure requires two-thirds majority and a vote of the people.

Garcia’s office estimates the measure would bring in around $1 billion in tax revenue annually. 

While the additional revenue could fund any number of priorities, Garcia has long sought to make a point that snacks with little nutritional value are not taxed, while necessities — feminine hygiene products like tampons — are.

“As I took a closer look at our tax code, it became apparent that while California’s policy is to tax luxury items, the reality is that it’s inconsistent,” Garcia said in a statement. “We tax necessities like tampons but exempt chocolate bars.”

Anti-tax groups are already lining up against the measure, arguing that it was an “administrative nightmare” to tax some items and not others.

“California voters repealed the snack tax 25 years ago by a resounding two to one margin,” said David Wolfe, legislative director for the Howard Jarvis Taxpayers Association. “They stated very clearly then that they didn’t want a regressive and punitive billion dollar tax that predominantly targeted low-income individuals. Nothing has changed.” 

“Four years ago, voters approved Proposition 30, which raised the income tax significantly on the wealthiest Californians and raised the sales tax a tiny bit on everyone,” Capital Public Radio recently recalled. “That quarter-of-a-cent increase equated to paying an additional $0.01 on a $4 coffee; $1 on a $400 television; and $100 on a $40,000 car.” But on Election Day 2016, that changed. “Voters extended Proposition 30’s income tax increases in [November’s] presidential election with Proposition 55 — but that initiative allowed the Prop. 30 sales tax hike to expire.”

The shift means California’s sales tax is the state’s only tax to be decreased this year, from 7.5 percent to 7.25 percent. As the U-T reported, “Some local jurisdictions tack on their own assessments, so residents in certain areas will still pay more than the statewide rate.” In certain parts of the state, like the San Francisco Bay Area, voters allowed substantial increases. 

From spending to taxing

Prop. 30 ushered in the so-called Schools and Local Public Safety Protection Act of 2012, as California voters threw their support behind increased spending on state education and benefits. “The act increased sales tax and income tax rates to help maintain funding levels for public schools and colleges and pay for programs for seniors and low-income families,” U-T San Diego noted. “The additional revenue also provided local governments with a constitutional guarantee of funding to comply with a new state law that shifted lower-level offenders from state prisons to county jails.”

Some municipalities, particularly in parts of the state that joined a Democrat-led initiative to hike minimum wages, opted to raise more funds. “Bay Area voters this year generously approved taxing themselves in large numbers — and they’ll feel the pinch at the cash register in 2017 as local sales taxes across Silicon Valley take effect even as a state tax expires,” according to the San Jose Mercury News. 

“As California cities struggle to fund basic city services like police, fire protection, libraries and parks, they’re increasingly turning to voters for help. And voters this year said ‘yes’ to tax hikes in at least eight Bay Area cities in exchange for fewer potholes, less traffic and more cops, including San Jose, Newark, Martinez and Pleasant Hill.”

Pension pinch

For years, public pension costs have steadily built pressure on Golden State cities. In some areas, the problem has become egregious: The city of El Monte, in Southern California, shelled out 28 percent of its general fund to pay retirement costs. “Among California’s 10 largest cities, only San Jose paid as much toward retirement costs relative to its general fund. Los Angeles spends 20 percent of its general fund on retirement costs,” the Los Angeles Times revealed. “El Monte’s outsize pension bill weighs heavily on the San Gabriel Valley city of 116,000, where half the residents were born outside the United States and a quarter live below the poverty line.” 

Meanwhile, CalPERS, the nation’s largest public pension fund, has struggled with its own imbalanced budgets. “CalPERS has 65 cents for every dollar that it needs to provide pension benefits for almost two million people,” Fox Business recently recalled. “CalPERS pension debt is roughly $164 billion and mostly likely will grow larger in coming years.” 

In an effort to come to grips with the problem, the fund reduced its forecasted return on investment from 7.5 to 7 percent. “It has been paying out $5 billion more a year in benefits than it’s receiving in contributions and investment returns, not a sustainable trend,” the Fresno Bee noted in an editorial. “With investment returns averaging 4.6 percent during the past decade, some experts urged CalPERS to reduce its forecast even more.” But that would risk pushing more California cities toward bankruptcy — or toward even higher local taxes. 

Tempting fate — and mobilized outrage from consumers and their Silicon Valley allies — municipalities around California have zeroed in on a new source of revenue: Online film and television streaming services, and the people who use them.

“If the cities are successful in adjusting their existing utility users taxes — and there are questions surrounding the legality of such a move — viewers could be forced to pay as much as 10 percent more to stream Netflix’s ‘Orange is the New Black’ or Amazon Prime’s ‘The Man In the High Castle,'” the San Jose Mercury News reported. 

“Cities from Richmond to Redwood City to Watsonville are looking at adopting a streaming video tax. Alameda, Albany, Emeryville, Gilroy, Hayward, Hercules, Menlo Park, Los Altos, Newark and San Leandro have ordinances that could be tweaked to allow them to tax video streaming without a fresh round of voter approvals.”

The temptation has quickly spread from the city of Pasadena, where local officials have already succeeded in slapping the levy on residents. “Pasadena was among the first to say publicly this fall that it wanted to tax video streaming services like Netflix, a step that could make up for lost tax revenue from growing numbers of cord-cutters,” the New York Times recalled. “The move in Pasadena, with a population of about 140,000, has drawn consternation from technology companies and consumers who worry that it could be copied across the state.”

In fact, some tax defenders have construed its legality around a rule passed years ago under different auspices. “Pasadena voters modernized a law in 2008 to tax cell phones like landlines, never anticipating it could be applied to video streaming,” according to CBS. “Forty California cities now have similar laws.”

National nerves

And though the federal government doesn’t permit internet taxation, big cities outside California have muscled in onto the potentially lucrative source of cash too. Results, however, have been mixed. “Pennsylvania’s charging a 6 percent sales tax on everything, from apps to downloads, to help close a $1.3 billion budget gap,” the network added. Chicago, meanwhile, “is currently being sued for charging a 9 percent tax on video streaming.”

Critics have warned bites like that add up. The taxes “may show no signs of stopping, considering streaming music, podcasts, video games and other technology is constantly being developed,” The Drum observed. “Paul Verna, an eMarketer analyst, said that a larger debate could erupt when people start seeing their bills if those smaller channels are continuously added.”

For its part, Netflix threw up a red flag. Spokesperson Anne Marie Squeo told the Los Angeles Times it was “a dangerous precedent to start taxing Internet apps and websites using laws intended for utilities like water and electricity. It is especially concerning when these taxes are applied to consumers without consent and in a manner that likely violates federal and state law.”

Shifting business

And now, in the midst of the controversy, Netflix has moved aggressively to court customers with a significant new feature adopted by its rivals: offline streaming. “Netflix signaled in recent months it would add an offline viewing option to better compete as the streaming video market becomes more and more crowded,” Reuters reported. “Amazon.com Inc’s rival streaming video service, Prime Video, has had this option for about a year.”

The company’s domestic customer base has stalled, but foreign audiences have swelled, a trend that could be exacerbated if American cities flock toward taxation. “Growth among U.S. subscribers has slowed in 2016,” the wire continued. “Netflix added just 370,000 subscribers during the third quarter and only 4.3 million since the third quarter of last year, suggesting they are reaching a saturation point.”

“In that same time frame, Netflix has added 13.2 million international subscribers, including 3.2 million in the third quarter. Much of that has to do with Netflix’s expansion by more than 130 countries earlier this year to over 190 nations currently.”

Proponents have argued it’s a matter of gender fairness, as these products — including tampons, sanitary napkins and menstrual cups and sponges — are a basic necessity for women.

The bill’s sponsors, Assemblywomen Cristina Garcia, D-Bell Gardens, and Ling Ling Chang, R-Brea, have also argued hypocrisy in the past, as certain non-essentials products, like candy, are already exempt from sales tax. 

“Fundamentally this is about gender equity and leveling the field,” Garcia said in a statement. “Every month, for 40 years of our lives, we are taxed for being born women. … Every month we are told our periods are a luxury, while also being told they are something to be ashamed of and we must hide.”

The Board of Equalization, which voted to support the measure earlier this year, projects the tax revenue lost if the bill were to pass to be around $20 million annually, hardly noticeable in the state’s $171 billion budget — or in women’s pockets as the savings come to less than $0.01 per woman per day.

Several other states have adopted similar measures, as have Canada and the United Kingdom. 

Photo credit: 401kcalculator.org

Proponents of a 12-year extension of a temporary tax used to bolster education funding may ask voters to consider the measure prior to a full vetting, with critics demanding accountability.

By law, the state Controller’s office is supposed to audit Proposition 30’s Education Protection fund, which doles out the funds according to a strict formula. Although the law gave no time requirement, the audit has not yet happened and isn’t projected to be complete until around a month before the November election, which one critic says shows a lack of transparency.

“Voters were told that Prop. 30 funds would be audited, and there is a presumption among the voters that that audit would be conducted in a timely manner,” said Jon Coupal, president of the Howard Jarvis Taxpayers Association. “And to be told that the audit … isn’t going to be completed until the month before the election is not exactly full transparency.”

History

Prop. 30, which passed in 2012, implemented a tax on incomes exceeding $250,000 and a quarter-cent sales tax, which were both used to stave off severe budget cuts to education and the general fund.

To quell concerns that the tax revenue would actually go to funding education and not some unrelated expense, the measure called for two levels of oversight: annual audits of spending by local agencies, like school districts, charter schools and community college districts, and a periodic audit of the state’s Education Protection Account.

The local audits are being completed, but no audit of the EPA has been performed to date, which the law says the Controller “shall” perform. To clarify, the local audits verify how schools are spending the money, while the EPA audit would verify how the state is spending the money.

When will the audit happen and is it necessary?

The controller’s office told CalWatchdog the audit would likely be completed by October. Assuming the initiative qualifies for the ballot, which it hasn’t yet, that is only a month before voters go to the polls.

Also, only the income tax provision, which expires in 2018, is part of the extension; the sales tax provision expires at the end of 2016 either way.

Proponents — primarily teacher unions and health care advocates — are asking for the extension two years early, making the timing of the audit more immediate. But they argue the audit is not necessary because two other Controller-prepared reports, both which look at the state’s finances in a general way, satisfy the requirement.

“We know how the money has been spent and the new measure has the same accountability requirements,” said Jennifer Wonnacott, spokeswoman for the measure’s committee, Californians for Protecting Public Education and Budget Stability, Sponsored by Teachers, Health Care Providers and Labor Organizations. “The law as written under Prop. 30 has been fulfilled by these two reports, so if the Controller goes above and beyond that that’s for their office to decide.”

The Controller’s office still believes an audit is required to ensure the state is adhering to the required 89/11 percent split between K-12 and community colleges, and is satisfying other funding requirements.

“While it’s reasonable to conclude that (the other reports) meets the Proposition 30 audit requirement, the State Controller’s Office still has a duty to monitor compliance and conduct whatever field audit we believe is necessary,” said John Hill, spokesman for the Controller’s office. “That’s why we plan to audit the EPA within the next six months.”

Is there even a problem?

Despite the dispute over whether another audit is required, everyone agrees that oversight of the program was warranted. After all, the extension has also included the auditing requirements. However, no one has suggested the money is being used improperly. In fact, an independent analyst suggests there’s little cause for concern.

“These rules are relatively straightforward and we don’t have any technical concerns at this point about the way the state is distributing the funds,” said Kenneth Kapphahn, an analyst with the independent Legislative Analyst’s Office.

Timing

The measure has not yet qualified for the November ballot, but it’s well-funded, making its chances good. Assuming it does qualify, voters may be forced to make a hasty decision. Coupal called on the Controller’s office to speed up the timeline, pointing to the fact that the measure passed four years ago, which gave ample time to perform the audit.

“We would urge the controller to expeditiously move on an audit and complete the audit at least three months prior to the election,” Coupal said.

Photo credit: 401kcalculator.org

The state’s Taxpayers’ Rights Advocate unanimously voted to support a bipartisan bill cutting sales tax on menstrual hygiene products — like tampons and sanitary napkins — giving the effort a big boost.

The bill’s primary author, Assemblywoman Christina Garcia, has railed against taxing menstrual hygiene products as discriminatory, especially to low-income women. The Bell Gardens Democrat says removing the “tampon tax” would benefit underprivileged women who may not be able to consistently afford the products.

Detractors argue against carving out special exemptions, proposing instead to redirect the tax revenue to fund assistance programs to help those in need. But a Garcia spokeswoman on Tuesday told CalWatchdog a similar attempt to redirect “tampon tax” revenue to women’s charities backfired against a British conservative lawmaker and said this was just the first step in making these products more affordable.

“Our tax code needs to reflect the fact that we don’t live in a time where we should be taxing women for being born women,” said spokeswoman Elena Lee. “Changing where the money goes from the tax does not change the fact that the tax on tampons and pads is outdated.”

Conservatives Like Tax Cuts

The Board of Equalization, which supports the measure 4-0, projects the lost revenue if the bill passes to be around $20 million annually (less than $0.01 per woman per day). According to the bill’s coauthor, Asm. Ling Ling Chang, any tax cut is a victory for fiscal conservatives.

The Brea Republican, who is currently running for a state Senate, agrees with the bill on principle too, citing a loophole allowing a sales-tax exemption on candy as an example of an unfair tax code.

“Candy, frankly, is a choice,” Chang told CalWatchdog. “This is not a choice. This is a public health issue.”

Is There Really a Tax on Tampons?

Catherine Rampell, a Washington Post columnist, on Monday wrote the term “tampon tax” is “misleading,” as there’s not specific tax on menstrual hygiene products. Rampell argued against the carve out, adding she’s “skeptical of the idea that government is obligated to address every difference in every demographic group’s consumption bundle.”

“Maybe it seems unfair that in so many states Twizzlers don’t get taxed while tampons do,” Rampell wrote. “But the solution isn’t to dole out yet more tax breaks but to end the ones we have and direct more public funds to people who actually need assistance.”

The bill has a bipartisan group of 20 coauthors, including Speaker-elect Anthony Rendon, D-Paramount. That, plus Tuesday’s vote and favorable politics give the bill great momentum.

“Opposing the taxation of these items is a way to be both pro-feminist and anti-tax,” said John J. Pitney, Jr., a Roy P. Crocker professor of politics at Claremont McKenna College. “And since the amount of forgone revenue is extremely small, the issue is a political winner, period.”

A measure backed by the California Teachers Association would extend Prop. 30’s higher tax rates on the wealthiest Californians until 2030, with an estimated $7.5 billion each year going to public schools and community colleges.

 

Another measure, this one by the California Hospital Association and the Service Employees International Union-United Healthcare Workers West, makes those higher tax rates permanent and sends half the annual estimated $10 billion to public schools, colleges and universities, 40 percent to Medi-Cal for low-income health care and 10 percent for early childhood development programs. It also imposes a new, higher tax rate on those who make more than $1 million annually. …

 

[Negotiators] for the teachers group and the hospital association have been talking about a third option, which would extend Prop. 30’s higher tax rates and split the money between schools and health programs. That measure is awaiting approval from the state Attorney General’s Office, and a decision about whether to aim that initiative for the ballot won’t be made until later this month. …

 

“We’d prefer one measure, especially on a crowded ballot,” said Gale Kaufman, a political consultant working on the teachers’ measure. “My instincts say less is better always, but it’s difficult to have any hard and fast rules.”

The focus isn’t just on income tax ballot measures, though they have gotten the most early attention. The Chronicle notes that the Making Poverty History initiative “would add a surcharge to the tax bill for land and buildings with an assessed value of $3 million or more. The $6 billion raised annually would go toward programs to reduce poverty in the state, including prenatal services, expanded child care, tax credits and job training grants.”

Steyer follows Schwarzenegger strategy

Tom Steyer, the billionaire environmentalist who is exploring a 2018 run for governor, also is looking to make a political name for himself with a ballot measure, as Arnold Schwarzenegger did in 2002 with Proposition 49, a successful ballot measure funding after-school programs, a year before the recall election that ousted Gov. Gray Davis.

Steyer is behind the Save Lives California campaign, which would use a $2-a-pack tax on cigarettes to shore up state Medi-Cal funding and to pay for health-promotion and anti-smoking programs.

A previous ballot measure that successfully raised cigarette taxes was also sponsored by a non-politician believed to be interested in running for governor. Championed by Hollywood producer-director-actor Rob Reiner, Proposition 10 added a 50-cent levy on a pack of cigarettes, with proceeds used mostly to fund early childhood education programs.

But Reiner, unlike Schwarzenegger, never ran for state office.