That potential 3 percent sales tax levied by cities and counties is in addition to the statewide 7.5 percent sales tax, which could result in a combined 10.5 percent tax in some areas of the state. Tax hikes require majority voter approval for general purpose levies and two-thirds approval for special purposes.

The average state and local combined sales tax in California is 8.5 percent, according to a recent report by the Legislative Analyst’s Office. The lowest rate of 7.5 percent predominates in rural counties, while the highest rates are in urban areas. Residents in eight cities in the Bay Area and Los Angeles County are currently paying a 10 percent sales tax because their counties have received exemptions from the 2 percent cap.

“AB464 is about local control and flexibility,” said the bill’s author Assemblyman Kevin Mullin, D-San Mateo, on the Assembly floor May 14. “It gives local voters the ability to raise revenue to fund important public services, including transportation, public safety and libraries. This bill is crucial, because if just one city in a county reaches the [2 percent] cap, then the entire county is precluded from having voters raise any additional taxes, hindering key transportation projects or attempts to enhance public safety.

“As a result, a flurry of legislation has been signed into law creating individual cap exceptions across the state. AB464 reduces the need for this one-off legislation by lifting the cap statewide. Please join me in granting voters the ability to raise sufficient revenue to fund public services locally in California.”

There was no debate on the bill, which passed along party lines 45-31. It’s supported by California’s counties and their transportation commissions along with government employee unions.

The California Taxpayers Association issued an opposition “floor alert” on the bill that was signed by numerous business and local taxpayer organizations. It states that “California already has the highest sales and use tax rate in the country,” and provides three arguments against raising the cap:

• Increases the cost of doing business. Businesses face a significant sales and use tax burden in California, and business purchases account for roughly 40 percent of all sales and use tax collected by state and local governments. California is one of the few states that requires businesses to pay sales and use tax on manufacturing and R&D equipment bought and used in the state, making California a very expensive state to operate in, particularly when the sales tax rate is 10 percent in some California cities.
• The sales and use tax is a regressive tax that impacts California’s most vulnerable residents, making it more difficult for them to budget and purchase everyday necessities. California’s economy is improving, resulting in improved revenue collections this year. Now is the wrong time to ask taxpayers, especially those that can least afford it, to spend more of their income to pay taxes.
• Raises the sales tax rate to 11 percent in some areas. [T]he Los Angeles Metropolitan Transit Authority imposes a 0.5 percent tax in excess of current limitations for all of Los Angeles County. This bill would authorize this district to increase its rate to 11 percent. This level of taxation is excessive, and exacerbates the problems described above.

The immediate beneficiaries of AB464 are Alameda, Contra Costa, Los Angeles and San Mateo counties, which have all reached the 2 percent limit, as well as Marin, San Diego and Sonoma counties, which are near the 2 percent limit, according to the Assembly’s legislative analysis.

California’s sales tax brought in $48 billion in 2013–14. About half of it goes to the state government’s general fund, making it the second largest general fund source after the income tax, which accounts for two-thirds. One percent of the sales tax goes to cities’ and counties’ general funds; the rest is aimed at specific programs such as public safety and transportation.

The statewide sales tax rate began at 2.5 percent in 1933. Although the tax rate has tripled since then and its revenue has increased at a 7.3 percent annual rate, the sales tax has actually decreased as a share of total state revenue. “In the 1950s, the sales tax accounted for the majority of General Fund revenue, while the personal income tax contributed less than one-fifth,” the LAO report said. “Since then, personal income tax revenue has grown rapidly due to growth in real incomes, the state’s progressive rate structure and increased capital gains.”

In 1969, cities and counties were granted the authorization to pass their own sales tax increases, mostly benefiting transportation improvements.

Although not nearly as volatile a revenue source as the income tax, revenue from the sales tax can vary significantly depending on the state of the economy. In 1974-75 sales tax revenue increased 22 percent, but in 2008-09 it declined 10 percent. Overall, however, adjusting for increased rate changes, inflation and population, sales tax revenue has remained roughly constant per capita since 1970–71, according to the LAO.

AB464 will next be considered by the Senate Rules Committee.

Set to expire in 2018, it was sold to voters as a temporary tax.

“’We need to renew Prop. 30,’ Torlakson, the state Superintendent of Public Instruction, said Wednesday night at a coffee meeting with local PTA leaders in a Sacramento home,” the Sacramento Bee reported online.

Two days later, the Bee did a newspaper story  (and put it online) about that same meeting with Torlakson in a private home. But those pieces said the meeting was to talk to parents and teachers about the new Common Core state education standards. There was no mention of Torlakson’s call to extend Prop. 30 in the newspaper version of the story, yet both stories were written by Bee reporter Diana Lambert.

Perhaps Torlakson had an early copy of the Legislative Analyst’s Office 2014-15 fiscal review.

“As Proposition 30 Personal Income Tax increases phase out, much slower revenue growth forecasted,” the LAO headline said.

“Under Proposition 30, the increase in Personal Income Tax rates for high–income taxpayers generates a much greater proportion of revenue than the sales tax increase,” the LAO report found.

Under a hypothetical recession, the LAO explained, “the revenue losses would be offset somewhat by lower Proposition 98 minimum requirements, and we assume that the state would reduce spending to the lower allowed spending levels.”

The LAO warned against overcommitting, which could bring back budget shortfalls.

General fund spending

The California Personal Income Tax is two–thirds of the annual general fund revenues.

“We note, however, that the proportion of the general fund supported by PIT revenues likely would be growing even if Proposition 30 were not in effect due to more income concentration among the highest–income taxpayers and the other factors described earlier,” the LAO said.

Remember when Gov. Jerry Brown was campaigning to pass Prop. 30? “The taxes that I’m proposing on sales and higher income people goes to the schools — 100 percent of it,” the Los Angeles Times reported Brown saying. “But it goes in a way that integrates it with the budget itself.”

(Note: The L.A. Times stories with this quote are no longer available; the story linked is in the Press Democrat, but is a column by L.A. Times columnist George Skelton.)

However, what Brown wasn’t saying is that when state revenue increases, so does school funding, automatically. Proposition 98, passed in 1988 by the voters, guarantees K-12 public schools and community colleges about 40 percent of the general fund. So when general fund revenues go up, so does school spending. Conversely, when general fund revenues are reduced, school spending is also reduced.

“The first 18 months of the tax hike would raise $9 billion, according to the state Finance Department. Schools would be entitled to $3.8 billion, or 42 percent. The remaining $5.2 billion, or 58 percent, would be earmarked for budget balancing,” Skelton wrote.

So schools would not be receiving the bulk of the tax increase revenues. Is it any wonder Torlakson want to prolong the tax hike — other than a promise made to voters?

Last month, Democratic Gov. Jerry Brown signed into law a $2.3 billion tax extension. The measure, authored by a Central Valley Democrat, passed both houses of the legislature with overwhelmingly Democratic support.

Yet, the multi-billion dollar tax extension, a Democratic creation, couldn’t have passed the legislature without the help of Republican lawmakers.

Nine Republican legislators, a majority of whom have signed the no-tax pledge, delivered critical votes to ensure that the $2.3 billion tax extension reached Brown’s desk.

Assembly Bill 8 by Assemblyman Henry Perea, D-Fresno, extended the sunset date on various vehicle taxes and fees. The additional revenue will go toward programs for the construction of hydrogen fueling stations and the Carl Moyer Memorial Air Quality Standards Attainment Program, which provides taxpayer-funded grants for businesses to buy new eco-friendly engines and equipment. It also postpones new regulations by the Air Resources Board, a move which is praised by businesses and criticized by environmental groups.

According to the bill analysis, it extends until January 1, 2024:

• $8 increase of the smog abatement fee;
• $0.75 fee increase on tire sales;
• $3 increase of the annual vehicle registration fee;
• $2 surcharge for local air districts on vehicle registrations;
• $5 increase of the fee for special identification plates for construction equipment, farm trailers, cotton trailers, logging vehicles and cemetery equipment;
• $10 and $20 increase for vessel registration.

“This is horrible news for taxpayers because California motorists will now be paying $2.3 billion in additional taxes and charges,” writes Jon Coupal, president of the Howard Jarvis Taxpayers Association. “Adding insult to injury, taxpayers will find their hard earned dollars being used to subsidize programs such as the purchase of all electric cars, like the Tesla that, even with the taxpayer provided discount, can be afforded only by a handful of wealthy individuals.”

GOP votes for AB8

In the State Assembly, Republican Assembly members Katcho Achadjian of San Luis Obispo, Frank Bigelow of Madera and Kristin Olsen of Riverbank voted for AB8, giving Speaker John Perez the 54 votes needed to pass the bill off the Assembly floor. If any of the GOP Assembly members abstained in that floor vote, the bill would have failed. Both Olsen and Achadjian voted for an earlier version of the bill in June.

The vote wasn’t nearly as close in the state Senate. But that didn’t stop Senate Republicans from delivering more votes for the controversial tax extension. Senate GOP Leader Bob Huff was joined by his Republican colleagues Anthony Cannella of Ceres, Bill Emmerson of Redlands, Jean Fuller of Bakersfield and Andy Vidak of Hanford in voting in favor of the multi-billion tax extension in the September 11 floor vote.

Earlier in the year, State Senator Mimi Walters, R-Irvine, voted for a companion measure with nearly identical language, SB11, but changed her vote once AB8 reached the floor in September.

Legislators repeatedly warned of tax hike

Republican legislators who backed the tax extension can’t claim ignorance. Both taxpayer groups and the Legislature’s committee staff pegged the bill as a major tax extension. In January, the Howard Jarvis Taxpayers Association warned that the total bill to taxpayers was $2.3 billion.

An April bill analysis by the Assembly Transportation Committee identified the measure as a tax increase under Proposition 26 that was subject to a two-thirds vote. “Because this bill extends the additional fees on vehicle and boat registrations and a portion of the tire fee, and because these fees are deemed taxes under Proposition 26, this bill requires a two-thirds vote,” the policy committee analysis states.

Similarly, the Senate Republicans' legislative staff cautioned lawmakers about the vote. 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:

“SB11 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.”

Taxpayer groups following the vote

The tax votes could haunt Republican lawmakers, especially those that have signed the “Taxpayer Protection Pledge.” In April, when CalWatchdog.com first reported on Republican votes for the tax extension, Patrick Gleason, the director of state affairs at Americans for Tax Reform, reprimanded one GOP lawmaker on Twitter:

“Looking forward to letting all of @KatchoAchadjian's constituents know that he broke his commitment to them,” tweeted Gleason, whose organization oversees the “Taxpayer Protection Pledge.”

Coupal adds that, in addition to individual legislators, the vote hurts the GOP brand.

“If Republicans can’t agree with the grassroots movement on tax hikes, what do they stand for at all?” Coupal told CalWatchdog.com earlier this year. “With several Republicans supporting AB8, a multi-billion-dollar tax increase, the Republican brand may have been tarnished.”

Much of our climate change skepticism stems from the government’s involvement and manipulation of the scientific data, and the subsequent creation of a cap and trade system, designed to punish and tax business. Cap and Trade is not about saving the planet; it is about revenues, and killing the California economy and jobs.

Not long ago, it became abundantly clear that no one in the state has a handle on the implementation of AB 32, California’s Global Warming Solution Act of 2006, or the potential repercussions from the vast law. California continues to forge ahead blinded by the potential revenues extorted from businesses and customers, despite the phony science and altered data.

Since Gov. Jerry Brown decided to monetize CO2 carbon emissions, and approved plans to tax utility customers, business owners and taxpayers for the emissions, the state stands to take in an extra $1 billion in revenues.

Phony science

The Daily Caller recently reported about this phony science. “Leaked documents obtained by the Associated Press show that the U.S. government and several European governments tried to get climate scientists to downplay the lack of global warming over the past 15 years.”

“The U.S. government along with some European nations tried to convince the report’s authors to downplay the lack of warming over the past 15 years,” the DC said. “The highly anticipated United Nations report on global warming is expected to affirm the link between human activity and global warming, but scientists are still having trouble explaining away the lull in rising global temperatures over the past 15 years despite rapidly rising greenhouse gas levels.”

And now, one MIT scientist rips the latest International Panel on Climate Change report:

MIT Climate Scientist Dr. Richard Lindzen told Climate Depot on September 27, 2013:

“I think that the latest IPCC report has truly sunk to level of hilarious incoherence.  They are proclaiming increased confidence in their models as the discrepancies between their models and observations increase.”

… in attributing warming to man, they fail to point out that the warming has been small, and totally consistent with their being nothing to be alarmed about.  It is quite amazing to see the contortions the IPCC has to go through in order to keep the international climate agenda going.

Pravda even mocks global warming

“For years, the Elites of the West have cranked up the myth of Man Made Global Warming as a means first and foremost to control the lives and behaviors of their populations,” Pravda writer Stanislav Mishin wrote in ”Global Warming, the tool of the West.”

“What better way to staunch protests at worsening economic and life conditions than to make it feel like an honourable job/duty of the people to save ‘Gia.’ At the same time, they used this ‘science’ as a new pagan religion to further push out the Christianity they hate and despise and most of all, fear?” Mishin asked.

“Gia worship, the earth ‘mother,’ has been pushed in popular culture oozing out of the West for a better part of the past 1.5 decades. This is a religion replete with an army of priests, called Government Grant Scientists.”

Mishin is right. Global warming, climate change hysteria and environmentalism has become a ‘religion’ of irrational proportions. But it has also become a giant financial scheme as evidenced by the many government subsidized ‘Solyndra-type’ clean-energy scandals.

And, even as the TIME magazine cover spoof showed in 2009, the United Nations IPCC lied about the effects of global warming by using phony science and doctored data. It was revealed that The International Panel on Climate Change science was a deliberate hoax.

This very expensive climate change hoax appears to be thriving today under the careful manipulations of the California Air Resources Board, and Gov. Jerry Brown.

But in a 2012 interview, Dr. Richard Lindzen told the NY Times, “You have politicians who are being told if they question this, they are anti-science. We are trying to tell them, no, questioning is never anti-science.”

Despite insistence from Convention Center officials that the center is an economic driver, a new report shows quite the opposite; the convention center is an economic sinkhole.

That sucking sound coming from the downtown is $16 million in annual losses over a 10-year period, and cumulative losses over the past 14 years of $218 million — greater than the city council's proposed $211 million cash subsidy of the proposed sports arena for the Sacramento Kings.

The city has an answer for this conundrum: rebuild an even bigger, more expensive Convention Center, rather than outsource the convention business, as most large cities are doing.

According to Eye on Sacramento, the public policy watchdog group which produced the report, the annual $16 million convention center deficit is being funded by the city's 12 percent hotel tax. “Fully four-fifths of the $20 million annually brought in by the hotel tax is consumed by losses at the convention center, while most California cities use their hotel tax revenue to fund an array of services, particularly support for the arts,” EOS reported.

Eye on Sacramento has worked for several years for transparency and effectiveness in Sacramento local government. The group has produced many in-depth reports on areas of city government, including crunching the real numbers on the proposed Kings arena project.

Convention center losses = 160 new cops

Eliminating the $16 million annual subsidy of Convention Center losses would allow the city to hire 160 new police officers, EOS found. “The annual loss equates to 59 percent of the new taxes the city is collecting from voter passage last year of a one-half percent hike in the sales tax, Measure U. The annual $16 million loss is more than the city spends out of its general fund each year on park maintenance.”

The Sacramento Bee, the city’s newspaper of record, has been silent on the new report, released September 4. Craig Powell, the President of Eye on Sacramento, said he sent several emails including the report to the Bee editorial board, but has not even received a response.

However, the Sacramento News and Review, an alternative weekly newspaper, did a comprehensive story on the convention center report.

I recently spoke with Powell about the EOS report.

“City leaders have a growing penchant for creative, and aggressive, municipal financing,” he said. “The city is poised to announce plans for both a major expansion of the 134,000-square-foot convention center and a $50 million rehab of the 2,422-seat theater.” The theater remodel has been driven by legal pressure to bring the theater into compliance with the Americans With Disabilities Act.

But according to Powell, there are two problems:

* The convention center expansion and theater rehab would be financed almost entirely with new city borrowings.

* And the only available funding source for debt service on such borrowings — the city’s 12 percent hotel tax — is already slated to serve as collateral for the approximately $250 million of bonds the city plans to sell to finance its promised $211 million cash subsidy for the new arena (in addition to approximately $140 million of noncash city subsidies).

It should be difficult for the city to justify spending $50 million to $200 million on expanding the convention center when its existing operations are running up eye-popping losses, Powell explained. But the city is about to double down on failure based on the argument that Sacramento needs to expand exhibit space to remain competitive with other West Coast cities.

Hotel tax is city revenue source

Powell said Californians had no idea how the hotel tax would expand as a revenue source for revenue hungry local governments, or how quickly local governments would come to rely upon it. The “Transient Occupancy Tax” was first passed in Sacramento in 1965 as a 4 percent hotel tax. It was raised to 5 percent in 1968, and by 1978, was up to 10 percent.

Voters approved a 1-cent increase in 1990, a ½-cent increase in 1992, and another ½-cent in 1994, bringing it to today’s 12 percent.

According to Powell, the city has overcommitted the 12 percent hotel tax to fund:

* Collateral for the repayment of hundreds of millions of dollars in bonds to finance the construction of a sports arena at Downtown Plaza;

* Funding the expansion ($50 million to $200 million) of the Sacramento Convention Center;

* Helping finance a $50 million rehab of the Community Center Theater; and

* Funding a number of projects for Sacramento's struggling arts community.

Had Sacramento city councils ever allowed development along Sacramento’s two beautiful rivers — the Sacramento River and the American River — perhaps Sacramento would be a destination point, as other river cities are. Sacramento is a valley town and is not a prime destination point.

In the real world, private sector businesses outgrow existing facilities before committing to build larger structures. Building a bigger convention center will not turn Sacramento into a destination city, and will only force Sacramento taxpayers deeper into the unsustainable money pit.

It’s been trendy for a couple of years now for people to dump their phone landlines and go only with their mobile phones, saving money and hassles.

The government is going in the opposite direction, setting up both land and mobile phones heavily subsidized by taxpayers. The federal Lifeline program, created in 1985, originally provided subsidized landlines. Now it also provides a free wireless handset, 250 free minutes, texting and voice mail, as well as national calling, for only $9.25 per month. It’s sometimes called the ObamaPhone program.

Now California might expand its phone welfare role. AB 1407, by Assemblyman Steven Bradford, D-Los Angeles, would give the Legislature the power to increase phone surcharges on taxpayers to expand the California Public Utilities Commission Lifeline program, which could increase costs to ratepayers to nearly $1 billion per year.

The CPUC state program is still landline only, and only provides for local calls.  The AB 1407 program would add another $11.38 “discount” on top of that amount, and still not deliver a better product.

Legalities and excessive taxation

There are other issues with Bradford’s bill. According to the Howard Jarvis Taxpayers Association, AB 1407 constitutes an illegal tax under Article 13A of the California Constitution.

“The state version of this program is not necessary, or at minimum should be drastically reformed,” HJTA Legislative Director David Wolfe said in a recent letter to Bradford.

Maybe it is in some areas. But overall, tremendous problems remain unresolved.

According to a recent USA Today news story, 10 cities in California are on the brink of bankruptcy: Atwater, Azusa, Compton, Fresno, Hercules, Mammoth Lakes, Monrovia, Oakland, San Jose and Vernon.

Atwater declared a fiscal emergency last October. All 10 have had their credit ratings significantly downgraded. Mammoth Lakes already filed for federal bankruptcy protection, but withdrew its petition.

San Jose has run 11 consecutive general fund deficits. Oakland is cutting police and other city services. And Fresno nearly privatized its citywide garbage pickup.  Sacramento can’t be far behind, with delusions of grandeur for a publicly funded arena on the horizon. The state Capitol needs a new sewer system, not a new NBA palace for the Sacramento Kings.

And of course, last year two cities actually did declare bankruptcy: Stockton and San Bernardino. They didn’t get as much publicity as the recent Detroit bankruptcy. But the two cities’ populations combined equal 500,000, not far behind Detroit’s 700,000.

Brown’s third term

One year into his third term as governor, during his 2012 State of the State address, Brown touted California’s “recovering” economy. He also led a cheer as he pushed for his tax increase measure, Proposition 30. And it worked.

Prop. 30 was passed by voters in November 2012. It raised the sales tax on everyone, and upped the income tax on individuals and small businesses making more than $250,000 a year.

“California is on the mend,” Brown said in 2012 as he spent the year touting the High-Speed Rail plan, pushed for implementation of AB 32, implemented the go-it-alone cap-and-trade plan, advanced an expensive Delta water project, and set a goal of achieving 20,000 megawatts of renewable energy by 2020 even though California cannot provide enough consistent electricity to the state using traditional methods.

While he touted California’s economic recovery, Brown criticized “dystopian journalists” and Republican critics. It’s likely to be a major campaign theme next year. And as he showed in his 2010 bid, he still knows how run an effective campaign.

Deja vu all over again

Brown is notorious for saying the state “lives within its means.” And the budget this year balances on paper. However, High-Speed Rail would cost $68 billion and the Delta water tunnel plan would cost $25 billion. He also admits he has yet to deal with what he calls a “wall of debt“: largely money owed for pensions; and for unemployment insurance payments borrowed from the federal government.

Led by Brown, California politicians continue to espouse the belief that our fabulous climate, beautiful beaches, world-class ski resorts and hip California lifestyle will always keep the rich here paying taxes.

State politicians claim that the state’s wine industry, agriculture, computer geniuses in Silicon Valley, the University of California system and even Hollywood will always be enough to keep the state from ending up like Detroit.

But the seeming prosperity is like a castle built on the sand of one of the state’s famous beaches. Compared to Texas, Florida and other states with more business-friendly environments, California is not well placed to confront the next recession, whenever it occurs. The next slump could end up being a lot like the devastation of 2008-10, with the current prosperity washed out to sea.

The National Treasury Employees Union wants its members to be exempted from Obamacare.

The union, which represents 150,000 total union employees,  of which 100,000 are IRS employees, not only endorsed President Obama for election and re-election, but the union’s current president, Colleen Kelley, was a 14-year IRS agent and now is both union president and an Obama administration appointee, according to Spectator.org.

The Washington Times reported Friday:

IRS employees have a prominent role in Obamacare, but their union wants no part of the law.

National Treasury Employees Union officials are urging members to write their congressional representatives in opposition to receiving coverage through President Obama’s health care law.

The union leaders are providing members with a form letter to send to the congressmen that says “I am very concerned about legislation that has been introduced by Congressman Dave Camp to push federal employees out of the Federal Employees Health Benefits Program and into the insurance exchanges established under the Affordable Care Act.”

IRS employees will be the enforcing arm of Obamacare, responsible for collecting data and applying penalties, enforcing mandates, required taxes, and reporting, as well as a myriad of other requirements. According to the Galen Institute, “based upon Government Accountability Office data, we count 46 new responsibilities assigned to the IRS under the health law,” which they said is “unprecedented.”

Holy bait-and-switch Batman!

The other terrific irony are the part-time Obamacare call center jobs currently being filled throughout the country, so the government doesn’t have to provide health insurance to the workers. The Contra Costa Times reported the giant new call-center in Concord, CA, with more than 200 employees, will staff with more than half of the employees as part-time workers with no health benefits.

“‘What’s really ironic is working for a call center and trying to help people get health care, but we can’t afford it ourselves,’ said one worker, who asked for anonymity out of fear of losing the job,” the CC Times reported. “The county says it had been telling the public and supervisors all along that some positions would be full-time and some part-time. However, portions of staff reports list all 204 jobs as full-time, and a job posting said the same.”

Workers said they feel as if they are “political tools.”

“The new hires, many of whom left other full-time jobs for the call center positions, were told they were the ‘cream of the crop,'” one recent hire said. Others said they turned down other job offers for the call center jobs, only to be given the runaround since accepting the positions, then finding out the jobs were part-time.

No  reasons for the employment status changes were given, the CC Times said.

“Those who became part-time were told they would have to pay full freight on their health plans, ranging from $600 to $1,200 a month for a single worker and between $1,400 to $2,900 a month for an employee with a family. That is a steep bill for employees with part-time jobs paying from $15.33 to $18.63 an hour.”

“During negotiations months ago, Service Employees International Union Local 1021, which represents the customer service agents, demanded 80 percent of health insurance premiums be paid by the county, and 20 percent be paid by the employee,” the CC Times reported. “SEIU did not return a call for comment.”

By Katy Grimes

An Assembly Constitutional Amendment attacking Proposition 13 is expected to be heard in the Assembly today, and some are saying it may even be passed by the Assembly.

The Howard Jarvis Taxpayers Association learned only yesterday that Assembly Constitutional Amendment 8 by Assemblyman Bob Blumenfield, D-Los Angeles, was moved out of the Assembly Local Government Committee and taken up without committee hearings or public vetting, and moved directly to the Assembly Floor today along with the other budget bills.

I had a chance today between floor sessions to talk with David Wolfe, Legislative Director for the HJTA, about ACA 8.

HJTA is a non-profit association “dedicated to the protection of Proposition 13 and the advancement of taxpayers’ rights, including the right to limited taxation, the right to vote on tax increases and the right of economical, equitable and efficient use of taxpayer dollars,” according to their website.

While a two-thirds vote is required to pass ACA 8 because it amends the Constitution, there are enough Democrats in the Assembly to pass the bill.

“This represents a direct attack on Prop. 13 because it lowers the two-thirds vote to 55% to fund various infrastructure projects,” Wolfe, told me.

“This sets up an unexpected opportunity to tarnish the Governor’s budget,” Wolfe explained. “We can now make the case that instead of demonstrating restraint, Democrats are showing their true colors. All they’ve ever really wanted to do with their supermajority is raise your property taxes.”

According to Wolfe, ACA 8 is a direct attack on Proposition 13 because it undermines the one percent property tax cap. Any bonds or special taxes approved by voters are added onto property tax bills ‘below the line’ and are separate from Prop. 13’s stable one percent threshold.

This is why Californians commonly pay 1.2 or 1.3 percent on your property tax bill. Lowering the two-thirds threshold would mean this amount will go even higher.

“For evidence of what happens when the threshold is lowered, look to Proposition 39 school bonds,” Wolfe said. “Hundreds of millions of dollars of bonds have been approved across California in the last 12 years that would not have occurred with a two-thirds vote.”

Prop. 39 was passed in 2000, specifically to reduce the threshold required to pass local California school district bond issues from a 2/3rds supermajority vote to a 55 percent supermajority vote. “Prior to the passage of Proposition 39, about 60% of local school bond ballot questions succeeded in getting the previously required 2/3rds vote. In the wake of its passage, about 75% of local school districts are passing with the 55% requirement,” according to Ballotpedia.

Even with Prop. 13, California is only 14th in combined state-local per capita property tax payments according to the Tax Foundation. “If ACA 8 clears the Legislature and is approved on the statewide ballot, this will move property taxes closer to the number one rank we already hold in other broad-based tax categories like income taxes, sales taxes, and gas taxes,” Wolfe said. “Only property owners will pay for these bonds over 30 years but everybody gets to vote on them, making the two-thirds vote of crucial importance.”

 Public infrastructure projects’ snowball effect

The language of “public improvements” listed in ACA 8 is incredibly broad. It does not just target public safety infrastructure facilities but targets streets and roads, sidewalks, transit systems, highways, water and sewer systems, parks and the furnishing and equipping of buildings,Wolfe explained. “The ‘life-cycle cost’ on this bond debt would be heinous,” Wolfe said.

“For those who say ‘Ah, let the people decide’ well, they have,” Wolfe added. “According to polls released this month, 62 percent of voters still support Prop. 13.”

“A recently released Field Poll showed well less then 50 percent of voters supported a change to lower the two-thirds vote threshold for special taxes under any circumstance.”

If ACA 8 passes, it will be unprecedented, Wolfe said.

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.”