Assembly Constitutional Amendment 4 would place on the ballot the question of whether taxes for transportation projects should be approved with just 55 percent of the vote instead of the current two-thirds approval requirement. An affirmative answer to that question would likely result in billions of dollars being transferred from California taxpayers to county transportation agencies in coming years.

Nineteen of California’s 58 counties – known as “self-help” counties – have passed the two-thirds threshold to tax themselves for transportation projects, costing their residents more than $3 billion annually. Many other counties have tried repeatedly to pass tax hikes, but failed to reach 66.67 percent approval.

“These self-help counties have consistently provided reliable and stable funding for transportation – funding that far outstrips state and federal funding on an annual basis,” said the bill’s author, Assemblyman Jim Frazier, D-Oakley, at the Assembly Transportation Committee hearing in April. “Despite the success of these self-help counties, a two-thirds voter approval threshold is a near impossible hurdle for other counties that are aspiring to be self-help counties. As a result, these counties are deprived of much-needed funding for transportation infrastructure, maintenance and operations.”

Frazier also argued that every billion dollars in transportation taxes produces 21,000 jobs. “ACA4 is a common sense measure that will help rebuild our roads while providing a significant economic benefit to our economy,” he said.

He was backed by county transportation officials who have been frustrated at not being able to raise taxes to provide what they consider much-needed improvements.

“We are the only county in the Bay Area that currently does not have its own transportation sales tax at the local level,” said Matt Robinson, representing the Solano Transportation Authority.  “We’ve been out three times to get one of these passed in our county. We’ve come really close. Twice we got more than 60 percent of voter approval in the county, one time as much as 64 percent. So we barely missed it.

“We are looking at going next go-around for a five-year measure. Hopefully, a scaled-back version of that will incentivize the voters in our county to come in. This bill will be a significant step in helping us achieve that goal. We have approximately a $744 million funding gap as projected in the latest Local Streets and Roads Needs Assessment. This bill would help move us closer to finding a local solution to meeting our county’s transportation needs.”

The statewide funding shortfall is $78.3 billion over 10 years, according to the report.

Delaney Hunter, representing the Ventura County Transportation Commission, echoed Robinson.

“We have tried multiple times in Ventura County and can’t get close enough,” she said. “If you’ve been to Ventura, we have lots of needs, we don’t have the money. We are struggling in matching state funds and federal funds. We think it’s the fair question to ask voters: Is 55 [percent] the right number? If voters don’t think it’s the right number, we’ll keep trying it at two-thirds.”

David Wolfe, representing the Howard Jarvis Taxpayers Association, and speaking on behalf of the California Taxpayers Association and National Federation of Independent Business, is concerned about weakening Prop. 13’s two-thirds threshold for raising taxes.

“This does represent a direct attack on Proposition 13,” Wolfe said. “We are talking obviously about sales taxes. We are talking about personal taxes as well. As regards personal taxes, these are very regressive. These taxes are included on property tax bills separate from Prop. 13’s one percent cap. And explains why we are fourteenth in combined state and local per capita property taxes in California.

“But it also applies to [California] sales taxes, which are the highest in the nation. Some municipalities have rates at or near 10 percent in the state. And we just fear that, especially with the expansive list of projects listed here in ACA4, that taxes are going to increase by billions of dollars annually – again in a very regressive way.”

Jeremy Merz, representing the California Chamber of Commerce, began on a conciliatory note, commending Frazier for attempting to find funding mechanisms to improve state transportation.

“We understand how critical California’s transportation infrastructure is to the economy, both for moving goods and moving people, employees, students,” he said. “We understand that the current funding methods are insufficient at this time.

“Our issue with this particular constitutional amendment is that it contains few parameters of how it can be set up at the local level aside from where the funding must go. In particular we worry that it will allow for discriminatory taxes on certain industries, certain businesses, certain products for the purposes of political expediency. We think the two-thirds threshold serves as a bulwark against the majority taxing the minority.

“We respect the point about money for transportation creating projects and potentially jobs. We just don’t think those jobs should come at the expense of an industry or employer that would be a victim of a targeted tax and would have to lay off workers or not hire. We have acknowledged that taxes should be broad-based, such as a broad-based sales tax. If that were the case we would definitely reevaluate any constitutional amendment reducing the threshold. We just don’t think this particular mechanism is the way.”

Frazier responded by pointing out that his bill does not lower the approval threshold to 55 percent, but simply places a measure on the ballot asking voters to decide whether they want to do so.

“They still have the opportunity to turn this down,” he said. “But by telling people that they can’t have that right to be able to make a decision, we are treating them like children. And that shouldn’t be. This is an opportunity. As a transportation commissioner, I have seen the benefits in leveraging state dollars and bond dollars to [close] a [funding] gap that the state cannot fulfill.”

ACA4 is similar to Proposition 39, which was approved in 2000. It allows school facility bond measures to pass with 55 percent approval instead of two-thirds. After the proposition’s passage, three-quarters of school bond measures passed compared to about 60 percent previously, according to Ballotpedia. That resulted in a $2.3 billion increase in bonded indebtedness in California school districts in 2008 over what would have occurred had Prop. 39 not been in effect.

In the June 2014 election, only about half of the tax hike measures requiring two-thirds approval passed, according to a legislative analysis of the bill. But about two out of three measures with a 55 percent threshold for passage were approved.

ACA4 passed along party lines in the Assembly Transportation Committee in April and in the Assembly Revenue and Taxation Committee on July 13. It will next be considered by the Assembly Appropriations Committee.

Denise Cross / flickr

Referendums on legislative actions may be making a comeback in California.

Earlier this week, opponents of Senate Bill 277, the mandatory vaccination measure, began their quest to refer that legislative action to the voters for the November 2016 election. Already qualified to appear on that ballot is a referendum on banning single use plastic bags in the state.

Taking on legislative acts via direct democracy is not so common. The first obstacle is the short 90-day period allowed to gather the necessary signatures. Of course, with the low voter turnout in the last gubernatorial election, the number of signatures needed has dropped. Now, obtaining just 365,880 valid signatures will place a measure on the ballot.

While 49 referendums made it to the California ballot between 1912 and the most recent general election in 2014, 34 of those referendums appeared on ballots prior to the end of World War II. If you dismiss the referendums dealing with Indian Gaming and all the money that supporters and opponents on that issue have to help qualify a measure, since 2002, only two referendums have qualified for the ballot — a health care measure in 2004 and a redistricting referendum in 2012.

Now, we could see two on the next ballot. Maybe more.

Elections analyst, Allan Hoffenblum of the California Target Book, told the Los Angeles Times he thinks the vaccination referendum could qualify. “It’s a minority of people but it’s a sizeable minority of people. I would be surprised if it didn’t qualify. There is a lot of intensity.” Hoffenblum said.

While the measure may qualify, it faces big obstacles to overturn the legislative action. Polls indicate support for mandatory vaccination of school children. The PPIC poll in May found that 67 percent of all Californians and 65 percent of parents of public school children support the mandate. Furthermore, while passionate opponents of the law would be good foot soldiers in an effort to get the measure passed, there remains a question of how much money could be raised to deliver the message statewide.

And, while pharmaceutical companies have claimed a distance from the law, they could play a financial role in any ballot contest in support of the law.

In addition, there is the often difficult to understand requirement that if you are for the referendum but against the law you must vote “No.” The referendum essentially asks if you support the law passed by the legislature, “Yes” or “No.” The question is not whether you support the referendum. Voters can be confused.

Could other referendums come along?

Probably the most well-known referendum in California history was the battle over a peripheral canal. Voters overwhelmingly rejected the canal in June 1982. A proposal in the same vein, Gov. Jerry Brown’s push for Delta Tunnels, could face a referendum if legislation passed to move the tunnels plan forward. (There is already an initiative effort that would require a vote of the people on major projects like the tunnels that is in the works. If tunnel legislation becomes law before the initiative is voted upon, opponents of the tunnels may turn to a referendum.)

Then there is SB350 to cut 50 percent of all petroleum use by 2030. If passed this term, could opposing oil companies mount a referendum and ask voters if they agree?

Other major issues that could arise from the special sessions will not face referendums. If tax increases are passed by the legislature, they will become law without opponents having the opportunity to refer that action to voters.

Article 2, Section 9(a) of the state Constitution prohibits referendums “providing for tax levies or appropriations for usual current expenses of the state.”

Gov. Brown has previously indicated that he doesn’t plan to ask voters about a tax increase this time around, and the voters can’t use the referendum power to demand a vote on taxes.

In the press release announcing the sessions, the governor stated that the sessions were to “find more adequate funding for our roads and health care programs.”

The governor asked for “permanent and sustainable funding to maintain and repair the state’s transportation and critical infrastructure.” He also wants “permanent and sustainable funding to provide at least $1.1 billion annually to stabilize the state’s General Fund costs for Medi-Cal,” some of which would be used to meet the demands of programs Democratic legislators sought funds for in the current budget such as In-Home Supportive Services.

At the governor’s press conference announcing the budget deal, reporters asked Gov. Brown about his first term (third term?) campaign pledge to only seek tax increases with approval of voters. Gov. Brown’s answer indicated the pledge only applied to his first term.

Add it all up and there will be a push for tax or fee increases to support the governor’s call for “permanent and sustainable funding.” Discussions will revolve around gas taxes and a higher car tax or maybe a mileage fee for transportation; perhaps an increased cigarette tax and other health care taxes for Medi-Cal.

Brown might hope for support from the business community for the transportation and infrastructure fix. Those issues have been of on-going concern to business.

Still, the large influx of dollars in the current budget and the talk of tax proposals that may end up on next year’s ballot will only increase the anxiety of businesses and taxpayers alike, and could result in stalemated special sessions.

Editor’s note: See correction at the bottom.

Toto, I have a feeling we’re not in Kansas anymore. We’re in California, where the winter weather is in the 70s and the high taxes are imposed by the Great and Powerful Oz.

Writing in Al Jazerra, David Cay Johnston said Kansas’ tax cuts hurt it, while California was helped by its $7 billion in tax increases, which voters approved with Proposition 30 in 2012. He is an investigative reporter, Pulitzer Prize winner and professor of business, tax and property law of the ancient world at the Syracuse University College of Law.

His headline: “Real world contradicts right-wing tax theories.” Subheadline: “California raised taxes, Kansas cut them. California did better.”

He wrote:

“Ever since economist Arthur Laffer drew his namesake curve on a napkin for two officials in President Richard Nixon’s administration four decades ago, we have been told that cutting tax rates spurs jobs and higher pay, while hiking taxes does the opposite.

“Now, thanks to recent tax cuts in Kansas and tax hikes in California, we have real-world tests of this idea. So far, the results do not support Laffer’s insistence that lower tax rates always result in more and better-paying jobs. In fact, Kansas’ tax cuts produced much slower job and wage growth than in California.

“The empirical evidence that the Laffer curve is not what its promoter insists joins other real-world experience undermining the widely held belief that minimum wage increases reduce employment and income.”

Let’s just deal with that.

First, as I seem to be the only one to have pointed out, California taxes actually have declined in recent years, not risen. I wrote in July:

“California taxes have dropped $6 billion in the last two years. That’s because Gov. Arnold Schwarzenegger’s record, $13 billion tax increase of 2009 expired and was replaced in 2012 by Gov. Jerry Brown’s $7 billion tax increase of Proposition 30.

“Net: a $6 billion tax cut.”

Now, guess what? The entire general-fund budget in 2013 for Kansas was $6.2 billion — roughly equal to the California tax cut.

So anything good Johnston says about tax policy in California has to be assigned to the tax cut here, not to an increase that didn’t happen.

‘Temporary tax’

True, from a Lafferite perspective, things would have been even better had Prop. 30 not passed. But in life, you take what you can get. And Gov. Jerry Brown, who campaigned for voters to pass Prop. 30, reminded us in October, “I said when I campaigned for Prop. 30 that it was a temporary tax, so that’s my belief, and I’m doing everything I can to live within our means.”

That’s highly encouraging to California businesses, which can look to an infusion of investments — Prop. 30 mainly is a tax on the wealthy — in a couple of years when the money is shifted back from the wasteful government sector to the productive private sector. Much more than government, businesses are forward looking.

If that happens, and Prop. 30 expires, taxes will have dropped $13 billion under Brown, the biggest tax cut of any state in history.

And if in 2016, Brown makes a fourth bid for president, all that will make for a compelling part of his “California is back [because of me]” narrative. Indeed, the Kansas governor’s own victory could put him in contention for the GOP nomination. How about a 2016 contest of Brown vs. Brownback?

By the way, it was Laffer who designed Brown’s supply-side, flat-tax proposal, a 13 percent income tax on everyone, during the governor’s 1992 presidential bid. So Brown, hardly the “right wing” partisan Johnston thinks goes for cutting tax rates, is well aware of supply-side economics.

Laffer also helped design California’s Proposition 13 tax cuts in 1978; and Ronald Reagan’s tax cuts that propelled more than two decades of strong American growth, until the unfortunate Bush-Obama policies of recent years. Laffer currently heads the Laffer Center for Supply Side Economics at the Pacific Research Institute, CalWatchDog.com’s parent think tank.

I recently reviewed, “The Pillars of Reaganomics: A Generation of Wisdom from Arthur Laffer and the Supply-Side Revolutionaries,” edited by Brian Domitrovic.

Supply-side

Johnston explained:

“Laffer’s model illustration looks like a bullet pointed to the right. It shows that the government collects no revenue when tax rates are at 0 or 100 percent. As tax rates rise, revenue does until reaching an unspecified rate that Laffer calls “prohibitive.” Above that level, as tax rates rise, government revenues fall off quickly.”

But this seems pretty obvious, doesn’t it? If the income tax were 100 percent, would you work? Of course not, except on the black market. What would be the point? (The Laffer Curve graphic he kindly linked to is from Laffer’s own site, and is reproduced nearby.)

Johnston wrote:

“Laffer qualifies many of his assertions about changes in tax rates, noting that tax cuts may result in less government revenue, for example.”

Right. As you move down the lower part of the Laffer Curve, the white area, both tax rates and revenues drop. Taxes at a 0 percent rate obviously raise 0 dollars. (Unless the good professor volunteers to send the treasury a check.)

Kansas vs. California

Johnston continued:

“But on one issue from the Laffer curve, he is absolute:

“Tax rate cuts will always lead to more growth, employment and income for citizens, which are desirable outcomes leading to greater prosperity and opportunity.”

This is where the Sunflower State vs. Golden State rivalry comes in, an economic version of the Kansas State Wildcats vs. the UCLA Bruins at the Valero Alamo Bowl on Jan. 2.

“Is this absolute rule right?” Johnston asked. “Let’s consider the tax law changes in Kansas and California that took effect at the start of last year [2013; although Prop. 30 actually was retroactive to Jan. 1, 2012].”

He recounted how Gov. Sam Brownback ran for office in 2010 “to turn the state into a low-tax paradise and eventually to eliminate the state income tax….The Brownback administration paid Laffer $75,000 for his advice on the tax cuts.” Effective in 2013, “The bottom rate was cut from 3.5 percent to 3 percent. The top rate, which starts at $15,000 of taxable income for singles, was lowered from 6.25 percent to 4.9 percent.”

Imagine that! A politician who actually kept the campaign promise under which people elected him. Indeed, Brownback last month was re-elected, despite concern that his tax cuts caused budget deficits. The Kansas City Star reported:

“After he addressed his supporters, Brownback told The Star he looked forward to the next four years.

“’We’ve done the hard things,’ he said. ‘Now we can do the things that we want to do. We can invest in education growth because we’ve made the tough decisions. Now we can work on issues like poverty and water because we’ve made the tough choices.’

Brownback also plans on reducing Kansas’ deficits by cutting waste, which as everywhere in government is larded as thick as on a holiday hog.

And with Brownback and his tax cuts now firmly entrenched, Kansas businesses can plan their prosperous futures. I suspect, just as Laffer’s theory predicts, the prosperity will increase the tax base, thus providing higher taxes which also will close the deficit.

“The same month the Kansas tax rate cuts began, tax rates rose in California,” Johnston wrote. But as we have seen, looked at in a slightly larger perspective, California’s taxes dropped $6 billion — which helped that other tax-cutting governor, Jerry Brown, also win re-election.

Bond rating

Johnston brought up state bonds:

“Moody’s Investors Service lowered the state’s credit rating after the $800 million of tax cuts took effect, a move Brownback dismissed as telling more about Moody’s policies than Kansas’ finances. Later Standard & Poor’s also downgraded Kansas bonds, citing ‘a structurally unbalanced budget,’ in which taxes were cut more than spending.”

He also could have cited how California’s bond rating was upgraded right after voters just passed Proposition 2, the “rainy day fund” initiative.

Except that, despite these changes, Kansas still has higher bond ratings. California’s S&P bond rating rose to “A-plus” from “A.” S&P defines that as, “Strong capacity to meet financial commitments, but somewhat susceptible to adverse economic conditions and changes in circumstances.”

Kansas’ S&P rating, from the August downgrade, went to “AA-minus” from “AA.” S&P defines that as — note the lack of a cautionary note — “Very strong capacity to meet financial commitments.”

As to Moody’s, it rates California’s bonds “Aa3,” but Kansas’ higher, at “Aa2.” Both “Aa” ratings are defined as, “Obligations rated Aa are judged to be of high quality and are subject to very low credit risk.”

On bonds, Johnston summarized, “California’s credit rating improved. The Golden State can borrow at lower rates, while Kansas will have to pay more to compensate investors for the risk that the Sunflower State will lack the revenue to repay its debts.”

Except that Kansas’ rates still are lower that California’s and it will “have to pay” less overall “to compensate investors.”

Jobs

Folks care most about jobs. Johnston compared the two states:

“From January 2013 through September 2014, the latest data, California grew jobs at 3.4 times the rate of Kansas. Total nonfarm payroll jobs in Kansas increased 2.1 percent, in California 7.2 percent.”

He provided a nice graph:

Except that, as of October this year, Kansas’ unemployment rate was just 4.4 percent, 10th best of all the states and D.C.; compared to 7.3 percent in California, 47th best (4th worst).

According to Businessweek, “In the U.S. a full-employment economy more realistically is closer to the 3 percent to 4 percent mark….”

So Kansas is close to “full employment.” Those without jobs basically are between jobs. Or looking for Dorothy.

Employment can’t go up faster because everybody already has jobs. It’s like when your teenage son stops growing at 18, you don’t complain that he doesn’t keep rising to 10-feet tall.

So for working stiffs in Kansas, the Laffer-Brownback tax cuts worked!

Compensation

One area Kansas seems to lag is in compensation. Johnston wrote, “Compensation in California also grew faster than in Kansas. California’s average weekly wage of $1,165 in the first quarter of this year was 13.4 percent higher than in mid-2012, while the Kansas average of $840 was up only 10.1 percent.”

Except that, for the second year in a row, according to the U.S. Census Bureau, California suffers the nation’s highest poverty rate when the cost of living in this incredibly expensive state is taken into account. Part of the reason is that California’s high taxes, with the shocking 9.3 percent income tax rate digging in at about $55,000 of earned income, also gouge the middle class.

A shocking 8.9 million of our 38 million residents languish in poverty, or 23.4. That 8.9 million is three times Kansas entire population of 2.9 million.

By contrast, just 11.8 percent of Kansans are in poverty, less than half California’s percentage.

Education

Taxes go somewhere. The biggest item in both states’ budgets is education. In California, we even have an initiative, Proposition 98, which mandates about 40 percent of general-fund taxes go to public schools. And the Prop. 30 tax increase largely was justified as benefiting K-12 school kids.

According to the National Assessment of Educational Progress, “In 2013, the average score of fourth-grade students in Kansas was 223. This was higher than the average score of 221 for public school students in the nation.” But just barely higher. It was middling, causing Brownback to seek further reforms.

NAEP found for California, “In 2013, the average score of fourth-grade students in California was 213.” That was 8 points below the national average of 221; and it was 10 points below Kansas’ 223 average.

So, for all California spends on education, and all the high taxes Johnston says benefit us, our kids’ score worse than in low-tax Kansas.

As EdSource reported of the 2013 scores:

“California students performed about the same in reading and math on this year’s National Assessment of Educational Progress as they did in 2011, ranking among the 10 lowest performing states in the country.

“Results from this year’s assessment show that only 33 percent of California 4^th grade students and 28 percent of 8^th graders are proficient or better in math. In reading, 27 percent of 4^th graders and 29 percent of  8^thgraders are proficient or better.”

Conclusion

I’ll skip Johnston’s discussion of minimum-wage boosts, which he thinks will help California. With the wage going up even further due to initiatives in four states and three California cities, and more to come in 2016, we’ll soon have some really good comparisons on that. (My earlier articles on it are listed here.)

But just one more thing, as the late Steve Jobs used to say. Johnston wrote, “Tax hikes did not hurt California job growth because the taxes were not on jobs but on high incomes.”

Once again — strike up the band — taxes have gotten lower in California. But as to the Prop. 30 income taxes only on “high incomes,” when “the rich” pay more in taxes, all of us suffer, too. Because it’s largely the rich who use their money to invest in creating new businesses and jobs, as well as fund numerous charities.

Johnston concluded:

“Ultimately, real world results trump theory. Actual changes in the number of jobs and what they pay should be used to set policy, not ideology, assumptions and expectations…. Time will tell. The important thing is that policy should follow the facts, no matter where they go.”

Yep.

Correction: This piece originally had Kansas’ Moody’s rating downgraded to Aa1; in it was fact one notch lower, at Aa2, to which the text has been changed. We regret the error. We were informed of this by David Jacobson, AVP, Communications Strategist-Public Finance Group at Moody’s Investors Service. He wrote, “In spring of this year we downgraded Kansas from Aa1 to Aa2, and in June we upgraded California from A1 to Aa3.  So the correct rating on Kansas is Aa2, and although the states are moving in different directions, Kansas does remain one notch higher than California.  Our median state rating is Aa1.”

TOKYO (AP) — Japan’s economy shrank more sharply in the second quarter than first estimated and the latest indicators suggest only a modest bounce back since then.

The world’s third-largest economy contracted at an annualized rate of 7.1 percent in the April-June quarter, according to updated government figures Monday. The initial estimate released earlier this month said the economy contracted 6.8 percent. Business investment fell more than twice as much as first estimated.

The economic crash was preceded by a brief “boom” of 6 percent annualized from Jan. to March as people and businesses went on a buying spree to avoid the onrushing tax increases.

If you’re old enough, you remember the threat Japan’s economy supposedly posed to America in the 1970s and 1980s. The late Michael Crichton published a 1992 novel about it, “Rising Sun.” The novel was made into a 1993 movie starring Sean Connery and Wesley Snipes. Ironically, Snipes himself was imprisoned for allegedly violating America’s own preposterous and confiscatory tax edicts.

Then around 20 years ago Japan began committing economic seppuku through high taxes, wild deficit spending and preposterous regulations. One “lost decade” turned into two. Now it looks like it’ll be three.

According to World Bank data, Japan’s national debt is 197 percent of GDP, higher even than bankrupt Greece’s 164 percent and more than double America’s 94 percent.

No wonder China’s economy has been soaring. The governments of its two major competitors, America and Japan, are engaged in a suicide pact to see which first can tax and spend its economy to death.

So I’m calling special attention to it here. Check it out and add replies if you wish.

With de Leon slated to become the next Senate president pro-tem later this year, SB768 enjoys increased clout behind it.

According to the bill, the money would go into “the Cigarette and Tobacco Products Surtax Fund, the Breast Cancer Fund, the California Children and Families Trust Fund, and the General Fund, to offset the revenue decrease directly resulting from imposition of additional taxes by this article.”

California’s current tobacco tax is is 87 cents a pack. So $2 on top of that would be a 230 percent increase. The bill’s language diverts some of the revenues to the “General Fund” because a new cigarette tax would reduce cigarette purchases due to people quitting and increased black-market smuggling. The reduced sales thus would cut the sales taxes that also are collected on cigarettes.

Even though Democrats have supermajorities in both houses of the Legislature, it might not be easy to get two-thirds voting margins in an election year. Moderate Democrats with lots of Republican voters might shy away from being labeled “tax increaser.”

Initiative

As a result, as a backup option, tobacco-tax advocates are firing up the California Tobacco Tax for Healthcare Initiative. It has been approved for circulation in California as a contender for the November 4, 2014 ballot. The initiative’s name is “The California Healthcare, Research and Prevention Tobacco Tax Act of 2014.”

The initiative also would raise taxes by $2 a pack, although the money would be disbursed differently from SB768. According to the Legislative Analyst, the money would go to anti-tobacco campaigns, cancer research and to abate budgets that lose money because of reduced cigarette sales.

In an estimate that also would apply to SB768, the Legislative Analyst estimates that a $2 a pack tax increase would increase revenues from $1.1 billion to $1.5 billion a year. However, after backfills, only $830 million to $1.4 billion would go to the specified projects.

Prop. 29

The new proposals are advancing less than two years after Proposition 29 was rejected by voters in June 2012. It would have increased taxes $1 a pack to fund cancer research, anti-smoking programs and law enforcement.

If the new tax increase goes on the November ballot, it also would have a tough time passing because it would be twice the amount proposed by Prop. 29. However, Prop. 29 barely lost, 50.3 percent to 49.7 percent, giving hope to tax increase proponents.

And SB768  is backed by the same coalition which supported Prop. 29: the American Heart Association, the American Lung Association, the American Cancer Society, the Service Employees International Union and Health Access California. All would benefit from the proceeds of the higher tax.

Black market 

The Tax Foundation published a study in Jan. 2012 which found nearly 60 percent of the cigarettes sold in New York state are smuggled from other states, or come from Indian reservations with lower tobacco taxes. The study found that tobacco smuggling and the tax rate have risen in tandem since 2006, a strong indication that tax increases and smuggling go hand-in-hand.

The New York State tax on cigarettes has risen 190 percent since 2006, while the rate of smuggling increased 170 percent. New York’s current rate is $4.35 a pack, a fair amount above the $2.87 tax California would impose should a $2 new tax be enacted by either the Legislature or the voters. But it’s clear, as the Leg Analyst also noted, that smuggling would increase.

The National Taxpayers Union Foundation released an excellent study in August detailing the recent history of tobacco taxes in the states. It found:

* States with low cigarette taxes have lower overall tax burdens;

* Tobacco tax hikes are rarely used to cut other taxes;

* Tobacco taxes don’t forestall other tax increases;

* Tobacco tax hikes may encourage other tax hikes down the road;

* Cigarette taxes don’t spur economic growth.

Other new taxes

Californians already pay the highest gas, sales and income taxes in the nation. Yet California lawmakers, on top of the potential new tobacco tax, also are introducing proposals that create new taxes and fees, including:

* SB241 by Sen. Noreen Evans, D-Santa Rosa, would impose a 9.9 percent oil severance tax;

* SB622 by Sen. Bill Monning, D-Carmel, would create a one cent per ounce tax on soft drinks and sweetened beverages;

* SB700 by Sen. Lois Wolk, D-Davis, would create a five cent tax on single-use paper or plastic bags.

SB 359 is by state Sen. Ellen Corbett, D-San Leandro. It approved a loan for $30 million to help finance low-income residents to transition away from older, higher-polluting vehicles. The bill also supports two state incentive programs for electric-drive cars, trucks and buses.

SB 459 is by state Sen. Fran Pavley, D-Aguora Hills. It requires the state to provide a voucher for a new alternative-fuel vehicle. The voucher would be given to low-income car owners who could not pass a smog test on their existing vehicle.

According to the bill analysis, the Enhanced Fleet Modernization Program established by AB 118 in 2007 has not “attracted substantial consumer participation.” Rebates have been issued to promote the very cleanest new vehicles paid for through smog abatement fees. In response, Pavley’s bill will hand out subsidies to remove “high polluting vehicles” from the road.

AB 8 is by Assemblyman Henry Perea, D-Fresno. It extended AB 118 until 2024. AB 118. For the current fiscal year, the program is expected to invest approximately $90 million to encourage the development and use of new technologies, and alternative and renewable fuels, to help the state meet its climate change goals. It is funded through vehicle and boat registration fees, as well as smog check and license plate fees.

While this is not the first voucher program CARB has created, it is the first that specifically targets low-income families who cannot afford an electric car.

As of early March 2013, the CARB has issued about 18,000 rebates totaling $41 million.

Also in March, the California Energy Commission voted to expand the state’s clean-vehicle rebate program with an award of $4.5 million to the California Air Resources Board through an interagency agreement to provide funding for the Clean Vehicle Rebate Project.

The latest fund award was made through the energy commission’s Alternative and Renewable Fuel and Vehicle Technology Program, created by

Transportation justice

In the San Francisco Bay Area, the Transportation Justice Working Group is part of the Social Equity Caucus, and is facilitated by Urban Habitat. They are fighting against “entrenched interests in transportation decision-making that have yielded socially and racially unjust outcomes for the past century in the Bay Area.”

To this group, transportation justice is about the highway system which has “displaced and cut up low-income communities of color and continues to burden them with toxic air pollution, traffic hazards and other disproportionate threats to their safety and health.”

These decisions have prioritized the construction and expansion of commuter rail systems, like BART and Caltrain, that are designed to serve affluent suburban riders, at the expense of urban bus systems,” the group said.

While the Transportation Justice Working Group is largely talking about restoring a once-effective bus system, the California Air Resources Board continues to push instead for new electric cars for the low income.

“Most plug-in electric cars cost more than the used cars that lower-income families and communities — the people who could most benefit from EV fuel savings, in other words — can typically afford. It doesn’t have to be that way, however, and California’s Air Resource Board is working to help low-income families get access to EVs by issuing vouchers starting at $2500.”

“With net operating costs approaching zero for cars like Nissan’s Leaf in some cases, electric car ownership could go a long way towards enabling low-income wage earners to get better education, as well as better access to healthy food and healthcare,” said Gas2, a car blog. “These low-income families would also be able to get to a number of private-sector jobs that, without an EV, would be off-limits to them. That means they’d quickly pay back CARB’s $2500 voucher through increased income, payroll, and sales taxes.”

The numbers

According to the governor’s working group on zero-emission vehicles, the roadmap toward 1.5 million zero-emission vehicles on California roadways by 2025, current spending will include:

* $44.5 million to help Californian buy low emissions vehicles such as plug-in hybrids and zero-emission cars and light trucks, with rebates of up to $2,500 as long as the funds last.

* The state’s hybrid and zero-emission truck and bus voucher incentive was increased from $5 million to $15 million. The vouchers of up to $55,000 are for fleet purchases of cleaner trucks and buses.

* The Truck Loan Assistance Program received an additional $18 million to help small-business fleet owners finance truck upgrades required by law.

STOP and Voters for a Fair Arena Deal said they filed the lawsuit against Sacramento City Council, the Sacramento city clerk,  and the city of Sacramento city over a decision to disqualify thousands of petitions that would have put the issue to a public vote on the June 3 ballot — a move many describe as government tyranny.

Jan. 24, the Sacramento city clerk announced that she rejected the petitions, along with 34,000 signatures, on the grounds some of the petition versions did not comply with election code.

“This is not a small number of people,” said Craig Powell, representing Voters for a Fair Arena Deal. “This is a significant contingent of Sacramento voters who’ve said ‘Let us vote.'”

Almost immediately after the announcement of the lawsuit, local Sacramento media reported the lawsuit is “by the group that doesn’t want the arena built.”

STOP and Voters for a Fair Arena Deal have said throughout the battle with the city, they are not opposed to an arena, and in fact are supportive of refurbishing the existing arena, or building a new one; they want the public subsidy of the arena project to be decided on by the voters of the city of Sacramento.

The attorney for STOP and VFAD said the errors the city clerk cited weren’t substantial enough to warrant disregarding 23,000 signatures, KCRA reported. “Nobody can claim they didn’t know what they were signing,” STOP attorney Bradly Hertz said.

“It’s really five mistakes that were really technical by the city clerk’s own admission, and (it is) almost silly that the city would rely on that as their way of trying to disenfranchise their voters,” said Hertz.

STOP is asking a judge to order the City Council to either adopt their petition, or place it on the June 3 ballot, and is hoping the matter will be heard by the Sacramento Superior Court immediately.

However, Judge Michael Kenny, the judge first assigned to the case, excused himself before a hearing in the case started, after it was revealed he had signed the petition to put the arena up for a vote, KCRA reported. The case was turned over to Judge Timothy Frawley.

Petition ‘errors’

STOP and Voters for a Fair Arena Deal said the five errors that the city clerk originally cited are not “substantive” and were just technical errors. Members of STOP told me they had a top elections attorney in the state review the petitions, and were told they complied with the law.

“The4000, a group representing the new downtown arena plan, responded to Friday’s decision by saying, ‘For STOP, this has never been about a vote and democracy; it has always been about tricking voters and stalling the arena with a two-part vote designed to blow up the project,’” reported Fox 40 news recently

The4000 was created by Sacramento Mayor Kevin Johnson, a former NBA player, and the lead proponent to build the new arena.

“We all support the clerk and the city’s efforts to protect the public interest, especially given what’s at stake,” Johnson said in a statement.

Read all of CalWatchdog stories on the Sacramento Kings’ arena deal HERE.

The creation of the 3-D gun is only about one year old. The first 3D-printed gun initially was fired in the spring of 2013.

3D printers are $10,000 machines that can use digital designs to build a variety of devices out of thousands of layers of hard plastic.

The homemade plastic gun, known as the “Liberator .380,” is made with a computer blueprint, a 3-D printer and plastic resin.

Law enforcement says plastic guns can pass through security checkpoints without setting off metal detectors. “They are so frightening because they render most standard detection useless,” said Tim Murphy, former deputy director of the FBI, in a Dallas News story.

It will be difficult to keep tabs on firearms that are made at home using 3-D printer. But SB 808, by Sen. Kevin de Leon, D-Los Angeles, requires a person to obtain a serial number from the California Department of Justice, and submit to a background check, prior to making a ghost gun.

It is already against the law to have an undetectable gun that could go through security monitors without being seen. That law was passed in In 1988 in the U.S. Congress under the Undetectable Firearms Act.

De Leon stressed SB 808 does not ban the ghost guns. “There is a loophole in the law for homemade guns,” de Leon said. “Ghost guns have fallen into the hands of criminals.”

Plastic guns

In the 1980s, the U.S. Congress looked into an Austrian-made Glock made of polymer plastic that opponents claimed was undetectable in airport screenings. Some cities, including, New York City, banned the Glock.

But according to Popular Mechanics:

“Airport security machines did detect the Glock because they’re mostly X-ray machines, and X-rays see plastic just the way they see metal. Moreover, by weight, the Glock is actually mostly metal anyway. The slide is made out of steel, so if you do have a magnetometer, it should detect that slide. And if someone is staring at it and knows what they’re looking for, they should be able to see it. This was a huge embarrassment for gun-control forces and a huge boon for Glock. There is no better way in the United States to get attention for a gun than to suggest it’s extremely potent and effective.”

Crime is not due to homemade guns

“The crime happening in the state is not due to homemade guns,” said Sen. Steve Knight, R-Antelope Valley, a former police officer. Knight explained most people are not able to tell the difference between homemade and undetectable guns.

“Somewhere along the path we’ve lost our way,” said state Sen. Joel Anderson, R-El Cajon. “We look at all guns as evil, not at criminals.”

Anderson said only law-abiding citizens will pay attention to the law. “Gangbangers will not. 3-D printers are available in some libraries. This is just more minutia The real problem is that gang members and criminals are out there. We’re not doing anything to collect their guns. But we are truing to collect the guns of law-abiding citizens.”

Anderson advocated focusing on serious policies that might reduce crime rather than going after guns.

De Leon said that, because Congress failed to pass gun control legislation last year, “We can act” in California.

SB 808 passed the state Senate, 21-9.