New taxes on the horizon?

May 26, 2015

Jerry Brown may not endorse an extension of Prop. 30, but some in his party seek to not only keep Prop 30’s taxes in place, but to add new taxes or restructure the tax system to increase revenue.  Chris Megerian at LAT:


“[A] series of tax-related proposals, some backed by powerful interest groups or a rich benefactor, could loosen [Brown’s] tight grip on the budget.


“Unions and grass-roots organizers are considering an effort to, over Brown's objections, extend the higher taxes that the governor persuaded voters to go along with in 2012. They are also pondering a proposal to alter the state's landmark restrictions on property taxes, to raise more revenue from commercial interests.


“In addition, billionaire environmentalist Tom Steyer is laying the groundwork for a possible oil extraction tax, medical groups want to raise the levy on cigarettes, and Sen. Bob Hertzberg (D-Van Nuys) is crafting a controversial bid to overhaul the state tax code.”


One tax increase Brown has embraced is a boost of the state’s gas tax.  Transportation revenues haven't matched costs for decades and Brown is looking to the legislature for help.  Jessica Calefati, San Jose Mercury News:


“Hiking the gas tax has always been politically risky, especially in a state where cars are still king and that gave birth to the anti-tax revolution in the late '70s.


“But hell might be about to freeze over: For the first time in decades, even anti-tax Republicans are open to raising prices at the pump to start cutting into the state's $59 billion backlog of roadway maintenance.


"’We're talking about taking some difficult votes,’ said Sen. Anthony Cannella, R-Ceres, the vice chairman of the Senate Transportation Committee. ‘We're going to get one bite at the apple, and I hope we get it right.’"


Associated Press’ Fenit Neparril looks at the Assembly’s practice of tapping its own operations budget to fund favored programs.


“Money for state-funded programs that do everything from providing meals to the elderly to helping poor people pay for child care typically comes from the state budget after a series of debates and votes….


“But since the recession, Assembly leaders have sent tens of millions of dollars to hand-picked programs. According to expenditure reports reviewed by The Associated Press, Assembly speakers Karen Bass, John Perez and Toni Atkins, all Democrats, have spent a total of $115 million on select programs between 2008 and 2014.


“Critics say this could amount to a slush fund that allows lawmakers to reward allies or curry favor with opponents.


“Assembly leaders insist that's not the case and say part of the reason they make such outlays is to maintain their funding. Under a system voters approved in 1990, the size of the operations budget is tied to a use-it-or-lose-it formula designed to keep taxpayers from overspending.”


Secretary of State Alex Padilla is looking to other states for ideas to boost the state’s dismal voter participation ratesJohn Wildermuth has the story at SFGate:


“Among the ideas that California’s new secretary of state hopes will boost anemic turnout: automatically registering people through the Department of Motor Vehicles and mailing a ballot to every registered voter.


“’It will take two big steps to tackle the problem,’ said Padilla, a former Democratic legislator from the San Fernando Valley who replaced the termed-out Debra Bowen after winning election in November.


“’First we have to register the estimated 6.7 million Californians who are eligible to vote but not registered,’ he said. ‘Then we need to have them actually cast ballots.’


“Voting officials across the state agree that something has to be done to get more people to the polls. The 42 percent turnout in November’s general election and the 25 percent for the June primary were both record lows for California.”


PG&E had information that could have helped avert the devastating 2010 gas line explosion in San Bruno – but never acted on it, according to a document obtained by the San Francisco ChronicleJaxon Van Derbeken has the story.


“If a line has a history of failed seams — the eventual cause of the San Bruno explosion — federal law requires that it be checked with a method that can detect such a problem, such as pumping it full of water at high pressure.


“That’s expensive, however, and PG&E preferred a cheaper method — one that could detect problems such as corrosion, but not a bad seam.


“In 2003, as they reviewed records to determine how to inspect the San Bruno pipeline under the new law, PG&E engineers created a map that highlighted the site of the October 1988 leak.


“At the top of the map someone wrote, ‘ERW concerns.’ ERW stands for electric resistance welds, which have been linked to hundreds of seam failures on pipelines and which existed on stretches of the San Bruno line.


“The map was never turned over to the National Transportation Safety Board when it investigated the cause of the San Bruno disaster. The Chronicle recently obtained it from a source who requested anonymity because of the sensitivity of the case.”


San Bernardino’s plan to exit bankruptcy is similar to those of Stockton and Vallejo, until you get to the part about contracting for many city services.  From Ed Mendel at Calpensions:


“A San Bernardino plan to exit bankruptcy follows the path of the Vallejo and Stockton exit plans, cutting bond debt and retiree health care but not pensions. Then it veers off in a new direction: contracting for fire, waste management and other services.


“The contract services are expected to reduce city pension costs. Other pension savings come from a sharp increase in employee payments toward pensions and from a payment of only 1 percent on a $50 million bond issued in 2005 to cover pensions costs.”


The LAO has many important tasks, evaluating the potential costs of legislation proposed by ballot initiative among them.  How much did taxpayers spend having analysts study the fiscal impact of the Shellfish Suppression Act?


“This measure would make the consumption or sale of shellfish (such as crab, lobster, and shrimp) a serious felony punishable by a fine of $666,000 and/or imprisonment of up to roughly six and a half years.


“Pursuant to subsection (c) of Section 9005 of the Elections Code, we are informing you that, in our opinion, a reasonable estimate of the net fiscal impact of this proposed initiative measure cannot be prepared within 50 calendar days from the date this proposed initiative was received.”

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