Tax spat

Mar 13, 2012

With competing tax proposals aimed at the November ballot,  big-ticket political players are taking a cautious stance -- so far.  


From the Bee's Kevin Yamamura: "The California Chamber of Commerce announced its opposition today to two of Gov. Jerry Brown's tax rivals but remained silent on the governor's own plan, tacitly giving his proposal a boost as he tries to thin the field."


"The Chamber's board voted to oppose a tax on millionaires circulated by the California Federation of Teachers, as well as a progressive income tax hike on most earners backed by wealthy attorney Molly Munger. It did not take a vote on Brown's initiative, according to Chamber president and CEO Allan Zaremberg."


The mother of all tax measures, Proposition 13, is also getting another look, this time from L.A. mayor Antonio Villaraigosa, who has national political ambitions. Messing with the 1978, voter-approved initiative that slashed property taxes 57 percent and capped new assessments is politically dicey.


From the LAT's Chris Megerian: "Los Angeles Mayor Antonio Villaraigosa once again jumped on the third rail of California politics on Monday, telling lawmakers that businesses are unfairly exploiting Proposition 13, the constitutional amendment limiting property tax increases."


"Proposition 13 has fallen victim to the law of unintended consequences,” he said during a Capitol hearing. "What was conceived of as a measure to relieve the tax burden on homeowners has had the effect of benefiting commercial property owners at the expense of homeowners."


"Villaraigosa has urged changes to Proposition 13 before, calling it a “corporate tax giveaway” in August and urging Gov. Jerry Brown to "test the voltage in some of these so-called third-rail issues."

Villaraigosa, by the way, declined to approve any of the competing tax-hike ballot measures -- the governor's, Molly Munger's or the CFT's. The Times' Nicholas Riccardi reports.


"Los Angeles Mayor Antonio Villaraigosa on Monday declined to back any of the three income tax initiatives competing for space on the November ballot, saying that efforts to raise taxes on top earners lead to too much volatility in state revenue and compound California's budget problems."


"I know that polls well, but we already have too many swings with the personal income tax," Villaraigosa said in an interview at The Times' Sacramento bureau."


"The mayor said he still may end up supporting one or more of the proposals should they qualify for the ballot. "We may need to do this, but this isn't the way to fix it," he said of California's perennial budget distress."


How the money is raised is one thing, how it's spent is another. Funds are used in the Capitol as part of the political landscape, with loyalists winding up with decent office budgets and others getting the shaft. And that's just part of the story.


From Joe Piasecki in the Pasadena Sun, Part I of a three-part series: "Assemblyman Tony Mendoza (D-Artesia) said his staff budget was cut and he was reassigned to a smaller capitol office shortly after refusing to contribute to Democratic Party coffers in November 2010."

“They shake you down for money,” said Mendoza, who saw his budget for aides, district offices and basic supplies cut by $80,000 after Speaker John Pérez (D-Los Angeles) changed his committee assignment at the start of the 2011 legislative session."

"Pérez asked Assembly Democrats to donate at least $32,500 to the party and $25,000 to Democratic voter registration efforts in 2011, according to fundraising letters obtained by the Sun."


The second and third installments can be seen here, and here.  Part II  examines how elected officials use the Assembly’s very fluid budget system to increase their personal staff and resources, while Part III reports on how Assembly spending on political staffers has increased over time.

And continuing on the pocketbook theme: California's annual pension contribution to CalPERS could climb by $425 million, a boost that couldn't come at a worse time, given the economy and state budget woes.

From the Bee's Dale Kasler: "The state's cost of supporting CalPERS could jump by as much as $425 million in the next fiscal year, generating more political heat on public pensions at a time of massive budget deficits."


"The additional cost would result from a proposed reduction in CalPERS' all-important investment forecast. The pension fund today will consider slashing its forecast by half a percentage point, to 7.25 percent."


Meanwhile, a survey of small-business executives contains some bright nuggets amid the gloom on the economy, budget and job creation.  Marc Lifsher in the LAT tells the tale.


"Employers -- just over half of them with 19 workers or less -- have trouble finding capable staff and then have trouble navigating clogged freeways, said Scott Hauge, a San Francisco insurance broker who is Small Business California's founder and president."


"Those problems as well as broader economic issues contributed to 65% of those surveyed saying that business conditions in California are "pretty seriously off in the wrong direction."


"Nevertheless, that glum reaction is an improvement on the previous year's survey results when 70% of the participants said the state was going the wrong way. "While they're still frustrated, the number is better this year," Hauge said."

Get the daily Roundup
free in your e-mail

The Roundup is a daily look at the news from the editors of Capitol Weekly and
Privacy Policy