Legislative Session Ends, Taxpayers to Pay Even More as Usual Allies Vote for Tax Hikes
As the final day of the legislative session dawned last week, taxpayers were cautiously optimistic. After all, we had already stopped the most direct threats to Proposition 13. Those included Senate Constitutional Amendment 5, which would have weakened the rules regarding how some properties are valued for tax purposes and Assembly Constitutional Amendment 8, lowering the two thirds vote at the local level for taxes and bonds. Another success was notched by derailing an eleventh hour effort to make it much easier to raise property fees by broadly redefining sewer service to include storm water runoff programs. While seemingly arcane, this would have exposed California homeowners to billions of dollars in new property levies without direct approval.
As for more debt, taxpayers should be pleased that two multi-billion dollar bond packages, on parks and affordable housing, failed to clear the Legislature.
Now for the bad news. On the last day of session, our tax-and-spend legislature hit California consumers with a new tax on car batteries by passing AB 2153. This $1 tax on consumers will be paid at the point of sale, as will a $1 tax on manufacturers to be passed onto consumers. After 2022, the $1 tax on manufacturers is added to the consumer total increasing it to $2, and the tax is made permanent. While the revenue generated purports to deal with legitimate environmental issues regarding battery recycling facilities, thanks to AB 2153 receiving a two-thirds vote, the money can simply go into the General Fund and be used for any purpose.
Under the category of illegal as well as foolish, the Legislature authorized local municipalities to spend public money for political campaigns. Beyond the obvious argument that taxpayers should not be forced to finance campaigns with which they might disagree, Senate Bill 1107 is also in direct violation of the Political Reform Act which expressly prohibits such financing. To avoid costly litigation over the validity of SB 1107, Governor Brown could do taxpayers a favor by vetoing this bill.
Speaking of illegal, Assembly Bill 1889 seeks to spend hundreds of millions of taxpayer dollars on California’s showcase boondoggle, the High Speed Rail project. The legal problem is that access to the bond proceeds is conditioned on several requirements, including partial funding from federal and private sources, speed requirements and no public subsidies for operating expenses, none of which the High Speed Rail Authority can possibly meet. Again, in the absence of Governor Brown’s veto, litigation over sale of the bonds is a certainty.
From the perspective of fiscal sanity, it is a shame that every two year legislative session in California is an exercise in trying to prevent damage to taxpayers and the economy. Rarely is there anything remotely worthwhile in the hundreds of bills passed by our esteemed political leadership: No pension reform, no education reform, no civil justice reform or tax reform. While other states run clean, effective and efficient governments, the California Legislature resembles a three ring circus more times than not.
Unfortunately, it is not getting better. In the session that just ended, even some of our allies (or so we thought) cast horrible votes in favor of tax increases. As bad as things are, this November’s election could spell disaster for California’s beleaguered taxpayers. Tax hikes at the state level require a two-thirds vote of each house and we now know that a legislator’s proclivity to raise taxes does not necessarily depend on party affiliation. For taxpayer advocates, this is going to make our job of defending ordinary citizens in the Capitol much, much harder.
Jon Coupal is president of the Howard Jarvis Taxpayers Association — California’s largest grass-roots taxpayer organization dedicated to the protection of Proposition 13 and the advancement of taxpayers’ rights.