TAX INCREASES DIED AS RECALL ELECTION LOOMED
Here’s a rundown of the Legislative session that wrapped up in September.
THE GOOD NEWS
Any year the California Legislature is in session is a bad year for taxpayers. Success is often measured not in how many pro-taxpayer bills are passed but how many anti-taxpayer bills we manage to stop. And, in that regard, this year has been better than expected.
The threat of a recall along with projection-busting tax revenue likely had a taming effect. Governor Gavin Newsom even pledged in September 2020 to oppose new taxes if the Legislature sent them his way. The irony was not lost on us that he said this while also endorsing Proposition 15, which would have been the biggest tax increase in California history and a direct attack on Prop. 13, but it was more of an assurance than taxpayers usually get.
Then session started, and undercutting Newsom’s newfound restraint, the Legislature went all in on its usual tax-and-spend ways. But then something wonderful happened: The tax bills we have opposed this session started dying.
Assembly Bill 65, a bill that would create a California Universal Basic Income and proposed to pay for it either through a value-added tax, raising corporate taxes or implementing a tax on services, died in committee. Assembly Bill 310, a bill to create a wealth tax, failed to receive a hearing before deadline. Assembly Bill 1253, which would raise the income tax rate as high as 16.8% for Californians making over $1 million, was held in its first committee. Assembly Bill 1400, a bill to create a single-payer healthcare system and double the state budget in the process, was tabled.
Assembly Bill 71, a bill that would create a $2.4 billion homeless fund through increasing income tax rates on individuals making over $1 million, increasing corporate income taxes and collecting taxes on increases in the value of assets through “marking to market unrealized capital gains and the repeal of stepped-up in basis of inherited assets,” was stripped of most of its taxing language but still stalled on the Assembly floor.
THE BAD NEWS
We’re glass-half-full people here at the Howard Jarvis Taxpayers Association. That’s the only way to stay sane while bill-watching in Crazifornia, but that doesn’t mean we aren’t also realistic. While we were happy with the number of bills that we and our allies managed to stop this year, the fact remains that the Legislature operates on a two-year cycle and a bill that didn’t make it across the finish line this year can come roaring back in the next. So, we can breathe a little easier — but only until January.
OTHER UPDATES
What happened with those other bills I’ve mentioned in previous articles? Well, here we go…
Senate Constitutional Amendment 1 would make “yes” mean “no” and “no” mean “yes” when referendums are placed on the ballot. It was ordered to the “inactive file” on request of the author. That means it has been tabled but could come back.
Senate Constitutional Amendment 3 would allow a governor to be recalled and reelected on the same ballot. It was also ordered to the “inactive file” on request of the author.
Senate Bill 660 would prohibit a person from paying money based on the number of signatures obtained on a state or local initiative. The author of SB 660 claims, without compelling evidence, that the bill’s purpose is to prevent fraud. All SB 660 would do is drive up the cost of getting measures on the ballot. Unfortunately, this bill passed the Legislature and is awaiting the governor’s signature.
Assembly Constitutional Amendment 1 was back again this year. ACA 1 would repeal the two-thirds vote threshold needed to pass local sales and parcel taxes for infrastructure and affordable housing projects. It hasn’t moved this session, but we expect it to be back next year, and we will be ready.
Assembly Constitutional Amendment 9 would have allowed voters to reinstate Proposition 58 and Proposition 193, restoring what Proposition 19 took away: the constitutional exclusion from reassessment when certain property is transferred between parents and children, or grandparents and grandchildren. We sponsored this bill, but the majority in the Legislature was uninterested in talking about the harm they caused by putting Proposition 19 on the ballot. The bill wasn’t even sent to a committee for a hearing.
That’s why we filed the ballot initiative you’ve read about elsewhere in Taxing Times. But to get this initiative on the ballot, we need your help. Find out how at www.hjta.org/RepealTheDeathTax.