2016 Ballot Measures: This Means War

November 4, 2015 By Loren Kaye Leave a Comment

Did anyone notice the guerrilla war that broke out last week?

No, it wasn’t a coup d’etat in some tropical backwater. In fact, the first shots were fired on the website of the state’s chief law enforcement officer.

The Ballot Wars have begun again, more or less on schedule.

To no-one’s surprise, the California Teacher’s Association last month proposed a ballot initiative to re-enact the Proposition 30 income tax hikes for another 12 years (albeit with a twist to exempt the new revenues from the Proposition 2 rainy day reserve). The CTA measure continues to deposit the new taxes into the state’s General Fund, and most of the money will be spent on public schools.

Voters approved the original version of this proposal as Proposition 30 in 2012, by a margin of 55% to 45%.

Somewhat to the surprise of the political cognoscenti, a coalition of California hospitals and the hospital workers union soon thereafter proposed an initiative that would go one better: increase income taxes even higher for even longer, and distribute the money to schools and to health care programs.

Uh-oh. Two measures on the same ballot competing for the same pot of dough? Mobilizing opposition and confusing voters? Facing a threat to their hegemony, the teachers union declared, “This means war!”

Actually, that’s my rough translation of their actions last week. Lawyers for CTA submitted three ballot measure proposals that directly attack California hospitals, hitting executive pay, tax exempt status, and government reimbursements.

If this was a naval engagement, these ballot proposals were three shots across the bow of the Good Ship CaliforniaHospital.

The next move in this engagement is on the health care side. But wait … there’s more.

Earlier this year a group of southern California nonprofit charities launched a bid to raise statewide property taxes by billions to pay for a variety of health care, early education and economic development programs. Though not itself a split roll property tax, the increases would certainly occupy the political space for any current or future property tax hikes. The split roll is another favorite pony in the CTA’s stable.

If I was a sponsor of the “Lifting Children and Families Out of Poverty Act,” I’d be on the lookout for a fusillade from the teachers’ advance guard.

 is president of the California Foundation for Commerce and Education

Originally published by Fox and Hounds Daily

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Ballot Initiative Amended to Target State Rainy Day Fund

October 21, 2015 By Loren Kaye 2 Comments

Sponsors of an extension of the Proposition 30 top income tax rates amended their ballot initiative this week, slightly parting the curtain on the skirmishes yet to come.

Recently I wrote of a clever provision buried in the original proposal. Sponsors aim to continue the tax hikes on the upper incomes for another dozen years. But they also slipped in a clause prohibiting the deposit of any revenues from these taxes into the new rainy day reserve. In other words, the Legislature can spend all the money from billions in new taxes as if those revenues are locked in stone and never subject to the business cycle.

The upshot would be to undermine the newly-adopted budget cushion, notably touted by Gov. Brown in 2014, and risk deep spending cuts or even higher taxes when the state suffers its next, inevitable downturn.

The newly-amended version of the measure tweaks this provision – clarifying that it would not take effect until 2019, the year the Proposition 30 taxes would have otherwise expired. Without that change, the measure would likely have been interpreted to prohibit deposit of surplus revenues from the current Prop. 30 taxes into the rainy day reserve.

Why make this change? The answer may be just two words: Gov. Brown. Undermining the rainy day reserve as early as 2016 might have brought down his wrath on the ballot proposal (the governor has not yet stated a position on the measure). Poking the governor in the nose is usually bad politics. Proponents – mainly the California Teachers Association – might also calculate the governor may be less motivated to defend his rainy day reserve if the blade is shivved after he leaves office in 2019.

Originally published by Fox and Hounds Daily

By  president of the California Foundation for Commerce and Education

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CA Legislature Debates How to Fund Road Repair

October 19, 2015 By Joel Fox 7 Comments

LA-Freeway-Xchange-110-105There is consensus that California’s road and highways must be fixed. There is no consensus how the fix should be paid for. The Special Session legislative meeting Friday was called a first step in finding agreement to the funding problem. The Democrats see tax increases as part of the mix; Republicans want to prioritize the use of existing dollars for the roads. The tricky part of compromise is the push for any taxes in the context of so many other tax increases that could be presented to voters.

Governor Jerry Brown has proposed a yearly funding package for the roads of $3.6 billion. The package includes a 6-cent gasoline tax increase, an 11-cent diesel tax increase, both tied to inflation, a $65 car fee and cap-and-trade funds. His proposal is little more than half what legislative Democrats and a coalition of business, labor and construction groups have called for.

Republican proposals also include cap-and-trade money. In this case, the money would be used directly for the roads. The governor’s plan would funnel cap-and-trade dollars to bus lanes and rail. The Republicans also would trim CalTrans staff, direct weight fees and other transportation monies exclusively for the roads and employee other methods without raising taxes.

Not only have the Republicans expressed opposition to tax increases but there is no certainty that all Democratic legislators would support a tax increase.

The informal group of Moderate Democrats who banned together to stop the provision in climate change bill SB 350 to cut petroleum use in half over 15 years objected that their constituents would pay a higher cost for commuting. Cap-and-trade that now covers gasoline refining and has raised the cost of gasoline about 10-cents a gallon. Additional taxes on gasoline would adversely affect many of their constituents, the moderate Democrats believe.

The governor wants the funding package to move through the legislature quickly for strategic reasons.

For one thing, the plunging cost of gasoline may undermine the argument that the gas tax increase will hurt low-income drivers. Even a tax increase on gas would leave the cost of a gallon of gasoline well below recent price levels.

If debate lingers until next year, it becomes an issue for candidates running for office in an election year. Remember, a car fee increase was a major reason for a governor’s recall just a decade ago.

If a package of gasoline taxes and car fees should end up on the ballot it would probably get a cold stare from the voters. Likely there will be a number of tax increases on the November ballot. An extension of Proposition 30, a cigarette tax, perhaps a property tax, maybe others could be on that ballot. A roads funding package will not look so good in the context of all these tax increase proposals.

The roads and highways are the veins and arteries that pump life into our economic system. They must be cared for to prevent the economic system from getting a form of man-made sclerosis. The governor and legislators during the Special Session are walking a tightrope to balance the need to improve the roads and highways with voters being turned-off by a slew of tax proposals.

Originally published by Fox and Hounds Daily

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Poll: Will Voters Support Tax Proposals on 2016 Ballot?

October 1, 2015 By Joel Fox 1 Comment

taxesIn the shadow of my commentary yesterday on the possible tax measures on the 2016 ballot comes the Public Policy Institute of California poll that takes the standing of many of the potential tax initiatives. This snapshot in time indicates supporters of the tax increases have a lot of work to do to convince the public to vote for them.

But the way the questions were asked must be considered when weighing the results.

The idea of extending Proposition 30 is becoming more practical than theoretical with the submission of two separate ballot measures to achieve that goal. One measure, filed chiefly by the California Teachers Association, would extend Prop. 30 for 12 years. The second measure filed by the California Hospitals Association, a health care union and a children’s advocacy group, would make the Prop. 30 taxes permanent.

The voters appear divided on extending Prop. 30 with 49% in favor of extension and 46% opposed. However, those favoring the extension drop to 32% if the taxes are made permanent.

One odd result from the poll was the great support for the Prop. 30 extension in the San Francisco Bay Area (63%) and much less support in the Central Valley (50%); odd, because this tax is centered on the wealthy, those with incomes of $250,000 and more. There are many more high-end taxpayers in the Bay Area than the Central Valley.

However, the way the question was asked may have something to do with this disparity. The question described the Proposition 30 tax that exists today. Poll respondents were asked if the taxes on incomes over $250,000 and the quarter cent sales tax should be extended. But, the quarter cent sales tax portion of the Prop. 30 tax measure is not included in either of the extension plans that were filed.

Could Central Valley voters have focused on the sales tax piece and would their answers be different if they knew the extension only affected high-end income taxpayers?

Once again, PPIC asked about splitting the property tax roll under Proposition 13 treating commercial property differently than residential property by taxing commercial property according to current market value. Likely voters approved of the idea by 55% with 39% opposed.

But as stated here many times before, this basic question doesn’t inform potential voters of consequences related to this issue. There was no effort to deal with either the potential positives or negatives of changing the property tax system. Those issues will certainly be aired during an expensive campaign over a split roll and undoubtedly would lead to different results than the poll currently reflects.

Two other taxes that are being discussed received quite different results. An oil extraction tax found 49% support with likely voters; a cigarette tax was supported by 66% of likely voters.

There could be a lot of money spent in a campaign opposed to these taxes and a fair amount of change in support. However, looking at all the tax measures at this moment in time, if the old rule were applied that an initiative needs to have at least 60% support in early polls to have a fighting chance at passing, then only the cigarette tax looks possible at this time.

Of course, if the ballot is full of tax proposals the old rules may not apply.

Originally published by Fox and Hounds Daily

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Prop. 30 Tax Hike Extension Will Likely Appear on 2016 Ballot

September 22, 2015 By Jon Coupal 6 Comments

TaxesA coalition of government employee unions has filed an initiative that would extend the temporary income tax hikes that were contained in Proposition 30 and approved by voters in 2012.

If this seems like, in the immortal words of Yogi Berra, “déjà vu all over again,” it’s not your imagination. This is just the tax raisers running their favorite play from “The Book of Dirty Tricks on Taxpayers.”  First they persuade taxpayers to accept a tax by marketing it as temporary. Once taxpayers have become inured to paying it, the tax raisers move in to extend it or make it permanent.

Big spending politicians and their allied government employee unions count on taxpayers having short memories to make this scam work. For example, look at the 1.25 percent sales tax increase political elites pushed in 1991 to deal with a budget gap. A half-cent was supposed to be temporary but when it came time to expire the Legislature placed it on the ballot promoting it as necessary for “public safety.” Voters — by then used to paying the higher tax — swallowed the hook and we continue to pay the entire 1.25 percent increase initiated almost twenty-five years ago.

There is a saying in football that if a play works once, keep running it until the opposition shows they can stop it. In 2009, the Legislature achieved the two-thirds vote to impose two year increases in state sales and income taxes. Immediately they placed on the ballot, in a special election, an extension of these taxes for two additional years. Voters, still shocked by being hit with stiff tax increases, were having none of it and rejected the extension by almost two to one.

Realizing they had not waited long enough to allow taxpayers to become accustomed to higher taxes, government employee unions, working with Gov. Brown returned to the ballot in 2012 with another “temporary” increase in sales and income taxes in the form of Proposition 30. As the primary spokesman for the tax, the governor traveled the state repeating the mantra, “It’s for the schools, its temporary.” Voters were persuaded to approve another “temporary” tax increase. Now those who benefit the most from higher revenues – California has the highest-paid state and local public employees in all 50 states according to the Department of Labor – are back seeking to extend taxes, that were scheduled to expire in 2019, for another dozen years.

If the Proposition 30 extension, now being called the School Funding and Budget Stability Act, appears on the ballot, it has a good chance to pass. This is because the burden will fall on a minority, upper income taxpayers, and many voters will overlook  that high taxes will cause some of our most successful residents to leave for more tax-friendly states, meaning that they will no longer pay any taxes to California.

The most important thing for voters to remember, however, is that if they agree to any temporary tax, it may as well be considered as permanent. As for the Proposition 30 temporary tax, it likely will join the ranks of other “temporary” taxes that seem never to disappear. Among those is the federal telephone tax established to pay for the Spanish American War, which remained in place for 108 years after the war ended.

Originally published by HTJA.org

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. 
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Top 5 Taxes You May See on the 2016 Ballot

August 14, 2015 By Joel Fox 1 Comment

http://www.dreamstime.com/-image18514272In June 2014, I wrote a column forecasting the tax increase measures that might be on the November 2016 ballot given the conversations going on at the time. I updated the list in March of this year. It’s time for another update, this one prompted by an answer to a question Senate President Pro Tem Kevin de León gave to Comstock’s Magazine.

The pro tem was asked where he stood on the change to Proposition 13 to separate commercial property from residential property. De León responded that he had no position on the plan at present but added: “I do think that revenue enhancement measures deserve a very serious debate, whether it’s a continuance or some variance of Proposition 30 or some other proposal.”

While the legislature gets together next week with the opportunity to have that debate, most likely any tax measure on the 2016 ballot will come via the initiative process.

As I wrote previously, situations and strategies change. What’s being discussed most heavily today is not necessarily what will be pushed to the ballot for voters to decide in 2016.

  • OIL SEVERANCE TAX

As reported previously, whether the oil severance tax initiative moves forward depends on one man – hedge fund billionaire and NextGen president, Tom Steyer. Recently, Steyer took the focus away from the oil severance tax and held a press conference supporting a bill for more transparency about oil company revenues. During the press conference, he suggested if the legislature did not act on a transparency bill he may take one to the ballot via initiative. While Steyer certainly has the ability to attempt more than one initiative at the same time, history shows that doesn’t always work out so well. (See John Van de Kamp 1990.) With the potential of other tax measures on the ballot, there seems to be less emphasis moving forward with the oil severance tax. It barely hangs on the list at number 5.

  • SERVICE TAXES

While Senator Bob Hertzberg’s plan was mentioned in previous columns, it was never ranked. However, as Hertzberg works to build support for his plan, which he says will tie the tax system more closely to the current state economy, the idea of many different taxes potentially appearing on the ballot may present an opening for Hertzberg. He could argue that his answer to California’s tax system flaws is a better overall fix than other proposals. And, remember, he also has potential financial support from Nicolas Berggreun’s Think Long Committee.

  • SPLIT ROLL

The grassroots/public union effort to push a split roll is still ongoing. Whether the big money is ready to commit to this approach is uncertain. Since the last rankings a second property tax surcharge on all properties that are assessed on the property tax rolls at $3 million and more has been filed. While this measure doesn’t seem to have the support to move into the top 5, it complicates the split roll position. Some have suggested that the split roll is being pushed to convince the school establishment that any tax measure that reaches the ballot should provide for more than schools. Whether for leverage or an earnest effort to achieve a split roll property tax, there is a decent chance the measure will be filed.

  • CIGARETTE TAX

The cigarette tax holds in the second position although it is clawing to gain the top spot. An initiative has already been filed. However, there will be a lot of talk in the Special Session on Medi-Cal reform perhaps including a cigarette tax increase to help fill the Medi-Cal funding hole. If the legislative session ends with no cigarette tax increase, the chance that such a tax will make the ballot probably jump this one to number one.

  • EXTENSION OF PROPOSITION 30

Extending or slightly changing Prop. 30 and continuing it holds the top spot because many supporters of a tax increase believe this type of measure may be the easiest one to pass. However, when the Public Policy Institute of California asked Likely Voters in May if they supported the extension of Proposition 30, 46 percent said yes, 30 percent said no. Not strong numbers. But all you need to know about a Prop 30 extension remaining the most likely tax measure you’ll see on the November 2016 ballot is the answer Senator de León gave above. Instead of talking about a change to Prop. 13 when questioned, he specifically cited the possibility of continuing Prop. 30. At this time it remains number 1.

Follow Joel Fox on Twitter @1JoelFox1

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Attack on Prop 13 Faces Long Odds

June 11, 2015 By Joel Fox 2 Comments

The original Proposition 13 was four paragraphs long fitting on one side of a piece of paper. SCA 5, the measure to change Proposition 13 introduced by Senators Loni Hancock and Holly Mitchell yesterday intended to increase taxes on business property is 30 pages long. Without going into the details of the proposed changes, suffice it to say the groups behind the proposal, liberal organizations and public employee unions, want more tax dollars to spend. That is despite the fact that the state treasury is enjoying a big boost in revenue.

The rhetoric of “fairness” spoken by supporters at the press conference announcing the bill does not match the impact of what the proposed law intends to do. Sen. Mitchell said at the press conference, “What we are looking to do is to take those few that are benefitting from under-assessment and bring them in line with everyone else.” 

The measure would not raise taxes on a “few” but re-assess all business property annually so that they can pay the highest property tax possible.

Most of the news reports following the press conference that announced the filing of the bill spoke of “long odds” and “high hurdles” to get the bill through the legislature. Since the proposal is a constitutional amendment, it requires a two thirds vote to be placed on the ballot. Many news articles noted that there are no Republican votes for the measure.

A more interesting question is how many Democratic legislators will vote for SCA 5? I can imagine right now there are a number of political consultants drawing up campaign mailers that say: Candidate X voted to change Proposition 13.

While there seems little expectation that this proposal will get through the legislature, it is anticipated that a split roll could become an initiative measure.

The recent PPIC poll question on a split roll found only 50-percent of the voters support the idea. That mark was recorded against a simple question asking if commercial property should pay taxes based on full market value. There were no arguments offered to the respondents about possible consequences such as thousands of lost jobs, a stifling of economic growth, and devaluation of commercial property when new property taxes are capitalized into the value of the property.

A multi-million dollar campaign pointing out the negative consequences of a split roll is sure to take shape if the split roll makes the ballot.

Curiously, there is one good feature about the bill — but it was added as a form of bait to draw off criticism about the effects a split roll would have on small businesses.

In an effort to placate small businesses, a feature written into the law offers all businesses a $500,000 exemption on tangible personal property used by businesses. Frankly, personal property taxes should be done away with for businesses just as property taxes for residential personal property was eliminated years ago.

However, in SCA 5 the authors would substitute for the personal property exemption an increased subjective property assessment on structures and land with all the uncertainties of annual re-assessments that drove taxpayers to pass Proposition 13 in the first place.

Could there be another reason for the pursuit of the split roll beside the tax revenue increase to pay for services, salaries and pensions?

The push for the split roll comes at a time when there are serious discussions in certain circles about how to keep the revenue flowing from the Proposition 30 tax increase that is due to expire over the next few years.

Some might see a split roll tax increase as a substitute for the Prop 30 taxes. Pushing a split roll measure might also be a move to get all the public unions to agree on a single tax measure in which they all benefit.

It is generally perceived that Prop 30 money has been good for the schools and the teachers unions. The Service Employees International Union clearly has its fingerprints all over the split roll movement. Will this measure force the teachers unions to deal with the non-education folks on a Prop 30 extension so that two tax measures are not on the same ballot?

Or are the unions in agreement — desiring to push two major tax increases and making everyone in their camps happy?

While making the taxpayers furious.

Interesting times ahead.

Follow Joel Fox on Twitter @1JoelFox1

Originally published by Fox and Hounds Daily

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Top 5 Taxes You May See on 2016 Ballot

March 13, 2015 By Joel Fox 1 Comment

Last June, I wrote a column forecasting from least likely to most likely the tax increase measures that might be on the November 2016 ballot given the conversations going on then.

Time for an update.

As is nearly always the case in the political world, situations and strategies change. What’s being discussed most heavily today is not necessarily what will be pushed to the ballot for voters to decide in 2016.

By measuring fact, rumor and innuendo I’ll offer my reading of the top five tax possibilities for the November 2016 ballot.

First, a word about those that did not make the list this time. Previously, a soda tax was on the list but that possibility seems to have faded for the moment. Instead, advocates are considering labeling sodas with more information about the sugar content.

There is a constant buzz about restructuring the entire tax system and that has been heightened by the introduction of a bill by Senator Bob Hertzberg that would re-do the tax system, cut some tax rates, and introduce a service tax. Hertzberg hasn’t developed the plan in full as yet. Both the left and the right have attacked the idea. However, he also is working closely with the Think Long Committee, which has the resources to qualify a measure for the ballot. As of now, the idea is not ready for consideration.

To the list, then:

  1. OIL SEVERANCE TAX. Previous Ranking #3.

Whether the oil severance tax initiative moves forward depends on one man – hedge fund billionaire Tom Steyer. He said he would rather work through the legislative process but the bill would unlikely pass the legislature. Steyer also is said to be interested in promoting an initiative that would require a two-thirds vote in local communities to approve fracking for oil. While he has the resources to do more than one measure, the odds are he would focus on just one, if any.

  1. SURPLUS! NO NEW TAXES. Previous ranking: Unranked

Okay, this is obviously not a tax increase measure. However, with the recent announcement of one billion unexpected dollars in the state treasury many experts predict that the state budget will have a surplus of two billion dollars or more. Under such conditions, some observers suggest new taxes won’t fly with the voters, so why try? A lot will depend on the fiscal situation heading into next year’s budget, but even if the economy holds steady and the budget is in good shape, it is hard to imagine there won’t be at least one tax increase measure on next year’s ballot. Still, the chances are more likely today than they were a year ago that a surplus could stall the tax increase movement.

  1. SPLIT ROLL. Previous ranking: #2

While there is still an on-going grassroots effort to promote a split roll property tax requiring business property to be taxed on a different basis than residential property, big players have yet to commit to funding such an initiative. Certainly, there would be big money spent to oppose such a measure so both sides are considering the issue carefully. The school establishment would have to step up to support a split roll and consider how a property tax on the same ballot with an extension of the Prop 30 taxes will play. Also, a school bond measure may be on the ballot attracting attention from the school folks. A couple of sources tell me a little air has come out of the split roll effort, so while it certainly hasn’t gone away, it drops to #3.

  1. CIGARETTE TAX: Previous ranking: #4

The possibility of a cigarette tax on the ballot has moved up simply because some of the items in front of it moved down in the rankings. There really hasn’t been a change in the emphasis of a cigarette tax by proponents. They will try the legislative route but if unsuccessful will consider going to the ballot where they were very close to passing a measure the last time they tried. No Lance Armstrong on their side this time, which is a good thing, although they’ll miss the money his group donated.

  1. EXTENSION OF PROPOSITION 30. Previous ranking: #1

No change here. Many insiders believe Proposition 30 would be the easiest tax to pass since it is already levied. Especially if the sales tax piece is removed, many voters would not directly feel the tax’s pinch. All the spending interests may not be happy since schools get most of the money, but extending Prop 30 still stands as the most likely tax measure to be on the ballot. The biggest question: What will Governor Brown say about continuing the “temporary tax?”

Joel Fox is Editor of Fox & Hounds and President of the Small Business Action Committee

Follow Joel Fox on Twitter @1JoelFox1

Originally published by Fox and Hounds Daily

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CA Can Allow Prop. 30 to Expire

February 18, 2015 By James V. Lacy 3 Comments

When Gov. Jerry Brown kicked off the campaign for Proposition 30, his tax hike solution to California’s spending problems, he predicted a doomsday scenario if the tax measure failed.

“What do we do?” Brown wondered in the summer of 2012. “Do we dismantle the schools? Do we end the Highway Patrol? Do we open the prison doors?”

California voters, after $40 million of fear-mongering by Brown and his union allies, finally relented. But it turns out the quarter-cent increase in the state sales tax and four new income tax brackets weren’t needed after all.

So says the venerable Standard & Poor’s Ratings Services, which recently published its detailed analysis of the state’s financial picture.

“Would California still be in the red without the extra revenue from temporary tax increases made under Proposition 30?” Gabe Petek, the lead California analyst for Standard & Poor’s Ratings Services, recently asked. “Perhaps it’s counterintuitive, but the answer is no.”

Standard and Poor’s came to that conclusion by comparing current tax revenue with multi-year projections from the Legislative Analyst’s Office published in 2010, two years prior to Prop. 30. At that time, the state’s independent number-crunchers expected a structural deficit of $20.2 billion this year.

So, what’s changed? Expenditures are 15 percent below that five-year old LAO forecast, while revenues are up only 2 percent.

“Contrary to popular belief, elimination of prior deficits was mostly accomplished through lower spending, not higher revenues,” S&P concludes.

Another misconception cleared up by the rating agency: all of that additional money hasn’t gone to schools or public safety as promised. Eight percent of the Prop. 30 tax revenue collected to date has gone “toward repaying the state’s wall of debt.” This year, we’ll pay $7.87 billion in Prop. 30 taxes, nearly all of which will be spent paying off more debt.

Don’t get me wrong: debt repayment is a good thing. It’s helped take the state’s bond rating from negative in July 2011 to its current A-plus rating. However, when there’s a misunderstanding about where Prop. 30 funds are going, it ultimately paves the way for a tax extension or new tax increases.

The respected Dan Walters, a columnist for the Sacramento Bee, has written essentially the same thing that Standard & Poors has. His observation is that an improving economy has helped raise tax revenues and that Proposition 30 may have not been necessary. He has also written that some Proposition 30 funds have not always been spent as intended, going instead to prisons, public employee pay and welfare.

Last May, State Senator Mark Leno, a liberal Democrat from San Francisco, openly agonized that taxpayers might realize they were duped. “If we have $10 billion in reserve, how do we go to the voters in two or three years and say we have to extend their tax increase?” he said to a rally of his big government supporters.

A month into the new legislative session, we’ve already seen a slew of new tax proposals. Assembly Speaker Toni Atkins (D-San Diego) recently proposed a $2 billion road tax. Sen. Bob Hertzberg (D-Van Nuys) wants a $10 billion sales tax on services. Billionaire climate change activist Tom Steyer plans to push a new oil tax through the state legislature, and if that doesn’t work, he’ll qualify the measure for the 2016 ballot.

New taxes aren’t needed. Standard & Poor’s believes that “the state may be able to oversee the phase-out of its temporary taxes, and thus $6 billion to $8 billion in annual revenue, with almost no perceptible fiscal pressure.” New taxes could also throw us back into deficits. Under Proposition 98, any new taxes automatically mandate new spending commitments, which remain on the books even if the economy weakens or the stock market corrects.

New taxes aren’t California’s problem – spending is.  As long as spending remains under control, the state can allow Prop. 30 to expire and avoid another revenue cliff.

James V. Lacy is the author of “Taxifornia” and a frequent guest on Fox Business News Channel’s Varney & Company.

Originally published in Breitbart California.

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Will Prop. 30 Be Extended?

February 1, 2015 By Joel Fox 7 Comments

Governor Jerry Brown’s job approval ratings are sky high in the recent Public Policy Institute of California Poll, which means the fate of Prop 30 could hang on a word from the governor. Brown continues to remind those who want to see Proposition 30 extended or made permanent that he campaigned for a temporarytax increase.

However, supporters of extending the tax will look at the PPIC poll and think they might get the voters on their side. The poll asked if respondents would like to see the tax extended beyond its 2018 expiration date. No length of extension was offered in the poll question. 52% of likely voters favored extension while 43% opposed. The crucial Independent voters in close election contests narrowly supported the idea of an extension, 49% to 45%.

The poll showed 61% of all adults and 58% of likely voters think Jerry Brown is doing a good job. That is a high mark for his second go-around as governor. Not surprisingly, Brown’s approval among Democrats sits at 82%. However, his job performance also gets the nod from 30% of Republicans and 56% of Independents.

Will approval of Brown’s job performance play a role when voters and legislators consider the future of Prop 30?

According to PPIC president and pollster Mark Baldassare, “Of those who favor a Proposition 30 extension, 74 percent approve of Brown as governor, so the two poll responses are highly related. Given his record-high approval numbers at the start of an historic fourth term as governor, Brown’s views on a wide range of fiscal and policy issues including a Proposition 30 tax extension will have an impact on voters’ preferences.”

If Brown insists on repeating that the Prop 30 taxes are temporary and that the budget can be managed without additional taxes, the voters who like the way he is steering the ship likely would sink any attempt to extend Proposition 30.

Brown will also have to weigh if abandoning his oft-stated temporary tax pledge will undercut his popularity.

However, as I noted previously, Brown might look on an extension of the Prop 30 taxes with a new end date as still a temporary tax therefore keeping his campaign promise while the tax is extended.

Alternatively, if a Proposition 30 extension is put on the ballot via the initiative process, Brown may fall back on his position that the people have to decide any tax increase and he will step back and leave the decision up to the voters.

For now, however, considering the poll numbers, the future of Prop 30 seems to rest on how Gov. Brown wants to employ his popularity.

Originally published on Fox and Hounds Daily

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