Battles Fought to Stop Tax Hikes in CA Legislature

CapitolWhile on the campaign trail prior to the 1988 election, Republican presidential candidate George H.W. Bush uttered the now infamous words, “read my lips, no new taxes.” Of course, this was a pledge he broke, which likely cost him reelection.

The mission of the Howard Jarvis Taxpayers Association is to protect Proposition 13 and to advance taxpayers’ rights, including the right to limited taxation, the right to vote on tax increases and the right of economical, equitable and efficient use of taxpayer dollars.

Unfortunately, this value set is shared by too few politicians in Sacramento.

Because of that, taxpayers rarely are able to obtain meaningful reform in the state Capitol. California’s reputation for high taxes and burdensome regulations is well deserved and taxpayers are usually able to obtain relief only through the powers of direct democracy including initiative, referendum and recall.

While many wish this wasn’t the case, the stark reality is that legislators have voted for eight taxes (six of which became law) since 2012.

In nearly all instances it was Republicans (usually opposed to higher taxes) who joined with tax-and-spend Democrats to provide the final vote for tax increases ranging from car registrations, to gas taxes, to lumber and battery assessments and mattresses.

Thankfully though, no taxes were approved in 2018.

Don’t misunderstand, the tax-and-spend lobby wasn’t taking the year off just because of the upcoming November election. If anything, they were eager to follow up on their three victories last year, which included the infamous gas tax and a tax on recorded documents. Governor Brown made it clear in 2016 that he desired a permanent source of revenue to fund transportation, affordable housing, and clean water programs. He got the first two last year so only the water tax remained.

The fight over the water tax was very contentious. First, no one doubted the importance of having access to clean water, particularly in the Central Valley where decades of neglect and mismanagement of water systems created the problem in the first place. But imposing a dollar-a-month tax on all residential water users in the state to address a local problem made no sense. The cost to fix the problem was estimated to be $120 million of one-time money, which reflects a tiny percentage of California’s General Fund budget. Thankfully, Senate Bill 623 failed before the Legislature’s summer recess in July and taxpayers and their allies, mostly California’s local water agencies, breathed a sigh of relief. …

Click here to read the full article from the Los Angeles Daily News

Bill to Provide Free Healthcare for Adult Illegal Aliens Dies in CA Legislature

MedizinCalifornia Senate Bill 974, which would provide for “full-scope” Medi-Cal health benefits to all illegal aliens, died in the State Assembly after concerns about up to $3 billion in new costs.

“SB-974 Medi-Cal: Immigration Status: Adults” failed quietly in the Assembly’s Appropriation Committee on August 18, despite an effort to save part of the bill by reducing the cost of taxpayer coverage to $200 million by only covering adult illegal aliens 65 years and older.

After the Democrat-controlled California legislature passed “Health for All Kids” (SB 75) in 2016, which extended full Medi-Cal benefits to 200,000 illegal alien children under the age of 19, Senator Ricardo Lara (D-Bell Gardens) promised that he would fight to expand coverage to all adults who would be eligible, regardless of their immigration status.

When Lara introduced SB 974 on April 2, he told Politico that despite President Donald Trump’s crackdown on immigration, California Democrats continue to believe that health care is a civil right for all residents. “California has never waited for the federal government, or for a political climate, to be able to take leadership on a whole host of issues,” he said.

Lara and other California Democrats had been claiming that there would be no added taxpayer burden from SB 974, because California is already paying for poor undocumented adult illegal aliens through emergency rooms across the state.

But the non-partisan California Legislative Analyst’s Office (LAO) examination in May of the financial impacts of SB 974 revealed the cost for extending the coverage to full-scope Medi-Cal coverage for all eligible adult illegal aliens would be $4.74 billion — a $3 billion increase in the taxpayer burden above what is currently provided to illegal aliens through emergency rooms alone. …

Click here to read the full article from Breitbart.com/California

Proposal to Place Restrictions on Plastic Straws Advances in California Legislature

StrawsThe California Senate on Monday approved legislation barring dine-in restaurants from offering plastic straws to customers unless they are requested.

The measure, which goes back to the Assembly for concurrence in amendments, was introduced to address the environmental problems caused by plastic ending up in oceans and rivers.

Sen. Henry Stern (D-Canoga Park) said plastic contamination is showing up in 25% of the fish sold in California.

“Do you want to eat fish with plastic in it?” Stern asked his colleagues. “This is a public health issue.”

The measure exempts fast-food restaurants and other businesses. …

Click here to read the full article from the L.A. Times

California Considers Requiring Ethnic Studies Course to Graduate High School

graduation cap diploma isolated on a white background

As a teacher in Los Angeles county, Jose Lara has fought for years to have ethnic studies taught in high schools across the state. He’s taught the course for 13 years and says he’s seen his students transform by studying their history—whether learning about Cesar Chavez, who led the farmworkers movement in the ’60s, or about Angel Island, a port of entry near San Francisco that limited Chinese immigration in the early 1900s.

“Ethnic studies helps students develop an academic identity,” he said. “It really builds empathy cross-culturally as well so it brings communities that may be different from one another closer together.”

But skeptics say the state couldn’t afford to require such a course. Some critics go even further, insisting the state shouldn’t reinforce “identity politics” and instead should laser-focus on shrinking the academic achievement gap for black and Latino students.

This week the Legislature—which had been considering a bill to make California the first state to require ethnic studies for high school graduation—backed away from creating such a statewide mandate, citing costs estimated to top $400 million. Sponsors settled on a pilot program instead.

The pilot would cover 10 to 15 school districts across the state that will opt in to have ethnic studies as a graduation requirement. Schools would begin applying next year and the program would create the requirement for some students as early as 2022, with schools reporting their findings in 2024.

A state law passed in 2016 already encourages high schools to offer an elective course in ethnic studies, and requires the state to create a model curriculum for the class by 2020. Currently only 1 percent of California’s public high school students take ethnic studies. …

Click here to read the full article from CalMatters

The California Legislature passes the pension buck – again

PensionsIn truth, Sacramento politicians are very dependable. You can depend on them to raise your taxes, pass meaningless resolutions attacking President Trump and hurt the private sector by eliminating workplace arbitration and enacting even more burdensome regulations. And finally, they are very dependable in avoiding the most important threats to California’s financial solvency, especially dealing with unfunded pension liabilities.

Much has been written about California’s unfunded pension crisis. By 2024, normal contribution payments by cities and counties to CalPERS are estimated to total nearly $3 billion, and the unfunded contribution payments are estimated to total $5.5 billion. That shortfall of nearly $3 billion a year will continue to increase unless reforms are enacted – soon.

California’s pension crisis exists in large part due to the very nature of defined-benefit plans. Unlike defined-contribution plans, where the taxpayers’ obligation to each public employee ends with every pay period, defined-benefit plans depend on a projection of future investment returns. And therein lies the problem. California has been horribly wrong in its application of assumed rates of return, leading to hundreds of billions in unfunded liabilities.

And this shortfall is occurring in good economic times when the state of California is relatively flush. A recession will quickly expose this short-sighted thinking, yet the Legislature continues to believe that local municipalities will continue to pass regressive sales tax increases to bail themselves out. Already, 24 cities have sales tax rates at or over 9.5 percent, and more cities are destined to join them.

To read the entire column, please click here.

New California law helps protect voters from hacking

Voting boothSometimes — OK, most of the time — new rules and regulations aimed at putting the brakes on electioneering shenanigans smack of undue limitations on free speech.

Voters must be trusted at least a little bit to be able to sort out the wheat from the chaff when it comes to the politicking aimed at them during campaigns. If all is fair in love and war it is certainly so in politics.

Informed voters have ample opportunities to fact-check what they hear from candidates, and can use their heads and their hearts to suss out whether the people seeking their votes are con artists or people of conviction.

But it has to be said that the overwhelming evidence of Russian government-backed attempts to hack American elections has changed the atmosphere and made calls for new attempts to block such tactics worth at least listening to.

Such interference is certainly not a partisan issue, and that’s likely why only one “no” vote was cast in both houses of the California Legislature against a new law under which journalists, researchers and political campaigns that receive voter data must tell officials if it may have been stolen. …

Click here to read the full article from the Orange County Register

Is this the California Democrats’ way of admitting taxes are too high?

Kevin de LeonIt’s almost like a quiet confession that socialism has been wrong the whole time. In California, the left is fighting to bail out the rich.

Three bills pending in Sacramento would allow the highest-earning Californians to get around the federal tax reform’s new $10,000 limit on the deductibility of state and local taxes.

Two of the bills were authored by state Sen. Kevin de León, D-Los Angeles, the termed-out Senate leader who is running to the left of Dianne Feinstein for the U.S. Senate this November. The other was introduced by Assemblywoman Autumn Burke, D-Inglewood, whose liberal credentials are in evidence in her legislative scorecard ratings — 93 percent from the California Labor Federation (96 percent for “lifetime floor votes,”) and 30 percent from the California Manufacturers and Technology Association.

If these three bills had been introduced by Republicans, Democrats would be on television every day denouncing the bills, the authors, the party, the president, the rich and capitalism generally.

Instead, you probably haven’t heard a word about them. …

Click here to read the full article from the Orange County Register

Taxpayer Victories in an Anti-Taxpayer California Legislature

CA-legislatureRonald Reagan once said, “Government’s view of the economy could be summed up in a few short phrases: If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidize it.” With a record $130 billion budget, we know that California state legislators are adept at all three practices, but none more so than taxes.

Democrats in Sacramento spent 2017 jamming three separate tax and fuel-cost hikes into law. They renewed the cap-and-trade program, continuing a multi-billion-dollar increase in fuel costs that brings in state revenue to fund high-speed rail. They invented a new tax on recorded documents that is supposed to fund affordable housing. And of course the SB 1 gas and car tax increase was said to be needed to fund road repair, even though billions of dollars have been diverted away from maintenance over the last decade. In the midst of an $8 billion surplus, Sacramento was steadily increasing taxes.

But fortunately, 2018 hasn’t been as dreadful for taxpayers as 2017. Here’s a sample of the proposals that, for now, have failed to pass:

Senate Bill 794 would impose a new three percent tax on fireworks at the point of sale. The abuse of illegal fireworks is a matter of statewide concern, and as such, it is totally appropriate to spend existing General Fund revenues on enforcement and safety. Instead, by taxing the sale of fireworks, Sacramento would be hurting all the non-profit organizations that raise a sizable share of their annual revenue from firework stands.

Assembly Bill 2497 would impose an as-yet-undefined tax on guns and ammunition to fund school resource counselors and police officers.

AB 2303 and AB 2560 would create a new tax of up to ten percent on small business vendors who contract out either with private prisons or with the California Department of Corrections.

Senate Bill 623 would establish a precedent-setting tax on residential water use. For now, local water agencies have joined with taxpayer advocates to vigorously fight this levy.

Assembly Bill 2486 would impose a $100 million tax on opioid manufacturers and distributors to fund prevention and treatment programs. Ultimately, this tax will be passed onto consumers, especially to patients who use opioids appropriately to manage pain. As an issue of statewide concern as well as a legitimate public health issue, opioid treatment should also be financed out of the General Fund. …

Click here to read the full article from the Riverside Press-Enterprise

California beats its 2020 goals for cutting greenhouse gases

traffic-los-angelesCalifornia has beaten its self-imposed goals for reducing greenhouse gas emissions, achieving a milestone in the state’s fight against climate change.

The California Air Resources Board announced Wednesday that total statewide carbon emissions fell to 429 million metric tons in 2016, a drop of 12 million tons from the year before. The decline means California met the Legislature’s goal of reducing emissions to 1990 levels, and did so a full four years before the target year of 2020.

Gov. Jerry Brown and other state officials said the results proved the state’s portfolio of anti-carbon laws and regulations is succeeding — and showed California can fight climate change while still enjoying a significant economic boom. They pledged to continue to fight efforts by President Donald Trump’s administration to roll back strict emission rules imposed by the Obama administration.

“This is great news for the health of Californians, the state’s environment and its economy, even as we face the failure of our national leadership to address climate change,” said Air Resources Board Chair Mary Nichols in a prepared statement. …

Click here to read the full article from the Sacramento Bee

Gov. Brown’s May Revise Shows No Need for Gas Tax Increase

The first takeaway from Gov. Jerry Brown’s May Revision of his budget for 2018-19 is that California didn’t need that $5.5 billion yearly gas-tax increase the Legislature passed last year. The proposal shows we have $8 billion in revenues in excess of projections.

In one area I persistently agree with Gov. Brown, “Despite strong fiscal health in the short term, the risks to the long-term health of the state budget continue to mount.” Unfortunately, according to the governor’s budget revision, we have $291 billion in long-term costs and the Legislature has done little to fix the state’s fundamental problems.

In his budget announcement and press conference, Brown emphasized the volatility of tax revenues, especially capital gains-tax revenues, shown in this chart:

moorlach-graphic

And he emphasized we’re overdue for a recession. Of course, he didn’t mention it has been President Trump’s economic policies – tax cuts and regulation reform – that have lifted the national economy above the sub-par performance of the Obama administration.

“How you ride the tiger is what we now face,” he said. “It’s going up, but when it goes down, a lot of these programs will be cut. Life is very giddy at the peaks.” No doubt, he is right. But he also ignored most of the reasons for this volatility even as he pointed out the Rainy Day fund will be filled at $13 billion, though he estimated that an impending economic storm would require resources closer to $60 billion. That’s a budget hole expected in the next recession, which could be $30 billion a year for two years. In such a scenario, the Rainy Day Fund would provide just 22 percent of that potential revenue shortage.

I see a much bigger danger. Taxes are so high in this state. To survive the next recession, companies will flee to states with much lower taxes. Because of the state’s punishing taxes, including then-Gov. Arnold Schwarzenegger’s $13 billion tax increase in 2009, our state’s economy crashed hard. Unemployment soared to double-digits and was exceeded only by the rates in Michigan and Nevada. It may happen again.

The period of rising revenues we’re now enjoying should be used to reduce our already committed liabilities and the overall tax burden.

Of course, having increased taxes last year – not just the gas tax, but the cap-and-trade tax Brown pushed through, estimated at $2.2 billion a year – Brown wasn’t about to suggest cutting taxes. It will be up to the voters to repeal the gas tax this November.

Given that the rising tax revenues won’t be returned to the taxpayers who worked so hard to earn them, the governor at least is proposing spending the money on some true needs. I have worked up a list of options, below, of 15 one-time spending recommendations that should be prioritized. But first let me recognize three of Brown’s proposals that have some overlap to my suggestions:

  • $2 billion for infrastructure: “The proposal will target these funds to the universities, courts, state facilities and flood control. Investments are also proposed for high-priority capital expenditures.”
  • $359 million for homelessness. His proposal notes more funding will begin to flow “from a bond and a fee on real estate transactions” passed last year – another tax that I opposed and don’t believe we need. This money would be a “bridge” until these funds are spent.
  • $312 million for mental health “for enhanced early detection of mental health problems and the education of mental health professionals.” The budget proposal also would put the $2 billion “No Place Like Home” initiative funding on the ballot “to accelerate the delivery of housing projects to serve the mentally ill.”

My proposals include prefunding the $2 billion for No Place Like Home, which will be paid back with the bond proceeds.

I’d also like to help out cities and counties with their pensions by injecting several billion dollars directed to their unfunded liabilities in lieu of taxpayer rebates. In his press conference, Brown unfortunately answered, when that question was raised, “A lot of cities signed up for pensions they can’t afford. The state can’t step into the shoes of the cities and counties. They’re going to have to handle that.”

Again, he’s largely right. And he’s actually putting his legal resources and political chits behind the overturning of the so-called “California Rule,” which ratchets up pension costs with no ability for governments to correct costs at the front end, leading them to fiscal ruin at the back end.

Because of that, we’ve got cities and counties laying off police and fire simply because their pension costs are so high. And the cities and counties can’t raise their tax base more than 2 cents on the sales tax. Current leaders in our cities and counties weren’t the ones who spiked pensions decades ago, but the California Legislature made it really easy.

Sacramento is renowned for taking funds from cities and counties during recessions. Giving something back to them would be a noble thing to do.

The state also has a backlog of rape kits. Not only is that unfair to the victims, but after catching the Golden State Killer, how many more predators could we catch and prosecute?

We also need to harden power lines across the state. If this state wants to emphasize electric cars, we’re going to be sending a whole lot more electricity around, which means more wildfires unless the power lines are put underground.

Compared to his January proposal, the governor’s May Revise only tinkered with education funding. But we could use more funding for career technical education. A lot of kids don’t want to go to college, but could have successful careers in the trades or other vocations. They should be afforded the training opportunities just as much as those we send to our elite institutions.

Finally, this budget largely is a stopgap getting the governor beyond his tenure in office. He said he wanted to leave it in good shape for his successor. But so much more needs to be done, especially in improving the state’s harsh anti-business fiscal policies, shoring up pensions, fixing long-neglected infrastructure and reducing the housing and homelessness crises.

Below is a list of my 15 policy proposals for spending the $8 billion in excess revenues. It is largely in priority order. And if the state wins the litigation for the No Place Like Home bond dollars, or it is approved by the voters on the ballot in November, then that money could be cycled into any of the remaining priorities.

Priority Description Amount
1 No Place Like Home Prefunding of approved bonding $2,000,000,000
2 Provide funding to 482 cities to be appropriated to their pension liabilities $482,000,000
3 Provide funding to 58 counties to be appropriated to their pension liabilities $580,000,000
4 Provide matching funds for city pension liabilities $964,000,000
5 Provide matching funds for county pension liabilities $1,160,000,000
6 Fully fund bringing current the Rape Kit testing backlog $12,500,000
7 Fund Armed Prohibited Persons System (APPS) gun holder backlog $12,500,000
8 Hardening of electric power lines around state $1,168,000,000
9 Oroville Dam state water project conveyance levee repairs $100,000,000
10 Temperance Flat construction $250,000,000
11 Refund the Fire Tax $471,000,000
12 Continue Career Technical Education Funding at prior level $200,000,000
13 Renters’ Tax Credit increase $300,000,000
14 Opioid treatment and prevention task force $100,000,000
15 Water Tax off-set $200,000,000
$8,000,000,000

This article was originally published by the Flash Report