Legislative Report Card: Who Passes; Who Fails On Taxes?

Photo courtesy Franco Folini, flickr

Photo courtesy Franco Folini, flickr

Like inattentive students who dread having their parents see their unsatisfactory grades, most members of the California Legislature would just as soon not have their constituents see the Howard Jarvis Taxpayers Association Legislative Report Card documenting their votes on issues important to taxpayers.

Of the 120 members of the Legislature, 73 received a grade of ?F? while only 36 earned an ?A? grade.

The Report Card is a non-partisan tool for citizen taxpayers to hold legislators accountable based on actual legislative votes. It was Will Rogers who said, ?If you ever injected truth into politics you have no politics.? While a satirist is allowed to paint with a broad brush, there is still more than a grain of truth here. Many in the political class dishonestly attempt to present themselves as standing for the interests of average folks. They pay lip service to low and moderate income Californians, while voting to make getting to work more expensive by increasing the already tops in the nation gasoline tax. They claim to be supporters of homeownership, but support measures that would increase the tax burden on property owners.

In the legislative session that ended last month, Governor Brown signed 808 bills. These bills create thousands of pages of new laws, spanning across dozens of code sections. The HJTA Legislative Report Card pulls the curtain back and identifies for taxpayers legislation that harms their interests, bills that otherwise do not receive much public attention. A prime example is Senate Bill 705 (Hill) a bill that was completely amended in the last month of session that allows for San Mateo and Monterey counties to pursue increased sales taxes beyond those authorized in current law.

The Report Card also rewards lawmakers who supported legislation that helps taxpayers like Assembly Bill 809 (Obernolte), an HJTA sponsored proposal that places additional information regarding tax increases in the ballot for all voters to see.

Votes on sixteen bills were used to score legislators. These reflect a range of policy issues including new tax and regulatory burdens, and attacks on the initiative process that would make it more difficult for taxpayers to have their voices heard.

With over a quarter of the members of the Legislature new to Sacramento politics, the HJTA Report Card provides an early indication as to who will be faithful to the interests of taxpayers. While grades have improved slightly over last year, it is clear that this new legislative class has started off by falling well short of taxpayer expectations.

Eight lawmakers deserve credit for a perfect score. Members of the Assembly receiving 100 percent are Frank Bigelow, Brian Jones, Beth Gaines, Tom Lackey, Chad Mayes, Jay Obernolte, and Jim Patterson. Senator Mike Morrell also received a perfect score.

To view the 2015 Legislative Report Card, and find which representatives are proud of their grades and which ones hope no one notices, please go to www.hjta.org where it can be found under ?Hot Topics.? And remember, a functioning democracy depends on an informed electorate.

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.

Excessive Traffic Tickets: Hurting the Middle Class Again?

Police carEven good drivers get an occasional ticket. But in the last several years, there has been a perverse incentive for eagle-eyed enforcement officers to issue even more citations. ?We are now discovering that California drivers are a goldmine for government by the imposition of traffic fines that are absurdly excessive.As recently as 2005, a ticket for drivers going from one to 15 mph over the speed limit in California would cost $99. This would include a base fine of $25 and additional charges of $74 to be shared with the state, the county, the courts and other programs. ?Only nine years later the same ticket would include a base fine of $35 and another $203 to be divided among the usual suspects for a total of $238.

Currently, a ticket with a fine of $120 will cost the motorist about $627 by the time all the additional charges are added. ? These penalty assessments are running more than four times the base fine.

Years ago, the idea behind traffic fines was to encourage safe driving by penalizing those who put themselves and others in danger. ?In 1953, the first penalty assessment was established at the rate of one dollar for every $20 in base fine. ?In those days the proceeds of the additional charge went to fund driver education in schools. ?Today, the additional charges go to pay for state and local programs and to build and renovate courthouses.

No one seems to know exactly how much government rakes in from fines and the penalty assessments, but a study dating back to 2006, when the charges were much smaller, estimated the revenue at over a half billion dollars a year.

State Senator Robert Hertzberg has introduced legislation to help those who have lost drivers licenses due to failure to pay non-public safety related tickets. ?Concerned that local jurisdictions have piled on fees for minor traffic violations to make up for lost revenue during the recession, he wants to match these drivers up with an amnesty program proposed by Jerry Brown that would reduce fines by 50 percent for eligible participants.

The problem is that both Hertzberg and Brown, while trying to help low income drivers, are ignoring the elephant in the room. ?That is the millions of average folks for whom a traffic ticket can result in having to forgo almost a week?s pay. ?Those in public office do not want to stand up for the typical motorists because they are not about to give up the income these punitive fines provide.

There?s no reason for these grossly inflated fines ? fines that far exceed what is needed to deter unsafe driving ? other than to provide the politicians with more spending money.

Excessive traffic fines are yet another example of the war being waged against the middle class by the political elite who have already burdened California drivers with high gas taxes and registration fees. ?For the rich, a $500 traffic fine is no big deal. ?For a working family, it may mean skipping a few meals.

So while the majority party in California loves to talk about how much they look out for the middle class, the reality is that they really don?t care.

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.

And The Political Chutzpah Award Goes To …

If an award were given for political chutzpah, members of the California Legislature would win hands down.

An example of chutzpah ? a word whose synonyms include ?insolence,? ?cheek? and ?gall? ? would be an expensive restaurant adding a 25 percent tip to the bill after providing poor and insulting service.

Don?t blame California?s beleaguered taxpayers if they feel like diners at the restaurant in the above example. ?Our state?s high tax rates in almost every category have resulted in Californians laboring under the second highest tax burden in all 50 states.

In return for these high taxes, roads are crumbling, schools are underperforming and services in general are well below par. ?Money that could go to improving government services is syphoned off to support the highest paid state and local government employees in the nation and to provide them pensions in retirement that are as much as five times higher than what similar private sector workers can expect from Social Security.

Even though revenue to state government is surpassing expectations ? State Controller Betty Yee has announced that February receipts were $6.6 billion, exceeding estimates by $1 billion, or 18.3 percent ? Sacramento lawmakers are demanding more ? much more.

State Sen. Robert Hertzberg is promoting an extension of the sales tax, already highest in all 50 states, to services. The goal would be to squeeze another $10 billion annually from taxpayers.

Then there is Speaker of the Assembly Toni Atkins who proposes a brand new tax on drivers to pay for highway and road repairs in California. ?This new ?fee? would take $1.8 billion dollars out of the pockets of hard working California citizens over the next five years. ?This is especially ironic in that California already has the highest gas tax in the nation.

Not to be outdone, Assemblyman Jim Frazier has introduced a constitutional amendment (ACA 4) that lowers the Proposition 13 mandated two-thirds vote for special taxes to 55 percent, to fund local transportation projects.

Just what is a local transportation project, you might ask? ?From the bill, ??local transportation project? means the planning, design, development, financing, construction, reconstruction, rehabilitation, improvement, acquisition, lease, operation, or maintenance of local streets, roads, and highways, state highways and freeways, and public transit systems.? ?In short, the potential for billions of dollars of higher taxes.

Government bureaucrats and the special interests that contract to provide transportation infrastructure related construction and services, are, no doubt, doing the happy dance at the thought of being handed billions of additional taxpayer dollars.

??California taxes already rank at or near the top in almost every category. ?With state government taking in money hand over fist, can there be any doubt that those California lawmakers promoting new taxes deserve an award for chutzpah?

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.

Taxing Services a Bad Move For CA

There is a clamor in Sacramento for ?tax reform.? But for every political pundit, politician and bureaucrat in the room, there is a different definition of ?tax reform.?

For fiscal conservatives, tax reform means tax cuts. The state of California takes too much of our money now and this heavy tax burden unquestionably hurts working families and hinders economic growth.

But for self-styled ?progressives,? tax reform means even more tax hikes to feed an ever growing government and the demands of tax hungry special interests.

Because these two visions of ?tax reform? are polar opposites, is it even possible to agree on anything related to changing California?s tax system? ?Surprisingly, the answer is yes.

Both conservatives and liberals have at least acknowledged that California government is too reliant on revenue that fluctuates wildly. ?In other words, there is some agreement that the mix of things that are taxed might be altered so that tax revenue is more predictable.

The desire to address revenue volatility is understandable. ?Indeed, a commission was created by former Governor Schwarzenegger to address this very issue. ?Unfortunately, the commissioners themselves could not agree on a solution.

Now, newly elected state Senator Robert Hertzberg has proposed that California start taxing services, not just sales of physical goods. ?The reasoning behind Senate Bill 8 is that services make up a much larger slice of today?s economy than in the past and in order to have a ?balanced? tax system, we should consider expanding the tax base to things like car repair, legal services, kids piano lessons and dry cleaning.

But taxing services is a bad idea for California. ?First, such a levy would have a depressing effect on California?s service economy. ?It is a simple fact of economics that when you tax something you get less of it.

Second, and somewhat related to the first, is the ability to avoid the tax by exporting the service. ?For example, one can avoid California?s tax on accounting services simply by hiring an out of state accounting firm. ?And speaking of avoiding the tax, unlike a sales tax where there is an inventory of physical goods that can be tracked, it is much more difficult to ensure compliance with a tax on services. ?California already has a massive problem with tax avoidance due to the huge percentage of the economy that is ?underground.? ?A tax on services would drive even more economic activity into the shadows.

Some respected tax experts have not rejected out of hand the notion of extending a tax to services but only if done incrementally and in a manner that does not result in a net tax increase. ?And here is where the Hertzberg proposal is especially flawed. ?Rather than extend the tax to services and lowering the tax rate on both sales and services so the proposal is ?revenue neutral,? SB 8 has no provision for lowering the rate. ?So what is the tax hit on Californians? ?It is estimated to be $10 billion annually.

Last week, a?Wall Street Journal?article noted how several states in America are now cutting taxes to stimulate economic growth and provide needed relief to their citizens. But the ruling class in California apparently wants to head in the opposite direction.

Taxpayer advocates should always be prepared to discuss legitimate tax reform. But, at this point, Senate Bill 8 doesn?t qualify.

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.

Originally published by the HJTA

The Prop. 30 Tax Hike Should Retire on Schedule

No matter how high taxes are increased, it?s never enough for public officials and bureaucrats who live off taxpayer funded paychecks. ?According to these people, there is always one more dollar that is needed to make government ?whole.? ?And being made ?whole? in California means maintaining the highest paid government employees in all 50 states.

So it should come as no surprise that the tax-and-spend interests have already begun banging the drum and shaking the tambourine on behalf of extending Proposition 30, the ?temporary? tax increase approved by voters in 2012. ?Proposition 30 imposed the highest income tax rate in America. ?It also bumped up the sales tax ? a tax that hits lower income families particularly hard ? to tops in the nation.

The sales tax component of Proposition 30 is set to expire at the end of 2016 and the higher income tax rate will sunset in 2018, so those who feed off taxes are starting to panic.

During the last year, some lawmakers resisted putting Proposition 2 on the November ballot because it required the establishment of a rainy day fund to tide government over through lean times. ? These Sacramento politicians were concerned that if it passed, and the state had money in the bank, it would be more difficult to make the case that the Proposition 30 taxes should be made permanent.

State schools chief Tom Torlakson came out for the extension of Proposition 30 long ago, and we are now seeing the head of one of the state?s two major teachers unions, the California Federation of Teachers, calling for its continuation while maintaining it is not enough.

Of course, it?s never enough.

Writing in the Sacramento Bee, teachers union president Joshua Pechthalt attempts to make the case that the temporary tax hike should be extended. ?He justifies his position by claiming California is thriving and upper income individuals, unfazed by the higher taxes, are happy to stay and pay.

Not so fast.

While Pechthalt believes things are fine now that our economy is supposedly in a ?recovery,? working families aren?t seeing it. Our unemployment rate is the third highest in the nation and the US Census puts our supplemental poverty ranking at worst in the country.

Pechthalt?s evidence that Proposition 30 has not impacted high income individuals seems to be that wealthier communities, like Beverly Hills, have not become ghost towns.

Objective real estate reports from Nevada and other low or no income tax states make it clear that California has indeed lost many upper income taxpayers because of Proposition 30. ?The Wall Street Journal reported that ?many Californians have arrived [in Nevada] in the wake of Proposition 30. ?Passed at the end of 2012, the measure hiked personal income and sales taxes.? ?The San Francisco Chronicle published a piece in January of this year entitled ?State leaders closely watch migrating millionaires? noting that ?whether you sympathize or not, millionaires? migrating out of California has serious consequences to the state?s bottom line and is something state leaders are watching closely.?

The other problem with the union leader?s thesis is that we simply don?t know how many of California?s high earners decided to absorb the confiscatory tax rates for a couple of years knowing that they would eventually expire. ?If made permanent, the existing millionaire out-migration could very well turn into a torrent.

So, instead of asking whether we should make Proposition 30?s temporary tax hikes permanent, a better question would be whether those tax hikes were needed at all or, better yet, did they inflict more harm than good? ?There is compelling evidence that California would today be grabbing a bigger slice of the national economic recovery had it not passed Proposition 30 at all.

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.

This article was originally published by the Howard Jarvis Taxpayers Association.

Reprieve for Prop. 13

By now, most Californians have read dozens of analyses from experts and partisans alike about the meaning of last Tuesday?s election. Analyzing the national scene is not rocket science. ?Republicans romped and Democrats took a shellacking.

But understanding the impact here in ever-so-blue California is a bit more complicated. ?While it is true that Republicans, who tend to be more taxpayer friendly, did not win a single statewide seat, the news for fans of Proposition 13 is actually quite good.

Rather than focus on the statewide races, the Howard Jarvis Taxpayers Association was laser focused on using our political muscle to prevent the tax-and-spend majority party from securing the dreaded two-thirds supermajority in both the California Senate and Assembly. ?The reason why a two-thirds supermajority is so dangerous is two-fold. ?First, under Proposition 13, taxes imposed by the state cannot be imposed without the two-thirds vote. ?As long as the minority Republicans hold firm against tax hikes, Californians will be protected. ?(And it?s not like California needs higher taxes. ?We already have the highest income tax rate, the highest sales tax rate and the highest gas tax in America).

Second, it takes a two-thirds vote of each house to place a proposed amendment to the California Constitution on the ballot. ?Had the majority party achieved the supermajority, it could have placed anti-Proposition 13 measures on the ballot at will. ?But, because the Democrats were thwarted in their efforts, they will have to convince their political allies ? principally the public sector unions ? to spend several million dollars to collect the necessary signatures to qualify such a proposal.

Another observation about this year?s election is that, as if there were any doubt, the branding of Proposition 13 has never been stronger. ?Both true Proposition 13 defenders and pretenders used Proposition 13 as a talking point in their campaigns. ?Turns out that those candidates who were true Proposition 13 defenders ? meaning they had the endorsement of the HJTA Political Action Committee ? did very well. ?So much, in fact, that most of the endorsed candidates won, even those whom the pundits thought had little chance of victory.

That Proposition 13 itself was such a centerpiece of this election cycle is astounding. ?This landmark measure was on the ballot more than 35 years ago and yet incumbent legislators who had bad Proposition 13 votes while in the Legislature suddenly felt vulnerable. ?A former legislator who was openly anti-Proposition 13 lost badly to an HJTA endorsed candidate, Janet Nguyen, in a contested Senate seat. ?Her opponent, Jose Solorio, was in such deep trouble that Governor Brown cut one of his very few television ads this election cycle in a failed attempt to save him. ?As in 1978, Jerry Brown was bested by Proposition 13.

But to those who think that these political victories allow us a chance to rest, think again. ?Already, the enemies of Proposition 13 are conducting extensive political research ? both polling and focus groups ? to determine how best to dismantle these critical taxpayer protections. ?And left leaning anti-taxpayer groups have intensified their efforts to convince local governments and school district boards to pass anti-Proposition 13 ?resolutions.? ?These resolutions may be non-binding, but our adversaries are laying the groundwork for a repeal of Proposition 13 in 2016. ?That much is very clear.

But for now, let?s enjoy the victories just achieved. ?Just in time for the coming holiday, taxpayers and homeowners in California have much to be thankful for. ?And while we realize our reprieve will be short and that we must prepare for battle anew in a few short weeks, these victories give us the much needed hope that California can, once again, become the Golden State it once was.

?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.

This piece was originally published on HJTA.org