Second Initiative Launched to Repeal Gas Tax

gas prices 2Anger over the increase in gas taxes has launched a second initiative to repeal the tax passed in April. Sources close to the drafting of this new measure say it will be well funded. Such a measure could have political implications beyond undoing the tax — one situation now and one if it makes the ballot.

Polls show strong opposition to the gas tax increase. A gas tax repeal measure could rally Republican voters to go to the polls during the 2018 General Election, especially if no Republican makes the runoff for either of the state’s high-profile offices, governor and United States senator.

The timing of the filing of this initiative is also interesting. News of the pushback against a previous tax increase comes at a time when legislators weigh another tax increase vote on Senate Bill 2, a document tax to pay for housing. A reminder that taxes are on the voters’ minds might play into the final legislative votes on SB2.

The new tax repeal effort is a short constitutional amendment that states that all gas taxes approved after January 1, 2017 must be approved by the electorate. While the taxes approved under SB1 take effect in November they would cease to be collected if the new initiative passes in 2018.

An earlier initiative filed by Assembly member Travis Allen is also designed to repeal the gas tax. That measure is awaiting a hearing in court over the wording of the title and summary written by Attorney General Xavier Becerra.

Update: The SB2 tax plan passed the Assembly with no votes to spare

This article was originally published by Fox and Hounds Daily

New tax on real estate docs adds hardships to most vulnerable week, the California Senate voted to pass Senate Bill 2 which would impose a new $75 tax on real estate documents filed with each county’s clerk recorder. If the bill becomes law, the projected revenue — over $250 million annually — would be dedicated to low income housing programs.

Like a recurring nightmare, this proposal to tax real estate transactions seems to come up every legislative session. Up to now, this regressive tax has failed to gain traction because of bipartisan opposition. Taxpayer and business interests hope that, once again, the bill fails to complete its journey through the legislative process.

Currently, certain real estate documents must be filed with the county in which the property is located.Recording fees are relatively modest, costing between $14 and $18 varying slightly among counties. The fees help defer the costs of administering the clerk/recorder’s office and, as long as the fees are low, they encourage people to record essential documents.

SB2 would increase that fee to anywhere between $89 and $93 per document; amounting to a tax increase of up to 1,250 percent. Anyone recording a property-related document would be required to pay the fee although sales transactions would be exempt. There is also cap of $225 on each transaction.

A flat rate tax on real estate recordings is highly regressive. For example, because actual sales are exempt, a person purchasing a multi-million dollar home wouldn’t pay the higher tax. But a widow recording an affidavit of their spouse’s death would. So would a contractor filing a mechanics lien for unpaid work or a senior citizen on a fixed income recording estate planning documents, including transfer upon death deeds. Moreover, the bill would make refinancing a home and loan modifications more expensive as those transactions would trigger the tax.

The biggest irony of SB2 is that it ignores basic economics. Think about it. A tax imposed on real estate transactions — obviously imposed only on those who own property — to pay for programs to make housing more affordable. This is like treating someone with a low blood count with leaches.

No one disputes that California has a housing crisis. It ranks 49th out of 50 states in housing units per capita. But SB2 only creates a different hardship as it attempts to alleviate another.

In a 2015 report by the California Legislative Analyst’s Office titled, “California’s High Housing Costs: Causes and Consequences,” the nonpartisan LAO said “the key remedy to California’s housing challenges is a substantial increase in private home building in the state’s coastal urban communities.” Furthermore, “considerable evidence suggests that construction of market-rate housing reduces housing costs for low-income households,” while government programs for affordable housing help only a fraction of low-income Californians. And expanding those programs would be “extremely challenging and prohibitively expensive.” In other words, a new tax or bond is not the way to solve this problem. Government programs cannot be the solution to fix problems created solely by government.

SB2 puts an excessive tax burden on families who have already achieved homeownership and is unnecessarily regressive. Lawmakers should reject SB2, as they have in the past, and work to remove regulations, lower building permit and impact fee costs and push for CEQA reform. Only then can we ensure that the American Dream of homeownership remains viable in California. Taxpayers should call their representative in the State Assembly and urge them to oppose SB2.

Jon Coupal is the president of the Howard Jarvis Taxpayers Association and Kammi Foote is the clerk-recorder of Inyo County.

This article was originally published by the Orange County Register