For Local Governments, To Tax or Not to Tax, That is the Question

Against the background of the economically devastating coronavirus plague (not in any way to minimize the ultimate tragedy now of lives lost), governments are trying figure out how to handle their lifeblood – taxation. The feds put off income tax collection until July 15. The state of California did the same. Meanwhile, there has been pressure to push back the property tax due date past April 10 in the state. But what should local governments do about the projected hundreds of taxes being considered for November? 

Recall that there were 237 local tax increases and bonds on the March ballot. In recent history, hundreds of local tax measures have appeared in each California statewide election. It’s safe to assume that is the expectation of this November’s ballot, but should it be? 

Given the pandemic blow to the state’s businesses and taxpayers should governments, which will certainly feel the effects with fewer dollars in their budgets, push tax increases in a difficult economic time? 

Enough with the questions. It says here, local governments should hold off now. Even if the health crisis subsides and the economy bounces back (helping to replenish government coffers), taxpayers and businesses will still be licking their wounds for months following the coronavirus economic calamity. 

Headed by the California Taxpayers Association and the Howard Jarvis Taxpayers Association, about 75 business and taxpayer groups asked Gov. Gavin Newsom to issue an executive order to delay the April 10 property tax deadline to July 15. The letter sent to the governor argued that putting off the property tax collection would not be crippling because taxes on all business personal property already has been fully paid; the first installment of 50% of the property taxes on the secured roll was paid in December, while some property taxpayers paid in full the end of last year; and more than half the homeowners use impound accounts that will pay taxes by the deadline.  Local governments would receive all that money. 

The California State Association of Counties (CSAC) and the California Association of County Treasurers and Tax Collectors oppose delay. In a joint statement, they said: “Taking care of Californians is our top priority, and counties, cities, and schools are burning through local reserves to do so. Any delay in payments beyond the April 10 property tax deadline, for individuals or businesses that can pay, will tip local governments into insolvency at a time when our residents need us the most.” 

At least two counties have put off property tax collection until May 4 while others are suspending any late fees. 

While expected taxes to maintain government functions is an argument the associations are leaning on, pushing for new taxes is an altogether different matter. 

There are a couple of tax measures in Los Angeles County cities facing voters next week. In May, there is a scattering of tax measures throughout the state. But one tax, a business head tax in Palo Alto destined for the November ballot, has already been pulled because of the economic situation. 

Yet, other local governments are taking the “damn the torpedoes, full speed ahead” attitude at a crucial period. 

Yesterday on this site, W. Bruce Lee, president of the Sacramento Taxpayers Association, admonished the Sacramento Transportation agency for rushing a tax measure forward in this difficult time.

Considering we are in the throes of an economic tornado, governments should hit the pause button on considering new taxes. Wait until the crisis passes to see how deeply scarred the state’s businesses and taxpayers are. Wait to see how strongly and how swiftly the economy comes back. Don’t apply more burdens on the taxpayers at a time of crisis. There is time to qualify measures for the November ballot—if they are necessary. But, that is another discussion.

Joel Fox is Editor and Co-Publisher of Fox and Hounds Daily.

This article was originally published by Fox and Hounds Daily.

Comments

  1. TheRandyGuy says

    Am I missing something here? JUST. VOTE. NO. The voters are the ones making the decision on new taxes when they appear on the ballot. If the people are stupid enough to tax themselves to benefit a bloated and inefficient government agency, then they deserve it.

  2. I just paid my vehicle registration on line and behold, there is now a 2.1% service fee that is added on when you submit your payment! There was no advanced notification of this service fee. This is another scam to fleece people for their hard earned money. Mail a check and try and save any money you can!

  3. JLSeagull says

    Of course the taxes should be collected when due. How else can government at all levels pad the coffers of government employee unions? Their motto is “Screw the taxpayers and the public.” How many government employees are being furloughed or laid off – not a single one. They may be sheltering-in-place but they are receiving full pay just the same.

  4. Californians should get ready to be FUCKED by the Democrates after this crisis is over. They will have to raise taxes on EVERYTHING TO PAY THEIR GREAT RETIREMENT BENEFITS. Stock market is down big time and CALPERS always puts really nice returns on their investments that NEVER HAPPEN so they get money out of the GENERAL FUND. This is something the DEMWITS said would never happen because they will always get 8-12% on their investments…LOL THEY LOST A TON OF MONEY. Guess who will make that up??? CALIFORNIANS….The state is as corrupt as can be…EVERYTHING IS FOR THE ILLEGALS…all paid for by HARD WORKING Californians..and what do the demwits get in return??? They get to stay in power and ALL THE ILLEGALS VOTING will continue..Over 3 million votes in California election in 2018 alone..Now you know why Demwits want to change the voting rules!!!!They want all mailin ballots, just like their Voter ballot HARVESTING. This is a practice Illegal in just about every state but a HANDFUL and you guessed it they are all DEMOCRATIC CONTROLLED STATE. The DEMOCRATES HATE TRUMP so much they are already planning to CHEAT BECAUSE YOU SEE DEMOCRATES KNOW WHAT IS BEST FOR YOU, you don’t.

  5. Donald J says

    The solution has been available to the voters all along. Elect Conservatives who know and believe in small Government instead of the theiving Tax and Spenders California voters have become famous for electing over and over again. The politicians of the left and a few from the right (Rinos) will do and say anything to take your hard earned money to enrich their own ambitions.

  6. I am an employer, I am required to pay the EDD payroll taxes monthly for my 3 employees, when filing my quarterly report for EDD yesterday I was shocked that the unemployment insurance payroll tax had gone from 1.7% to 6.2 %. No doubt that this is due to the Corona virus and all the California tax payers that have lost their jobs. This increase took place without notice to me, the pandemic did not start the closing down of businesses until the middle of March yet the EDD charged me this high rate for the entire 1st quarter, taking it back to Jan. So our President gave all slam business owners a payroll tax break, and my Gov Newsom just took that away and charged me even more. I guess that is my reward for keeping my business going during this crisis. No this, the State of California doesn’t care about small businesses here at all, the compliance’s, taxes, payroll taxes, mandatory insurances, permits, licenses are criminal for any small business owner.

  7. California is a low productivity service based economy with enough rich people taxed to the gills to float the state Utopian dream….

    Now pandemic….who do you know who had an abrupt debilitating whiplash who recovered without significant time to recover….

    The Days of Wine and Roses are over!

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