Dan Walters

Opinion: Tax surge a problem for Dems

MCT

The Legislature’s Democrats were miffed when Gov. Jerry Brown insisted on using his revenue estimates as the basis for the 2015-16 state budget, rather than a higher number calculated by legislators’ budget adviser.

The legislators had used the larger figure as the basis for their version of the budget, which ramped up spending on health and welfare services, but backed down when negotiating a final budget with Brown.

Shortly thereafter, the Legislative Analyst’s Office reported that the state had already received a half-billion more in revenue than the budget anticipated, indicating that its higher forecast, about $3 billion more, may turn out to be more accurate.

Meanwhile, the California Taxpayers Association did a quick survey of reports from county property tax assessors and found that most were reporting healthy gains in valuations, ranging up to 8.67 percent in Santa Clara County, the heart of the booming Silicon Valley industrial region.

The survey tends to confirm what the Brown administration had forecast in May, that statewide property taxes will increase by 6.14 percent for 2014-15 and another 5.52 percent for 2015-16.

Each 1 percent increase in property taxes amounts to a half-billion dollars, so cities, counties, special districts and schools may be seeing a revenue jump in the $6 billion range over two years. And that may translate into lower state school aid obligations.

State and local governments may not be awash in cash, but it’s clearly one of California’s periodic revenue surges. And that, oddly enough, could be bad news for the Legislature’s Democrats and others on the port side of the political spectrum.

Democratic politicians, labor unions, social service and health care advocates, and other liberal interests want to ask the state’s voters for substantial increases in taxes next year.

Measures to raise property taxes on business, boost cigarette and oil production taxes, and to extend a temporary sales and income tax increase that voters approved in 2012 are in the works on the assertion that vital services need more money.

Meanwhile, Brown has called two special legislative sessions, seeking new taxes or fees to maintain state highways and bolster financing of the Medi-Cal system of medical care for the poor.

The powerful flow of extra money gives conservative anti-tax increase groups a potent argument that the proposed tax increases aren’t really needed, particularly if the cornucopia continues into 2016.

It puts spending advocates, especially liberal legislators, in the awkward position of arguing that the state has much more money to spend than Brown acknowledges and simultaneously complaining that there’s not enough money to meet all needs.

Secretly, therefore, advocates of new taxes may hope for an economic downturn that would curtail the revenue boom, thus making it easier to argue the need for new revenue.

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