Dan Walters

California’s tax battle looms in ’16

When Democrats lost their legislative supermajorities last month, it doomed even the very faint chance that legislators would enact the hefty tax increases liberal groups yearn to impose.

That, however, doesn’t end the perpetual debate over whether Californians should pay more taxes; it merely shifts it to the ballot, most likely in 2016.

The much higher voter turnout of a presidential election, coupled with a much lower threshold for qualifying initiative ballot measures, creates the opportunity for pro-tax-increase forces – such as public employee unions – to make their big move.

At least four embryonic tax-hike campaigns are evident, with the biggie being whether the temporary increases in sales taxes on everyone and income taxes on the affluent, passed by voters in 2012 at the behest of Gov. Jerry Brown, will be extended.

The school unions are beating tax-extension drums the loudest because they have the most to lose, potentially, if the extra taxes expire. But Brown himself is publicly leery, saying he meant them to be temporary, and one big unknown is whether the popular governor would actively campaign against extension.

There are also movements for changing Proposition 13, the iconic 1978-vintage property tax limit, to allow higher taxes on commercial property, for boosting the state’s 87-cent-per-pack cigarette tax by $2, and for imposing a new tax on oil extraction.

The latter two have been tried before, without success, and polls of voters are mixed on all four. Voters appear to be at least semi-willing to tax others – the rich, perhaps, and smokers – but not themselves. And any specific taxes would draw major opposition financing from affected interests, such as commercial property owners and tobacco and oil companies.

Brown, meanwhile, has dropped hints that he may sponsor his own ballot measure, and there have been some indications that it could be a broad overhaul of California’s tax system, which is precariously dependent on income taxes on the wealthy and therefore very volatile.

“I think that his (Brown’s) legacy in the second two terms will be, to some degree, based on taxes,” Democratic campaign strategist Garry South told a recent forum in Sacramento.

Unless the tax system becomes more stable, Brown’s hopes of leaving the state’s tortured budget in good shape would be undermined.

Those talking up 2016 measures – and that includes non-tax issues such as pension reform or marijuana legalization – are buoyed, oddly enough, by this year’s record-low voter turnout.

Because the signature requirements for initiative petitions are percentages of the total vote for governor, they have dropped by nearly a third from previous levels.

Slashing signature-gathering costs could result in a 2016 ballot crowded with high-octane measures.

Call The Bee’s Dan Walters, (916) 321-1195. Back columns, sacbee.com/dan-walters. Follow him on Twitter @WaltersBee.

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