Robert Hertzberg, the former speaker and newly elected state senator, has a big idea: extending California’s sales tax to services, generating $10 billion a year, and giving a break to low-income working stiffs.
Sen. Fran Pavley, D-Agoura Hills, nearing the end of her tenure in the Legislature, hopes to expand AB 32, the 2006 landmark that requires Californians to reduce greenhouse gas emissions to 1990 levels by 2020.
Pavley’s new bill, SB 32, would require that California reduce greenhouse gas emissions to 80 percent below 1990 levels by 2050. The bill doesn’t spell out how the state would attain those reductions, though it couldn’t happen so long as we use gasoline to power our 23 million-plus cars.
Senate President Pro Tem Kevin de Léon is proposing legislation that would force the state’s massive pension funds to divest from all coal holdings. That’d be minor compared to the next step: shedding investment in all fossil fuel. Think Chevron. The San Ramon-based oil giant employs 10,000 people in this state and paid $500 million in taxes to the state in 2013. It would not go quietly.
Thinking big and building consensus is difficult. Too few legislators attempt it. Too many of California’s 120 legislators spend too much of their term-limited time focused on bills that tweak code sections understood only by a select few lobbyists and their clients.
Should we be able to set off fireworks legally on New Year’s Eve? Should government be permitted to buy and sell poultry that has been plumped up by the injection of water? Should optometrists be authorized to perform surgery?
And whither ferrets? As my colleague Alexei Koseff wrote the other day, ferret lovers are seeking a legislator to carry a bill in 2015 to legalize the little weasels as pets.
It seems like only yesterday that Speaker Willie Brown pronounced the death of ferret legalization by telling the rug-wearing author, Assemblyman Jan Goldsmith, “That bill is deader than that thing on your head,” or words to that effect. That was 1994.
Time does fly, but no bill truly dies in Sacramento. Advocates of marijuana legalization are back, having hired Platinum Advisors to advance their weedy cause. Platinum will gather lots of green by advocating for legalization. If they succeed, marijuana entrepreneurs would benefit themselves, not the state.
Internet poker has risen again, too. There’s too much money involved to let this issue rest.
Assemblyman Mike Gatto, D-Los Angeles, is carrying an Internet poker bill. Gatto also chairs the newly created Assembly Privacy and Consumer Protection Committee. Internet gambling, privacy and consumer protection? It’s hard to see how helping gambling corporations become richer will help consumers.
Gatto said he intends to introduce a privacy bill of rights, a gimmicky name but perhaps a big idea. If it’s too big, tech industry lobbyists will smother it. Gatto might leave a more lasting mark by reviving a bill that died last year that seeks to restrict data brokers who traffic in our personal information.
As happens every year, big money will drive big ideas in 2015. This being California, some of the biggest money will come from the left.
Billionaire environmentalist advocate Tom Steyer, a friend and patron of de Léon’s, supports coal divestment, the expansion of efforts to reduce greenhouse gases and an oil severance tax.
For all of Steyer’s money and de Léon’s influence, there’s little chance that the Legislature will vote to impose an oil tax. Business groups, including the oil industry, did well in November by electing legislators who will balk at new taxes. If California is going to levy a tax on oil pumped from the ground, voters would need to approve it by way of initiative.
The bill, which reads less like legislation and more like an extended press release, notes that the state collects sales taxes on goods but not on services. If you do your own taxes, SB 8 points out, you pay a sales tax on TurboTax software. If you hire H&R Block to do your taxes, you pay no sales tax.
“Taxing only goods and not services when our economy has been so fundamentally transformed makes no sense and is manifestly unfair. This has to change,” the bill argues.
Clearly a rough draft, SB 8 includes obvious mistakes. It refers, for example, to the “dot-com economic boom of the 1950s.” Dot-coms didn’t boom during the baby boom when Hertzberg and I were learning to walk.
That aside, a tax-code overhaul is long past due. It will be especially relevant as Proposition 30, the temporary income and sales tax increase approved by voters in 2012, expires.
The measure would exempt health care costs, education expenses such as tuition, and businesses that gross less than $100,000. By taxing all other services, Hertzberg envisions generating $3 billion for public schools, $2 billion for public universities, $3 billion for local government, and $2 billion for a tax break in the form of an earned-income tax credit, for low-income families.
Every interest group, from accountants and attorneys to zoo managers whose admission tickets would be taxed, will retain lobbyists to fight SB 8. Speaking of lobbyists, their services no doubt would be taxed, unless they manage reach a quiet side deal that exempts them.
“I want to engage,” Hertzberg said. “You have to lead.”
Hertzberg and a few others are right to aim high. By year’s end, legislators and Gov. Jerry Brown will have approved roughly 1,000 bills, whether we need them or not. A few might have impact. Legislators’ time is limited. They ought spend their few years working on concepts that will change the state for the better. Then again, they could work to legalize ferrets.
Follow Dan Morain on Twitter @danielmorain.