Tag Archives: fees

Prop 26: Just How Bad?

Peruse the contributor list to the Yes on 26 campaign, and you’ll see a who’s who of corporate “baddies”.  Tobacco, oil, you get the gist.  If there was a company that I’ve written about with “Big” preceding the name, I’m pretty sure that they contributed to the campaign. And to the other side, they got few, if any, grassroots contributions.  It was a campaign of, by, and for the big corporations.  Unfortunately, the No on 26 campaign just didn’t have the resources to get that message out.  I’m not sure that would have been enough to change the final outcome, but it definitely would have pushed some votes.

So, now that we are stuck with it, what does it mean for the state.  Well, to put it bluntly it really, really stinks.  That being said, it looks like fees currently in place will probably remain unscathed.  But not all:

Initial word is that many fees won’t be affected. But veteran municipal lawyer Michael G. Colantuono said the proposition is likely to bring significant change in a handful of cases.

Colantuono, part of a League of California Cities task force analyzing Proposition 26, said the measure could affect fees charged by public power utilities, park districts and business improvement districts, to name a few.(SacBee)

But, want to use a fee to help out some poor folks? Well, screw you.  It starts getting very murky in this realm, with the potential for a lot of litigation to come on these questions.  What counts as a benefit? How much of the benefit has to go to the payors? And so on…

Oh, and as an added bonus for PG&E and CalEdison, it just gave them a boost over muni providers. Because muni electric providers fees are government fees, they can’t charge a fee to provide service for the poor, like private providers can.  Yatzee for them I suppose.

Look for a lot more to come out about what this breaks, and what it doesn’t over the next few years.

Prop 26 is Prop 23’s Little Polluting Brother

First, let’s state this clearly: Prop 26 goes where even Prop 13 dare not tread.  The measure moves any regulatory fee which doesn’t exclusively benefit those being charged the fee out of the realm of majority votes at the state and local level to the 2/3 super-majority, right up there with the rest of our broken system.  And as Jean Ross points out in CalBuzz today, it protects polluters:

The court found that such fees were regulatory fees – not taxes – and could be imposed by a majority vote. Sinclair built on the logic of a prior appellate court ruling that ruled that, “A reasonable way to achieve Proposition 13’s goal of tax relief is to shift the costs of controlling stationary sources of pollution from the tax-paying public to the pollution-causing industries themselves.”

Billy MyersConversely, if the state can’t impose the fees on “pollution-causing industries” to recoup the cost of environmental monitoring and remediation, those costs will be shifted to taxpayers as a whole. Or, in an era where budget crises have become the status quo, programs that enforce environmental, food safety and other laws will be scaled back, if not eliminated. Which may be the true goal of the backers of Proposition 26. (CalBuzz)

While Prop 23 is getting all of the attention, Prop 26 is just as, if not more pernicious.  If it passes, it makes the implementation of any new environmental legislation difficult if not impossible.  Local environmental innovation will be stifled, and the polluters, through their Republican cronies, will be able to block any fee.  Sounds great, doesn’t it.

But like Billy Mays used to say (RIP, Billy), “But wait, there’s more.”  Prop 26 would also kill the so-called “tax swap”.  As it stands now, if the state takes in no additional revenues, and just adjust taxes to make the system more equitable, there is no supermajority requirment.  As Jean Ross points out, we could close some corporate tax loopholes to reduce the personal income tax on the middle class without a 2/3 vote in the legislature.  That would be ok if and only if, under Prop 13, we net no additional revenue.  It’s not really an overwhelmingly powerful budget balancing tool, but it does allow some additional flexibility.

However, Prop 26 requires a 2/3 vote for any measure that increases tax for any taxpayer in the state.  So, if it reduces taxes for 3 million people, but raises taxes on one dude? Yup, 2/3 vote.  It’s an unwieldy system to say the least.  

It is just one more step on the road to totally break our state, and while Prop 23’s defeat is critical, it is hard to argue that Prop 26 is any less important.  The reach would be enormous and long standing, and could throw our system into further chaos.

On Slicing Pies, Or, Mystery Fees Cause Retirement “Money Spill”

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