Fees, Taxes, and California Forward

In the con-con vs initiative reform debate. California Forward is the heart of the initiative side of the argument. So, their proposals, which are likely to be followed up with some corporate cash, carry some importance.

Now, many of these proposals are things you have heard before.  And the target of today’s news is a measure that would adjust some of the supermajority requirements. Sounds good, right? Well, maybe not, as CalBuzz’s birdogging of the measures uncovered a teensy-weensy issue: the original measure required basically all fees to get a 2/3 vote. In other words, they wanted to subsume the Sinclair Paints decision. Sure, progressives would get a majority vote budget in exchange, but that’s kinda like getting a lump of coal in your stocking. Sure, you can use it to heat the room for a while, but it’s really lame and you end up depositing a bunch of chemicals in the air.

Now that they got some negative attention from the left, CA Forward is trying to do what they try to do best. Get some more squishy love from the squishy middle. They’ve changed the proposal’s language. You be the judge as to how much difference this change makes:

Option 1) Their proposal still cuts into the Legislature’s ability to use raise fees by majority vote – which will still infuriate  progressives – but only when fee revenues would “replace funding for specific programs, services or activities previously funded by a tax that is repealed or reduced in the same or the prior fiscal year.”

Option 2) The proposal said a two-thirds vote was needed for “any bill that imposes a fee that replaces revenue that in the same or the prior fiscal year was generated by a tax.

Option 2 is the old language, with option 1 being the replacement language.  Now, this clearly makes a big difference.  A majority could still pass a new fee to bring revenue into a specific program that was receiving general fund revenue. However, the tax couldn’t have been otherwise reduced.

So, why is this a problem you ask? Why would we want to reduce the taxes? Ah, that brings us into the “Majority vote revenue package” that was placed up for discussion last year, and that Arnold said no way to. Essentially, that plan repealed one part of the gas tax to replace it with a majority vote gas fee as well as a tax to go directly to the general fund. That would be a revenue neutral tax increase, but end up bringing additional revenue to the table.

Under California Forward’s current plan, that is still killed. So, pretty much any substantive revenues will have to go through the supermajority. Whether you think the majority vote budget is worth that trade-off is a value decision. Given the painful budgets we’ll be seeing over the next few years, I’m a bit skeptical.