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.”
Conversely, 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.
Much of this initiative has to do with local government. I understand that there are state impacts also, but my post mostly has to do with local impacts. I think that increases in fees at the state level require 2/3 vote right now. I hope that changes in November.
Most Boards of Supervisors have 5 members and the current vote requirement to raise fees is 3 votes. This would increase that requirement to 4 votes. Most City Councils have 7 members and the current vote requirement is 4 votes to raise fees. This would increase that requirement to 5 votes.
I have not seen the same kind of toxic partisanship at the local level that I have seen in Sacramento. I doubt that a 2/3 vote to increase fees at the local level will have the kind of effect that is suggested.
Having said that, I hate changing tax rules by initiative and I generally don’t like 2/3 vote so Im voting against Prop 26. But the Cassandra rhetoric on this is a little over the top.
This is an important proposition that needs to be defeated.
Your post is spot on except for one thing: the pitchman’s name was Billy Mays. Think Willie Mays but a bearded white dude with no home run power…
as the bad deals baked into budget deals continue to screw state workers:
yet another reason why we need majority budgets, so that the governor and the superminority GOP can’t demand that these bad deals be written into the budget. a lot of workers were hoping to get their stolen salaries back.
Did you know that CARB staff expects (and I quote) AB 32 fees to be “almost 100% pass-through?”
I.e. passed through the the consumer at no cost to the regulated entities? That’s the evil genius of fees and why they are politically popular. Agency imposed fee on polluter. Polluter passes through fee to end user (us). We cheer as agency “sticks it” to Polluter.
You can’t pass anything called a “tax” anymore. But you can tax people, indirectly, through fees. And you can get them to actually cheer you on while you do it instead of getting out the tar and feathers.
While I’ll leave the merit of the vast number of fees imposed throughout the state outside the scope of this post, you can’t deny that it’s an insanely brilliant way of shifting taxation policy. Hide the taxes in increased prices of goods and services. You can just chalk it up to “inflation”.