While the legislators are getting paid again, California’s budget wrangling is not yet over. Or, more properly, the dominoes are now falling. Yesterday, I mentioned that we would likely see some local sales taxes appearing on budgets soon. And, well, it didn’t take long for that to happen:
But San Francisco voters might be asked on Nov. 1 to enact a local half-percent sales tax on April 1. The half percent raises the sales tax to 9 percent, still cheaper than consumers are paying until July 1. However, the benefit is that San Francisco retains all the money raised by the hike.
Mayor Ed Lee, who is proposing the increase, says the half-cent tax would generate about $60 million annually for The City’s coffers and be used to pay for rising costs of police and firefighter salaries, as well as public health and social services. (SF Examiner)
The measure would void itself if the state sales tax were increased again, and then sunset in 2022. However, given the Republican obstinance over revenue, a legislative sales tax increase seems unlikely. In San Francisco, this stands a decent shot of passing, but the 2/3 vote requirement on the November ballot still puts a high hurdle. However, as of right now, it looks like there will be near universal support for the measure from elected officials in SF.
The bigger question is whether other municipalities will be able to accomplish this. Certainly in some of the redder areas, this is pretty much off the table. But as local budgets start bleeding a little bit more, don’t be surprised to see more of these in 2012.
Crossing the 2/3 threshold is extremely difficult. I don’t see these going very far.
Measure R in LA county enjoyed the perfect storm of high gas prices and extremely high Democratic turnout in a presidential election and it still barely reached 2/3.
Local sales taxes didn’t use to require 2/3 of the vote. Then some ballot measure passed in the 90s changing that.
We desperately need constitutional reform, or at the least, 2/3 Democratic majorities in both houses of the legislature.
Repubs are forcing this choice.
Oregon and 4 other States don’t have sales taxes. Oregon relies primarily on income taxes and secondarily on property taxes to fund State operations. Both of these taxes are progressive. They seem to be getting along fine.
We may have little choice to avoid disaster in the short term if we don’t raise sales taxes, but longer than that, they hurt the poorest most and hurt the richest least.
Our best choice is to chip away at old Prop 13. First we can put fair taxation of commercial property on the ballot as an initiative. Next, we can propose current value taxation of property worth in excess of $1 million dollars (for example). Then we can attack the 2/3 requirement for tax increases. That’s the holy grail, we get that one, we can go to a tax system like Oregon has: no sales taxes, primarily income taxes backed up by property taxes.
I don’t like the idea of high sales tax because it is so regressive, but the concept of higher local tax is appealing. There may be parts of the state that want higher levels of service from government while others are just fine with a minimalist government. Perhaps a local income tax?