The state Legislature returns to work on Jan. 6, and taxpayers should be on their guard as lawmakers consider new laws that would grease the skids for even more tax increases.
One especially concerning threat is Assembly Constitutional Amendment 1, which was defeated on the floor of the Assembly in August but is eligible for reconsideration. ACA1 would make it easier to pass local tax increases for infrastructure or affordable housing. Currently, under Proposition 13, those taxes require the approval of two-thirds of voters. ACA1 would lower that requirement to just 55 percent.
Another constitutional amendment proposal that could raise tax bills is Senate Constitutional Amendment 5. It would lower the vote needed to pass local parcel taxes for schools from the current two-thirds to 55 percent. Like ACA1, SCA5 needs a two-thirds vote in each house of the Legislature to get on the statewide ballot, and then approval by a simple majority of the electorate to become law.
More funding for education is always on the wish list of the California Teachers Association, which is backing the “split roll” property tax initiative headed for the November 2020 ballot. The measure would raise an estimated $12 billion annually for local governments and schools by revoking Proposition 13’s protection for business properties and reassessing them to current market value. However, a recent poll showed only lukewarm support from voters for raising property taxes on California businesses.
Perhaps with the goal of shaping public opinion, the CTA is sponsoring Assembly Bill 39, introduced by Assemblyman Al Muratsuchi, D-Torrance. AB39 would set an “aspirational goal” of higher base funding under the Local Control Funding Formula used to distribute state money for education. The specific goals in the bill would require about $33 billion in additional spending, according to an analysis for the Legislature.
Writing “aspirational goals” into law would likely generate a drumbeat of official-sounding reports claiming the state is failing to meet its goals for education funding.
But even a massive property tax increase on businesses throughout the state would not be nearly enough to reach the “aspirational goal” of $33 billion more in spending on education. Pressure for tax increases will continue. The California School Boards Association is planning an initiative for 2022 that would raise income tax rates on corporations and high-earning individuals — that is, if any of them are still in California.
Another proposal to enable new tax increases is Senate Bill 732, sponsored by the South Coast Air Quality Management District and introduced by Sen. Ben Allen, D-Redondo Beach. SB732 would create a new voting district in the four-county region, thereby giving the SCAQMD board the authority to put tax increases on the ballot. The bill would allow a sales tax increase of up to 1 percent to fund programs such as subsidies for electric vehicle purchases.
The new year may also see the return of SB246, Sen. Bob Wieckowski’s proposal for a 10 percent tax on the average price per barrel of oil or unit of gas extracted, and AB18, which would impose a new tax on the sale of firearms and ammunition.
