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Local Taxation, Negotiation, and A Mixed Bag of Policy

by: Brian Leubitz

Thu Apr 21, 2011 at 09:45:00 AM PDT


PhotobucketFor a few years, San Francisco's legislators have been pushing, in one form or another, legislation to allow at least that county to control additional forms of taxation.  The chief target of that has been the vehicle license fee since the time that Gov. Schwarzenegger lopped off a huge chunk of revenue from that source.  Both Sen. Migden and Leno have been keen on allowing my fair city to restore the VLF to return revenue to the City and County of San Francisco.

Now, there have been a few stumbling blocks around this.  Logistically, the taxes would be approved by different majorities depending upon the election circumstances.  That's not an overwhelming obstacle, but certainly getting 2/3 is challenging.  Not impossible, as the slew of parcel taxes over the past few years has shown, but difficult nonetheless.

But in a larger sense, it would be something of a declaration of war against the Republicans and their ideology.  And frankly Gov. Schwarzenegger was having no part of that policy, or of the politics.  But things are different now; Gov. Brown is not Gov. Schwarzenegger, and the time for a smooth reconciliation is drawing ever smaller.

And so, the possibility of local taxation is back in a major way.  This would allow counties to tax a whole slew of items that were previously regulated only by the state, and the anti-taxers are none too pleased.  Dan Morain has an excellent column on the subject in today's Bee:

The latest: Grant all 58 counties the power to tax everything from booze and cigarettes to oil extraction and personal income. Don't forget cars, soda pop and more, assuming voters would approve the new local levies. ... Lobbyists representing the oil, tobacco, soft drink, auto industry and many more are taking the latest tactic in California's budget battle seriously.

"I know it has gotten the attention of a lot of people, and I'm glad," Steinberg told me Wednesday. "The majority party needs to begin, appropriately and intelligently, using the power of its majority.  One way or another, it is our responsibility to do everything we can do to avoid $5 billion in cuts to education, and billions in cuts to public safety." (SacBee)

As this doesn't actually raise any taxes, it is a majority vote measure. No Republican votes are necessary.  Tony Strickland was suitably apoplectic, but really nothing new there.  And as the budget fight grows longer, and more teachers get pink slips, county supervisors are going to find this ability extremely attractive.  While voters won't have the right to vote on statewide taxes, they may get the chance to vote on local taxes.

As Morain suggests in his column, this really isn't the ideal situation.  It's one more way to draw the line between the haves and the havenots of the state.  What we'll end up with is Bay Area counties with more stable revenue streams, while the Central Valley faces ever deepening cuts.  The inequality would be both troubling, and possibly violate some laws.

On the other hand, counties that choose a more reasonable fiscal path shouldn't necessarily be bogged down by an obstinate minority in the Legislature.  And if this is what it is coming to, then so be it.  The state, and the counties, need additional revenue.  There are several counties that have shown themselves ready to tax themselves, and we shouldn't rule that out right away.  If the decision is between inconsistency across counties, and keeping thousands of teachers in classrooms, I suspect many Californians would opt for the inconsistency.  Heck, at least that way our kids can learn about inconsistency at school.

Perhaps this is just a negotiation ploy, but it is one that should be viewed from a serious policy perspective.  It's certainly not the best alternative, but it is among the best options that we have remaining, given the Republican Minority.

Brian Leubitz :: Local Taxation, Negotiation, and A Mixed Bag of Policy
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Local Taxation, Negotiation, and A Mixed Bag of Policy (0.00 / 0)
its been a while since i supported anything the dems were doing in sacramento but this i could support.  id just like to make a few suggestions:

#1 the income tax part be as  a % of state liability therefore all counties/jurisdictions have the same tax base and they are NOT allowed to create their own deductions, credits, etc.

#2 the vlf (car tax) be used EXCLUSIVELY for transportation projects-not discretionary/general fund spending.  transport. projects include things like the construction and maintenance of roads, highways, public transit (buses, trains, bikeways, etc.)

#3 the taxes on pop, cigarettes, etc-not be levied at the local level, but the state and that the money generated from them be used to offset the cost to society/govt of their consumption-pop & tobacco use are mainly healthcare costs, but alcohol consumption involves both healthcare and public safety.  lets use these excise taxes to recoup the cost of the consumption of these.  this is the same mentality as assigning a cost to carbon pollution.


Me too (0.00 / 0)
I like this too. so would a lot of people I suspect, Although some things would still be at the state level as they go across county lines, Like Caltrans, the State Supplemental Payment to Seniors & Disabled people, etc...

[ Parent ]
I Never Liked These Rules (0.00 / 0)
the vlf (car tax) be used EXCLUSIVELY for transportation projects

I am not fond of these rules, for the simple reason that money is fungible.  The effect of this rule wouldn't necessarily be to increase spending for transportation projects, but to shuffle paper and increase accounting bureaucracy (to verify this rule is followed), while the budget of other funds gets to have less allocated to transportation.


[ Parent ]
I Never Liked These Rules (0.00 / 0)
ok i understand how u feel.  i would just say that #1 the vlf is probably the most unpopular tax the state levies-or one of the most unpopular.  its basically a property tax on vehicles.  so im trying to hook this very unpopular tax up with a VERY popular program-transportation funding.  see, if u just raise taxes to pay for unspecified programs that is not gonna fly with the electorate.  but, if u take that tax and hook it up to a program (transportation-roads, freeways, rail, bikeways, infrastructure, etc)where there is widespread support for it.

i would also suggest to policymakers in sacramento that they allow the owners of these vehicles to pay on an installment plan.  it would be like a budget plan that electric cos offer.  and maybe this could even just be withheld from your pay or u could pay it yourself every month, 3 mos, etc.  as opposed to the current getting a bill every yr for several hundred $$$.

those r my thoughts about it.

and i might add that this is like an impact fee-w/out vehicles we wouldnt need roads or freeways (the things we r paying for with the vlf) so it pays for itself.


[ Parent ]
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