Democratic Bill Would Let Locals Tax Themselves

More government services in the Bay Area? Fewer in the Inland Empire? You’d be forgiven if you think that’s a rehash of last week’s debate over budget cuts targeted at GOP communities.

But it could also be the shape of things to come under Senate President pro Tem Darrell Steinberg’s bill to give locals more power to tax themselves… presumably if Sacramento lawmakers will not.

Given the Senate’s Democratic majority, it’s not surprising the bill moved forward. The bigger question, though, is what impact it might have on the budget stalemate.

In fact, much of this morning’s debate over SB 653 seemed to be more about state than local budgeting. Steinberg’s bill is both simple and clever: local governments — a county, city, even a school district — would be able to impose a number of taxes which are now the exclusive province of the state, as long as the voters approve.

The taxes under the bill that could be raised on the local level: income taxes, vehicle license fees (the infamous “car tax”), oil severance taxes, alcohol or other excise taxes, and cigarette taxes.

“The whole point of the bill,” said Steinberg in his presentation today, “is in the absence of adequate state funding, to give communities a choice.”

As suggested at the outset, think for a moment how similar SB 653 is — philosophically, at least — to the hotly debated idea floated last week of imposing spending cuts, under a ‘no new revenue’ budget, specifically on GOP legislative districts. Steinberg’s bill simply shifts the focus of that fight from punishing communities, via state-mandated cuts, to rewarding them by giving more tax options via local elections.

(And Steinberg made a special point that those taxes would still be subject to a two-thirds vote of locals, a hurdle that’s historically been quite high.)

Opponents argued both the policy and the politics against the bill. Gina Rodriquez of the California Taxpayers Association. “We need to get the state’s house in order,” she said, “not support the creation of potentially more than 1,000 new taxing jurisdictions.” Critics also lamented the economic impact of additional taxes, should they be approved by voters.

And then there’s the matter of this year’s budget. The bill would do nothing to change the actual implementation or solution of the state’s current fiscal crisis, but it could — if passed and ultimately signed by Governor Jerry Brown — shift future debates over government services and dollars away from Sacramento. And it’s reasonable to assume that Republican-heavy regions of the state might suffer under that system.

“You have postulated here a whole plethora of taxes,” said Sen. Bob Huff (R-Diamond Bar) in this morning’s hearing. “It seems as a part of the scare tactics” of the budget debate, he said.

Whether the bill actually makes it to Governor Brown’s desk is, for now, beside the point. Whether it resets the 2011 budget jigsaw puzzle in such a way that the pieces fit together more easily… that’s the one to watch.

John Myers is KQED’s Sacramento Bureau Chief. Follow him on the Capital Notes blog or on Twitter.

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John Myers

John Myers is senior editor of KQED's new California Politics and Government Desk.  A veteran of almost two decades of political coverage, he served nine years as the statehouse bureau chief for KQED Public Radio and The California Report, and most recently as political editor for the Sacramento ABC-TV affiliate, News10 (KXTV). John served as moderator of the only 2014 gubernatorial debate, and was recently named by The Washington Post as one of the nation's most influential statehouse reporters.  Follow him on Twitter @johnmyers.

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