News that the governor and the California Federation of Teachers have reached agreement on a compromise tax initiative might give a boost to tax opponents. Having a number of tax increase measures on the ballot could sink them all, as the governor’s own political advisers have suggested. However, combining the initiatives with an emphasis on higher income taxes could move powerful business interests from a neutral position on the governor’s first tax initiative to an oppose position on the new one.

Both the California Chamber of Commerce and the California Business Roundtable each came out against the CFT measure (along with opposing Molly Munger’s tax increase proposal.) However, both groups remained neutral on Brown’s original tax initiative. The business groups indicated they could support the plan if reforms on pensions and spending were also put in place.

However, the reported compromise moves away from a sharing of the burden that Brown proposed in his measure to focusing the tax increase on the high-end taxpayers. Beyond that, the five-year “temporary” aspect of the Brown original proposal is extended to seven years in the compromise plan.  Few taxpayers would associate the word “temporary” with a seven-year tax.

Brown’s advisors publically warned that if the CFT tax initiative went forward it would garner well-funded opposition. That well-funded opposition could very likely switch its energies to the compromise proposal, which now has many elements that the business funders despised in the original CFT plan.

The compromise plan is a win for the public employee unions. They will be empowered to resist any reforms on pensions and spending, which could stiffen the resolve of business to oppose the new compromise.

Here’s the key: Even if the business organizations adopt a neutral stance on the governor’s new tax program, individual members of the business associations likely would step up to fund opposition to the new measure.