Last week’s Los Angeles Times article by Patrick McGreevey titled, Lawmakers Test Brown’s No-Tax Resolve with Calls to Hike Levies, should focus the business community’s attention on considering a proposal I have suggested on this site before – an initiative constitutional amendment to allow for referendums on tax measures.
The Times article reported that 20 tax and fee measures were working their way through the legislature. True, Governor Jerry Brown has indicated he is not interested in signing any tax increases, but Brown won’t be governor forever. (Although it may seem otherwise to any Rip Van Winkle who’s been sleeping since the early 80s!)
There is a possibility that the Democrats seeking tax increases can hold onto their two-thirds supermajority for longer than Brown serves. Or the governor could change his mind.
If the legislature decides to raise taxes, looking at the flock of current tax measures, it appears legislators want to do so on commerce — industry by industry: soft drinks, cigarettes, oil, others. A divide and conquer strategy.
I saw this possibility coming in a July 2011 column when I wrote:
As taxpayers and businesses consider the political landscape during and after the coming election year, they might want to think about making a small but powerful change to the state constitution. Article 2, Section 9 (a) grants the people referendum power to challenge bills passed by the legislature and signed into law by the governor. However, the constitution prohibits the use of referendums for tax levies. Excising that prohibition from the constitution would add an important taxpayer protection by potentially giving voters the final say over taxes.
In the next election cycle, a major push will be made to get enough tax friendly politicians elected to the legislature to scale the two-thirds vote barrier required to levy taxes. Democrats think that capturing two-thirds of both houses of the legislature is possible in the next election. They may be right.
The two-thirds majority is in place now and the L.A. Times story indicates that the move for increased taxes is on the march.
Businesses may have better luck convincing the general public rather than legislators that these taxes are not a good idea. Ultimately, it will be members of the public who pays those taxes. Polls indicate that voters think the current tax situation is enough, thank you.
However, business would not have the opportunity to appeal to the voters if, first, the constitution is not changed. Business should do something it does not often do in these situations, and take the long view. Act sooner than later so businesses will have a tool to appeal to voters. They still could lose at the ballot box but at least they will have a chance to make their case.