Lots of numbers in the new Public Policy Institute poll but let’s concentrate on matters of importance to business. Thirty-two percent of those polled identified jobs and the economy as California’s biggest problem. While the jobs and economy issue continues as the top issue for the voters, the number on jobs and the economy as the most important state issue dropped 13-percent over one year, and fell 20-percent from when PPIC asked the question two years ago.
Are things then looking up in the Golden State?
Maybe yes, maybe no. The poll respondents were almost evenly split on whether California was heading in the right direction. Likely voters, however, were more negative with 53-percent choosing the option that the state is going in the wrong direction and 41-percent choosing the right direction.
While the important issue of jobs and the economy was diminished in the poll, so was the desire to tax corporations. Sure, there was still a majority at 51-percent who agreed that state taxes on corporations should be raised – but that was down from when PPIC asked the question in previous polls: 60-percent in 2011; 68-percent in 2012; 54-percent in 2013.
Business Roundtable president Rob Lapsley said the number on taxing corporations does not reflect the consensus of thinking across the state, especially where new jobs are so desperately needed. “The results on taxing corporations is the tale of California’s two tier economy. It received its highest support in the San Francisco Bay Area because of the strong high tech economy. It was rejected throughout almost every other area of the state where unemployment remains high because we are not growing the critically important middle class jobs we need for California families.”
PPIC asked about leveling a sales tax on services that are not currently taxed. The suggestion flopped. Respondents opposed the idea 30-percent Yes, 59-percent No. However, when asked about extending the sales tax to services not currently taxed while lowering the overall tax rate that suggestion fared better – 44-percent Yes, 43-percent No.
The big question business owners and taxpayers have to ask is: Will the lower rate stay down? I can see some politician argue that taxpayers were used to paying a higher rate so ‘we can nudge the new rate up a bit and they won’t mind.’ The poll indicates there is room for discussion about sales tax on services. It also indicates, I think, that the two-thirds vote for tax increases will continue to maintain strong support with the public. What voters would want to see a lower tax rate and an easier avenue to raise that rate?
Speaking of taxes, the PPIC poll asked if Californians thought they were taxed too much when combining state and local tax burdens. The answer was Yes. While 57-percent of likely voters thought they paid more than they should in taxes, 60-percent of all adults agreed with that notion.
PPIC also inquired if the tax system was fair. Of those who said it was not fair, 72-percent said they pay more taxes than they should.
But voters were willing to raise taxes – on the wealthy. 63-percent were willing to raise the top rate on state income tax payers. The Prop 30 formula if you will.
Don’t bet that the Prop 30 taxes, at least the income tax portion, will expire when they are scheduled to.