Reading Governor Jerry Brown’s meaning on some issues, with or without a dictionary and history text, can be tricky. But it was worth looking for signals on tax issues at the governor’s Friday press conference introducing the record $113 billion general fund budget.
When Brown was asked about extending the Proposition 30 tax increases or making it permanent, he noticeably paused before answering, “I said that’s a temporary tax and that’s my position.”
It may be risky to see meaning in the pause but it suggested he was responding carefully. That prompts some parsing of the short answer. If the Prop 30 tax were extended a specific length of time, in the governor’s mind would it still be considered a “temporary” tax with a new end date as opposed to making the tax permanent? Therefore, cloaked in the governor’s answer is there now some wiggle room for discussing a tax extension?
Or do I see imaginary monsters hiding in the shadows?
When asked about tax reform, Brown framed the answer in a skeptical tone when responding to a reporter as lowering the tax on the rich and adding it to the middle class and poor.
He then noted the debate that will be generated by Senator Bob Hertzberg’s effort to reform taxes including taxing services. Brown highlighted the difficult hurdles to convince people to accept service taxes. “I think Mr. Hertzberg is going to come up with some great ideas and people ought to listen to him and see where they go but I can tell you this, taxing new people is always difficult. So if you tell them that their Pilates class takes a 8.5% sales tax they may not be as yoga happy as they were before.”
In searching for revenues for transportation infrastructure, one need the governor highlighted in his inaugural address, Brown seemed open to the idea of road usage charges for miles driven. He referenced to a four-year study on the gas tax and funding for infrastructure that he intended to accelerate. He plans to meet with leaders of both parties to see what resources are available for transportation. Revenue enhancements, perhaps, the 80s term for tax increases?
Clearly, the tax question will not go away even with the governor’s pronouncement of a “precariously” balanced budget. He said California already has a pretty generous tax structure and robust public sector investment. The promised “investments” will only go up and can be challenging down the road.
With the promise of more spending built into current programs and the pressure from advocates for additional spending particularly on social service programs, the tax question will hover over this legislative session and in all likelihood will come before voters via the initiative route in the next election cycle. It will be interesting to see where the governor stands if that happens.
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