In his State of the State speech, Gov. Jerry Brown raised the battle flag against an initiative effort to repeal the gas tax he championed. Big business likely will join Brown’s side in that fight—while opposing all taxes directed squarely at business on the same ballot.
Some of the funding to oppose the gas tax repeal measure, should it qualify for the ballot, could come from Brown’s own political funds—he’s sitting on $15 million—some is expected to come from construction union members and construction companies that expect to benefit from the work associated with road repairs. But also look for support to come from business. Major business organizations like the California Chamber of Commerce and California Business Roundtable backed the tax increases in the legislature insisting that transportation fixes were necessary for a healthy state economy. (UPDATE: The California Business Roundtable took a neutral position on the gas tax increase bill in the legislature because no major reforms were included.)
Such a move could put the business community in an interesting and perhaps uncomfortable situation—supporting a tax in one instance that affects the general population while opposing other taxes aimed at the same ballot that directly affect business.
As noted on this page last week, business is already rallying against two tax proposals aimed at the business community, a surcharge on businesses with an annual income of $1 million to raise $17 billion a year and a property tax increase aimed at commercial property to raise an additional $11 billion a year.
Should all three measures make the November ballot—the gas tax repeal and the property tax increase by initiative; the surcharge placed on the ballot by legislative action—business would have to create a finely tuned campaign on why a gas tax is good and why the other two taxes are bad.
Threading the political needle is not the easiest thing to do.
However, the political cards are currently stacked in business’ favor. It is unlikely that all three measures are on the ballot. Both anti-business tax measures are a long shot. The surcharge requires a two-thirds legislative vote to be placed on the ballot. The Democrats no longer control a supermajority two-thirds. They could regain that margin in time to place a measure on the November ballot but presently there appears little appetite to support the surcharge.
The property tax measure, which has yet to receive a title and summary from the attorney general, has a small window in which to gather the necessary signatures to make the 2018 ballot.
Circumstances could change but political timing may prevent business from doing a juggling act in November. Then you will see big business more forthcoming in encouraging Brown’s campaign to fight the gas tax repeal.