Fires roared out of control across California. Pictures of heroic firefighters battling the blazes appeared on the nightly news and in the newspapers. As it so happened, the fires occurred just a week prior to Californians voting on a measure to raise the state sales tax a half-cent, the revenues to be distributed to local governments for public safety purposes.
This occurred in 1993. In a special election called by Governor Pete Wilson, the voters considered the fate of Proposition 172. The measure was little noticed by the voters until the firestorms hit. A campaign ad in support of the measure was hastily thrown together showing the firefighters standing against the blazes. The tax measure passed with 58% of the vote.
Today as thousands of fires sweep across Northern and Southern California the discussion of fires and taxes is intertwined again. The question is: Will the fires of 2008 lead to tax increases?
Governor Arnold Schwarzenegger has proposed what he terms a fee on property insurance to be set aside for fire protection. The governor’s proposal would charge policyholders a 1.4 percent surcharge in high fire zones and a .75 percent surcharge in other areas of the state. The fee would raise about $125 million.
Whether the governor’s proposal is a fee or a tax will probably be settled by a court. However, reflecting upon the special election and fires of 1993, one wonders if the stories and pictures of the current fires will move the people to support a fire fee/tax as they supported Proposition 172?
Moreover, will the fires bring additional sympathy to capture a larger tax increase to deal with the budget deficit above and beyond setting aside revenue for fire fighting?
I expect we will hear that argument made.
There are differences between 1993’s tax measure and any potential revenue enhancers that could result with the backdrop of the 2008 fires. The voters of 1993 did not raise a tax as much as they continued a sales tax that had been put in place after the 1989 Loma Prieta earthquake, which was about to expire.
Proposition 172 was also sold as a way to make local governments whole after the governor and legislature ordered local officials to shift property taxes to a special education fund to ease the pressure on the state to fully fund schools. The Prop 172 money was dedicated to local public safety services.
In that way, the Prop 172 money was part of the plan to balance an unbalanced budget that year. Something similar could happen again. Expect some lawmakers to suggest that because of the fires a tax increase is necessary. And, that increase could be more than just for the purposes of fighting fires. The fires have hit the state’s resources hard, the argument will go, and because of the budget deficit, more taxes are needed. If the legislature and governor put that tax increase on the ballot then the voters get to decide and it only takes a majority vote, unlike the two-thirds vote needed to raise taxes by the legislature. And legislators know that if the voters make the decision at the ballot box then the legislators can’t be blamed for raising taxes, can they?
You can imagine a campaign ad that shows the fires being put down as an announcer asks for your Yes vote on the ballot measure.
What’s that saying about history repeating itself?