Crossposted on Flashreport

As if her job isn’t already hard enough, the task for Assembly Republican Leader Connie Conway got a bit tougher yesterday.  You see she, along with her counterpart, State Senate Republican Leader Bob Huff, are spending a lot of their time convincing potential donors that it if we want to stop tax increases in California, it is critical that enough Republicans occupy each chamber of the legislature to block the two-thirds vote threshold required to raise taxes under the State Constitution.  This pitch, by the GOP leaders, is pretty persuasive — especially when you consider how aggressively Capitol Democrats try to raise taxes.  However, the presupposition of their pitch is that if you have enough Republicans in the Senate and the Assembly, that they will actually vote against tax increases.  Yesterday, a massive billion dollar tax increase passed out of the State Assembly because — you guessed it, it had the support of two legislators who won their offices campaigning on a written pledge not to vote for tax increases — former Republican-turned-independent Nathan Fletcher, and Republican Brian Nestande.

The legislation which passed out of the Assembly by the bare minimum number of votes, 54, was Assembly Bill 1500 by Speaker John Perez.  This legislation, along with a companion bill already passed by the Assembly, would raise a billion dollars of taxes on businesses that have significant sales in California, but which do business in more than just our state.

It is important to note that in some places Perez’s bill is incorrectly being characterized as reversing a tax break granted in the 2009 budget deal.  That is not the case, and I wrote about that here.  That is just spin by Democrats that is reprinted by reporters who don’t take the time to understand the complexities of the issue.  This brand new tax increase would smack a wide swath of companies who did not benefit from the 2009 budget deal with significant tax hikes.  Perez’s legislation calls for this billion dollars of redistributed wealth to then go to provide massive subsidies for college tuition and fees to California students in the state’s public university and community college systems.  Needless to say, the last thing that we need to be doing in challenging economic times is making California a more expensive place to do business for any companies, whether these companies are based in this state, or in another state budget providing goods and services to the people of this state, and who employ people here.

Asm. Nathan Fletcher cleared his primary field in a safe GOP seat publicly pledging to oppose any and all tax increase.

Of course it is not unusual for Democrats to vote for tax increases — they do it all of the time.  Their liberal ideology seems to give them a rapacious appetite to use the government to take property from one group of Californians so that they can they redistribute it as they see fit to another one.  But it is unfortunate that two legislators who both signed and campaigned on a written pledge to the voters of their district to “vote against all new taxes and oppose all efforts to raise taxes” voted for this massive tax increase — Assemblyman Nathan Fletcher of San Diego, and Brian Nestande of Riverside County.  Fletcher campaigned as a strong conservative in a very safe Republican district, clearing the field of any GOP challengers.  Nestande did have a primary challenger, but ran aggressively on the no new taxes pledge that he signed.  Here is one of his campaign press releases from 2008, touting the endorsement of anti-tax icon Lew Uhler.  In the release, Nestande thanks Uhler for his support, saying, “I am honored to have the endorsement of Lew Uhler and the trust he places in me.  Lew knows that I will go to Sacramento with a decisive agenda to balance the budget by reducing spending and NOT raising taxes.” (note the emphasis he places on“NOT”).

The support of Fletcher and Nestande for this massive tax increase is disheartening.  It is somewhat less unexpected from Fletcher who dropped his Republican registration earlier this year shortly after losing the local County GOP endorsement for his ultimately unsuccessful bid for San Diego Mayor.  After that, Fletcher started to reject some of his earlier heart-felt beliefs, including the no new taxes pledge he had signed as an Assembly candidate.

Asm. Brian Nestande beat his primary opponent, touting his signing of a no new taxes pledge.

The support of a billion dollars in new corporate taxes by Brian Nestande is much more problematic.  As I mentioned at the start of this piece, it is certainly a political problem for the Republican Leader Conway.  To make matters worse, Nestande happens to serve as Conway’s number one Lieutenant, as Chairman of the Assembly Republican Caucus.  It is highly unusual for a top person on a leader’s team to “go rogue” on something as significant as this.  (Ed. Note: Nestande has since resigned his position as Caucus Chair.) If Conway didn’t know Nestande was going to vote for the bill, then that seems like a pretty big breach of trust.  If he did inform Conway and caucus colleagues ahead of the vote then we will see if there is any punitive reaction from fellow legislators.  Either way, it is very clear that unlike the 2009 budget deal where several Republicans in each chamber went up on taxes, but with quiet support from many of their colleagues, this play by Nestande was not like that at all.

So now here we sit.  This massive tax increase has passed one chamber and on it’s way to the other.  If there are no changes made to the bill, then it could be up before the State Senate in no time, and if it passes, then it would go to Governor Brown’s desk (where I cannot imagine his wielding a veto pen).  And so now the attention goes to the fifteen Republican in the State Senate.  Speaker Perez would need the votes of two GOP Senators.  So I would certainly encourage anyone reading this to contact any GOP Senators they know, and urge them to oppose AB 1500 and its massive tax increase.

You can remind the Senators that on the policy front, the idea that we should advantage in-state companies by penalizing out of state companies for doing business in our state is preposterous and absurd.  This kind of policy would lead to less supply of services and goods at raised prices for California consumers.  If our legislators want to help California businesses (and attract more to the state), then they should make our own state more business friendly.  It is, frankly, immoral to manipulate the tax code to give a competitive advantage to some companies over others. And ultimately it is the people of our state that lose, as jobs and products become more scarce.

And on the political front, you can remind them that the message that will be used to fight the tax increases on the November ballot is that we are already taxed enough.  A bipartisan passage of this billion dollar tax increase pretty much blows a massive hole in that strategy.