As reported in yesterday’s Los Angeles Times, Governor Jerry Brown speaking to a labor group in Sacramento “reached back in time to criticize GOP lawmakers for blocking his proposal to extend a temporary sales tax in 2011 to help mend the state’s ailing finances.” Ironic that he should choose the labor forum to make that assertion since it was labor who stood in the way of a possible compromise that would have allowed taxes on the ballot.
The governor was negotiating with Republicans to get the necessary votes needed to extend the tax increase. A number of Republicans were interested in going along if reform measures were included in the package. Five GOP senators talking to the governor sought spending, pension and business reforms to accompany the tax continuance measure.
As I wrote at the time, there was an impasse in negotiations because the public unions did not want the reform measures.
So lets tell the whole story, governor.
Marrying reforms with tax increases during the fiscal crisis was the way to set up a solid foundation for the state’s finances. At the tail end of the Schwarzenegger administration, I supported the measure that continued tax increases for two years but also established a rainy day fund.
That measure lost and we ended up with a much longer temporary tax under Proposition 30 with no reforms.
In fact, according to the L.A. Times news report on the governor’s speech, Brown went on to say that opposition to continuing the temporary tax led to Proposition 30. Recall that the campaign against Prop 30, which I was a part, emphasized that reforms were needed before taxes were put in place.
So now we have Prop 30 and the question is what happens when the temporary taxes end. Gov. Brown probably gave an indication of what might happen when he told the labor audience that Prop 30 hit on the magic formula for raising taxes. “Brown also boasted that Proposition 30 was approved by voters because 99% of the people who cast ballots knew they didn’t have to pay the tax increase.”
Expect efforts to continue the Prop 30 taxes and/or to seek new taxes with cries of taxing the rich or taxing business. Notice the conjunction and/or – I think there will be more than one effort to raise taxes, probably on the 2016 ballot.
All ready, school superintendent Tom Torlakson said that the Prop 30 taxes should be extended. There will also be calls to tax corporations.
With the Education Coalition recently telling a Senate budget subcommittee that an estimated $36 billion is needed for education you can bet that taxes will be on the table.
But where are the reforms on pension and spending to protect the taxpayers and create a tax system that would promote growth?