With the rising conversation about extending Proposition 30 taxes, I asked state Treasurer John Chiang if he would advise that the taxes be continued. Chiang said that a promise was made that the taxes would be temporary and circumstances would have to change, such as the economy tanking, to justify continuing the taxes.
Chiang spoke to the Town Hall Los Angeles Thursday reviewing his actions as state Controller and reporting that California went from dire fiscal circumstances to the “most robust economic recovery on the planet.”
However, Chiang said that all was not rosy. Even with paying down the debt, he said current debt numbers were higher than historic norms, that public sector health care and pension liabilities were issues that could not be ignored and that affordable housing was important for the state’s economic health.
Chiang joined Assembly Speaker Toni Atkins last week in support of proposals aimed at helping ease the housing crisis. The proposals call for a new fee on real estate transaction recording documents and an expansion of the low-income housing tax credit for builders. In answer to a question, Chiang said he would study if an increase in the property tax homeowner exemption would also aid in home ownership.
As to business property, Chiang did not support a split roll property tax that would tax commercial property differently from residential property “at this time.” However, he suggested reforms could be necessary in the rules on change of ownership of business property.
While the state’s economy recently moved up to be ranked seventh largest in the world and the Fitch rating agency upgraded California’s credit rating to an A+, Chiang warned that a drop in the business cycle could suddenly produce a gap in the state’s finances.
While praising voters for passing the rainy day fund measure in the last election to cushion any revenue shortfalls, Chiang said more must be done to protect California’s economy. He said business regulation must be reduced and the state tax structure must be reformed.
Chiang spoke about an acquaintance who runs a shrimp company who had to deal with four or five government agencies to deal with regulations. That process must be streamlined, said the Treasurer.
I asked Chiang if he had consulted with Senator Robert Hertzberg on his tax restructuring proposal. He said he had not heard from Hertzberg on his bill but Chiang said it was important that the discussion generated by the Hertzberg proposal go forward; that state tax policies needed to be updated.