Jerry Brown made the Republican legislators relevant again. Brown’s call for special sessions for transportation and Medi-Cal funding invariably brings talk about possible tax increases. With a two-thirds vote needed to raise taxes, and the Democratic majority shy of the super two-thirds mark, Republicans must be part of the conversation.
Despite their best efforts offering innovative approaches to some of California’s difficult problems during the legislative session, the Democrats on major bills and the budget that needed simple majority approval mostly have sidelined Republicans. But that will not be the case when revenue solutions are sought and debated during the special sessions.
According to the governor, the special sessions are about permanent revenue sources to bolster transportation infrastructure and Medi-Cal. While Republicans put forward plans to use current revenues to satisfy funding concerns for the roads, much of the talk will focus on tax and fee increases. Republicans have said no to the need for new taxes since the state is awash in new money. Even post budget signing, the Legislative Analyst’s office reported the state brought in a half-a-billion dollars more that the budget anticipated.
(As an aside, Republicans may have already supported a tax in their road funding proposal depending on how a court rules. One Republican suggestion is to use cap-and-trade funds recently put on gasoline production to fund transportation. The California Chamber of Commerce has gone to court claiming cap-and-trade amounts to a tax. If the Chamber suit is successful part of the Republican transportation package is a tax.)
Republicans position on taxes will also be tested in any Medi-Cal fix. One of the leading proposals to fund Medi-Cal is to increase the tobacco tax. If the governor is searching for a permanent revenue source to fund Medi-Cal, tobacco tax seems a poor choice. The tobacco tax is a diminishing resource as fewer people choose to smoke. Increasing the tax on smoking is supposed to discourage the practice thus limiting future revenues. Relying on the tobacco tax to rescue the Medi-Cal program would seem short sighted given the governor’s stated goal.
Given the need for Republican votes for tax plans, Republicans are in the middle of the debate and can offer savings ideas and plans re-directing current revenues that cannot easily be dismissed by the majority. If the GOP simply gave in to raising taxes then the issue of Democrats needing a supermajority is moot. Republicans will use their leverage to be deeply engaged in any solutions.