Tax increases, threats to Proposition 13 are still on the table

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Attempts to undermine Prop. 13 protections for California taxpayers or simply to raise taxes and "fees" seem to be gathering steam in Sacramento. Special sessions have been called to deal with transportation and health care funding, and calls for increased taxes are being heard. The proposals include increasing the gasoline excise tax, the diesel excise tax, the vehicle registration fee, the vehicle license fee, taxes on vehicle freight weights, on tobacco and alcohol and a new tax on sweetened beverages.

Two constitutional amendments, ACA 4 and SCA 5 have also been proposed to lower the tax increase threshold from two-thirds, mandated by Prop. 13, to 55 percent. Furthermore, SCA 5 would set up a split roll system leaving Prop. 13 protections for homeowners in place (many think temporarily), while taxing business properties at their full market value, underscoring California’s reputation as one of the nation’s least business-friendly states.

As constitutional amendments, votes on ACA 4 and SCA 5 may be called at any time, before this year’s session ends in September or after the Legislature reconvenes in January. Approval requires a two-thirds majority in the Legislature, and subsequent approval by the voters. Fortunately, given the fact that the pro-tax super majority was abolished by the voters in last November’s election, passage seems unlikely at this time.

Even so, efforts to gather petitions to place tax increase initiatives on the ballot are already being discussed. Should these efforts prove successful, voters will be asked to decide whether California’s taxes, already among the highest in the United States, should go even higher.