State tax increases will steal any credit we might get
Supposedly we Americans will be getting a tax cut beginning April 1. Fitting date for the people of California, because with all the various taxes and fees we’ll soon be getting hammered with, it looks like Stimulus (Porkulus) will be an April Fool’s joke.
…beginning April 1, a 1 cent increase in the state sales tax will cost the average Inland consumer an extra $140 a year or so, based on 2007 taxable retail sales data from the state Board of Equalization. The boost is the first in a series of temporary tax increases approved last month by California lawmakers as part of a $40 billion package of budget solutions to deal with a sharp drop in revenue.
[Above emphasis mine.]
The best legislative trick played on California won’t be until the following month, when during a special election, one of the propositions scheduled for a vote by the people is Proposition 1A, which is officially described as a “RAINY DAY BUDGET STABILIZATION FUND. Reforms the budget process. Limits future deficits and overspending by increasing the size of the state ‘rainy day’ fund and requiring above-average revenues to be deposited into it, for use during economic downturns.”
That’s what we’ll read, that’s what we’ll be voting on.
Not so fast.
What we won’t read, is that tax hikes scheduled to expire three years after passage of this budget will continue an additional two years if 1A is passed.
When the Field Institute’s pollsters surveyed likely voters about Proposition 1A, they read the official summary and found 57 percent inclined to vote for it. When those same respondents were told about the $16 billion in hidden tax effects, however, support plummeted to 34 percent of likely voters.
Schwarzenegger is already campaigning with allied groups to push the spending limit concept and is likely to spend millions of dollars selling it to voters.
Anti-tax groups are looking for an angel – such as billionaire businesswoman and gubernatorial candidate Meg Whitman – to finance an opposition campaign that would exploit the measure’s secret tax effect.
The Field Poll indicates that if they find enough money, killing the measure and undermining the budget agreement is quite possible, even probable.
The “Rainy Day Budget Stabilization and Accountability Act,” was actually written by legislators, specifically Democrat legislators, rather than the Attorney General’s office as it is usually done.
An unlikely coalition of the conservative Howard Jarvis Taxpayers Association and the liberal Health Access California on Monday filed suit claiming that the official ballot language for Proposition 1A on the May 19 special election ballot is misleading.
Bearing the cumbersome title of “Rainy Day Budget Stabilization and Accountability Act,” Proposition 1A limits state spending based on 10-year revenue trends and requires a larger emergency “rainy day” fund to lessen the impact of economic downturns.
It also includes a two-year extension of “temporary” increases in sales, income and motor vehicle taxes that were part of the recent budget agreement between Gov. Arnold Schwarzenegger and the Legislature.
There is no mention of the tax increases in the ballot language that, in a departure from standard procedure, was crafted by the Legislature rather than the Attorney General’s office.
“Voters must be protected from false and misleading statements in official ballot summaries and analysis provided by the government,” said Anthony Wright, executive director of Health Access California. “If this measure can’t be passed without a misleading description, then voters should send the authors back to the drawing board to get it right.”
Sometimes it takes volunteers rather than “billionaire angels”.