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Tax hikes without a vote? A back door to new revenue

There’s plenty of reasons for progressives to hate California Forward’s do-gooder “government reform” ballot measure that may yet find its way toward appearing on the November ballot. It contains a built-in spending cap, upsets the balance of power between the Legislature and the Governor, and diverts state-generated revenue from the general fund.

But there is one provision in the ballot measure that progressives should love: a back-door way to raise revenue without a vote of the people or even the Legislature.

According to a confidential counsel opinion circulated in Sacramento this week, there’s a provision in the measure for “Community Strategic Action Plans.” According to the ballot language, if the participants in this Action Plan identify a state law or regulation that impedes progress toward their community goals, they can propose an alternative way of achieving “the policy and purpose” of the statute or regulation. That could include raising taxes. And unless both houses of the Legislature disapprove the alternative within 60 days, it automatically goes into effect. No approval by voters required.

Who determines what the policy and purpose of the state law is?  According to the memo, it’s whoever is writing the local Action Plan.

This sweeping new power applies to statutes and regulations that “govern the administration of a state program that is financed in whole or in part with state funds.” Since that describes much of what local governments (including school districts) do, that’s not a very high bar.

How could that authority be used?

–Since state law governs how a change of ownership in real property is determined, this new power could apparently be used to change the rules for reassessing commercial property — the so-called “split roll” — that Assemblymember Ammiano and others have been trying to accomplish for years. No state or local vote would be required.

–State law also limits the amount of local debt school districts can incur. A local Action Plan could lift this limit allowing school districts to sell more bonds and increasing the amount of property taxes they collect to repay the debt. No vote would be required for previously approved bonds.

–California’s personal income taxes are currently only levied by state government. But an Action Plan could authorize a regional governing entity to establish such a local income tax which, under Prop 218, could then be levied by local majority vote.

None of these would run afoul of the new 2/3 vote limitations in Prop 26 because none of them are a “change in state statute.”

All of this amounts to a dream come true for progressives, and why this measure deserves another look by those who might be inclined not to support it. Just don’t tell the Flash Report or the business interests bankrolling the measure. Something tells me they might be a wee bit surprised about what they have wrought.


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