More than $20.4 billion a year in higher taxes and fees introduced by state lawmakers

The total could nearly double if a “spot bill” is amended to impose a tax on services

California lawmakers have proposed more than $20.4 billion a year in higher taxes and fees so far during the current legislative session, the nonpartisan California Tax Foundation reported today.

“The proposals cumulatively would represent 14 percent of general fund revenue at a time when California has a record-high budget, robust reserves and an operating budget surplus,” the Tax and Fee Report states.

A $4.2 billion-per-year tax on sweetened beverages (AB 138) is the largest tax documented in the report, which is based on higher taxes, fees, assessments and charges proposed from the first day of the legislative session (December 3, 2018) through today, when the Legislature reconvenes after its summer recess. During this period, lawmakers introduced 2,647 bills and constitutional amendments, including 81 that contained higher taxes or fees.

Another bill states legislative intent to apply to sales tax to some services – a tax increase that could top $14 billion per year – but this fiscal estimate was excluded from the report’s cumulative total because the bill (SB 522, Hertzberg) is in “spot bill” form. The report notes that the tax impact could be significantly higher or lower once the bill is amended with substantive provisions.

In June, Governor Gavin Newsom signed a $214.7 billion state budget for 2019-20 that includes almost $30 billion in reserve accounts, and $13.4 billion in increased spending over the 2018-19 budget. Since taking office, Newsom has signed into law $2.81 billion in additional taxes and fees.

Last year, Governor Jerry Brown signed legislation totaling $200 million in new annual taxes and fees.

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Are California’s schools really ‘starving’ for revenue?

By Jon Coupal | Whenever you see politicians and special interests throwing statistics around like the cafeteria food in “Animal House,” it’s a better-than-even bet that they’re distorting their respective claims about how we fund schools in California.

A weekly column by Jon Coupal

Here are some basics about school financing that every taxpayer should know. First, it’s complicated. K-14 schools get funding from a variety of federal, state and local sources.  (K-14 includes community colleges but not the University of California or California State University).

Second, it should be no surprise that California spends more on education than any other state given our population. But we also spend significantly more per student when all sources of revenue are considered.

Third, the biggest slice out of the state’s general fund pie goes to education. This is due in large part to Proposition 98, a constitutional initiative barely approved (50.7%) by voters in 1988. It requires a minimum percentage of the state budget to be spent on K-14 education and has a complex series of “tests” to determine annual increases in spending. Generally speaking, it requires that at least 40% of the state budget to go to K-14 education. The 40% guarantee is ironclad even though enrollment in K-14 has fallen significantly in recent years.

According to its sponsor and biggest funder, the California Teachers Association, Prop. 98 was the panacea to fix all that was wrong with education. The first sentence of the ballot argument in favor of the initiative, signed by CTA’s president, states “Proposition 98 is a well-thought-out plan for California’s schools to once again be among the very best in the nation.”

To read the entire column, please click here.

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Watch last night’s city council meeting

To watch the nearly five-hour video (4:53), click here.

Fullerton City Council Meeting
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Government compounds insult by cheating on tax collections

By Jon Coupal | It’s bad enough that California taxes its citizens more than almost all other states, but adding insult to injury, government entities often cheat on the way that they collect taxes.

A weekly column by Jon Coupal

This happens in several ways. First, there are times when a government entity knows a tax is illegal but imposes it anyway either hoping no one will notice or knowing they can collect tons of revenue while the issue is resolved in court.  This author’s first experience with governments’ complete disregard of the law occurred 25 years ago in the 1994 case of Hoogasian Flowers v. San Francisco Educational Financing Authority.

In an effort to circumvent Proposition 13’s two-thirds voter approval requirement for special taxes, San Francisco created an entity called an “educational financing authority” for the purposes of imposing a supplemental sales tax. Although the Court of Appeal easily saw through the charade and struck down the tax as illegal, the only remedy that was given was a small refund for the handful of retailers who filed the suit. Thousands of businesses never received relief and the city was allowed to keep millions in illegal tax proceeds.

Taxpayers need to remain aware that government entities at all levels have no incentive to make things easy for taxpayers. Just one recent example involves the L.A. County Recorder’s Office and the implementation of Senate Bill 2, which imposes a $75 tax on documents filed in conjunction with real estate transactions.

To read the entire column, please click here.

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Pensions are being filled ahead of potholes

Pension costs make California agencies ‘do less with more,’ says Berkeley professor’s study

Local government agencies in California are offering fewer services and reducing employees numbers because of rising pension costs.

Median pension costs for local governments in California rose at a rate nearly six times that of local agencies nationwide between 2007 and 2016, according to data released by a UC Berkeley professor. 

Sarah Anzia, an associate professor at UC Berkeley’s Goldman School of Public Policy, released a report compiling data on the pension expenditures of cities and counties across the United States. The report also discusses the impact of rising pension costs on local government budgets and services. 

In a policy brief released in conjunction with the report, Anzia argued rising pension costs, particularly in California, are resulting in the elimination of local government jobs.

“Local government is being transformed by rising pension costs, and as a result, citizens of California can expect a future in which city and county governments do less with more,” Anzia stated. “These changes are also not positive for government employees and their unions, because as local governments spend more on pensions, they are also cutting jobs.”

According to Anzia’s findings, local pension costs rose almost everywhere around the United States, but they increased at a much higher rate in California. Between 2007 and 2016, median pension costs nationwide increased by $1,216 per employee, while they rose by $7,022 per employee among California cities and counties.

Anzia attributes high public sector union membership and collective bargaining as major factors in pensions costs rising at a faster rate in California than across the country. Still nationwide, policymakers have made public employee pensions more generous and have failed to set aside enough money to pay for them, Anzia said.

This article originally appeared at CalCoastTimes.

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California’s surplus is how much?

By Jon Coupal | During a recent meeting with allied organizations concerned about California’s high taxes, the question on everyone’s mind was: why do our political adversaries continue to push for even more taxes given that the state has a huge budget surplus? Also, how much excess revenue is there?

A weekly column by Jon Coupal

But like most questions involving public policy – and particularly those related to fiscal issues – the question quickly begot more questions. For example, what’s the difference between a surplus and a reserve? Also, should we look at just the general fund or should we expand the inquiry to special funds as well?

If one includes reserves from special funds and adds them to the generally accepted figure of the surplus, the answer is stunning. General fund reserves exceed $20 billion and special fund reserves exceed $16 billion. In short, California is sitting on over $36 billion. This doesn’t even include the billions kept in reserve by local governments.

So with all this good news, why do the state and local governments continue to press for ever higher taxes? The answer — which they prefer to conceal from the taxpaying public — is that they know that the bill will soon be due for all the accumulated government debt.

To read the entire column, please click here.

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Fullerton City Hall is closed today for another three-day weekend

City Hall Closure Dates and
Observed Holidays

2019
January –1*, 11, 25
February – 8, 18*, 22
March – 8, 22
April – 5, 19
May – 3, 17, 27*, 31
June – 14, 28
July – 4*, 12, 26
August – 9, 23
September – 2*, 6, 20
October – 4, 18
November – 1, 11*, 15, 28*, 29*
December – 13, 24*, 25*, 26^,27^, 31*

*Holiday observed
^Winter Closure

Fullerton City Hall
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Democrats get SLAPP’d for First Amendment violation

By Jon Coupal | Democrats pay lip service to the First Amendment and claim to encourage political engagement but, in reality, their desire is to silence all views but their own. Last week, a Court of Appeal made them pay for their hypocrisy.

A weekly column by Jon Coupal

In 2017, one of the most hotly contested political issues in California was the imposition of a huge increase in the state’s car and gas taxes. While the effort to reverse that tax increase failed when voters — victims of a highly deceptive campaign — rejected Proposition 6 last year, the political fallout from that tax increase reverberated in other ways.

For example, as a result of his vote for the tax hike, then-Sen. Josh Newman was the subject of a successful recall campaign. That effort was supported by a number of grassroots organizations such as the Howard Jarvis Taxpayers Association and Reform California as well as the California Republican Party.

To say that the Democrats were angry at the recall of one of their own would be an understatement. In retaliation, they arranged for the filing of a lawsuit against HJTA, the CRP and the firm that managed the recall petitions alleging that somehow voters who signed the recall petition were fooled into thinking they were signing a petition for the repeal of the gas tax.

To read the entire column, please click here.

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Watch last night’s city council meeting

To watch the nearly six-hour video (5:50), click here.

Fullerton City Council Meeting
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San Francisco trial court ruling a temporary setback for Prop. 13

By Jon Coupal | Recently, a San Francisco judge upheld the validity of a local special tax that failed to secure a two-thirds vote of the city electorate as required both by Proposition 13 (1978) and Proposition 218 (1996), also known as the Right to Vote on Taxes Act. Both initiatives were sponsored by the Howard Jarvis Taxpayers Association. The lawsuit was brought by HJTA and, after the ruling, it immediately filed an appeal.

A weekly column by Jon Coupal

The harmful consequences of the court’s ruling cannot be overstated. Unless reversed on appeal, a gaping new loophole will have been created in the Constitutional protections for taxpayers that voters have repeatedly ratified over the decades. Moreover, the decision is a green light to tax-and-spend interests to extract even more dollars from the most heavily taxed citizens in the United States.

By way of background, in June of 2018, 50.87% of San Francisco voters voted affirmatively for Proposition C, a tax on commercial rents. There is no dispute that the tax, projected to raise $145 million annually, was intended for the specific purposes of providing child care, early education, and salary increases for preschool teachers in the City of San Francisco.

The less than fifty-one percent of the vote doesn’t cut it. Proposition 13, approved by California voters in 1978, requires a two-thirds vote of the electorate to pass a tax increase for any special purpose. This has been the law for 40 years. It has also been the consistent position of interests often hostile to taxpayer rights. The Legislative Analyst’s Office, California League of Cities, and numerous other local governments have agreed that all local special taxes require two-thirds voter consent.

The basis for the court’s strange ruling, unfortunately, had its genesis in an earlier California Supreme Court case in 2017.

To read the entire column, please click here.

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