WaterUpdate 2: Top 5 Taxes You May See on the 2016 Ballot

 

Joel Fox, editor of Fox & Hounds and president of the Small Business Action Committee, recently updated his list of the tax increase measures that might be on the November 2016 ballot. This update was prompted by an answer to a question Senate President Pro Tem Kevin de León gave to Comstock’s Magazine. The pro tem was asked where he stood on the change to Proposition 13 to separate commercial property from residential property. De León responded that he had no position on the plan at present but added: "I do think that revenue enhancement measures deserve a very serious debate, whether it’s a continuance or some variance of Proposition 30 or some other proposal." While the Legislature gets together this week with the opportunity to have that debate, most likely any tax measure on the 2016 ballot will come via the initiative process. However, what will be discussed most heavily is not necessarily what will appear on the ballot for voters to decide in 2016.

Here's the list of tax measures that might appear on the November 2016 ballot:

OIL SEVERANCE TAX 

As reported previously, whether the oil severance tax initiative moves forward depends on one man – hedge fund billionaire and NextGen president Tom Steyer. Recently, Steyer took the focus away from the oil severance tax and held a press conference supporting a bill for more transparency about oil company revenues. During the press conference, he suggested if the Legislature did not act on a transparency bill he may take one to the ballot via initiative. While Steyer certainly has the ability to attempt more than one initiative at the same time, history shows that doesn’t always work out so well. (See John Van de Kamp 1990.) With the potential of other tax measures on the ballot, there seems to be less emphasis moving forward with the oil severance tax. It barely hangs on the list at number 5.

While Sen. Bob Hertzberg’s plan was mentioned in previous columns, it was never ranked. However, as Hertzberg works to build support for his plan, which he says will tie the tax system more closely to the current state economy, the idea of many different taxes potentially appearing on the ballot may present an opening for Hertzberg. He could argue that his answer to California’s tax system flaws is a better overall fix than other proposals. And, remember, he also has potential financial support from Nicolas Berggreun’s Think Long Committee.

The grassroots/public union effort to push a split roll is still ongoing. Whether the big money is ready to commit to this approach is uncertain. Since the last rankings a second property tax surcharge on all properties that are assessed on the property tax rolls at $3 million and more has been filed. While this measure doesn’t seem to have the support to move into the top 5, it complicates the split roll position. Some have suggested that the split roll is being pushed to convince the school establishment that any tax measure that reaches the ballot should provide for more than schools. Whether for leverage or an earnest effort to achieve a split roll property tax, there is a decent chance the measure will be filed.

The cigarette tax holds in the second position although it is clawing to gain the top spot. An initiative has already been filed. However, there will be a lot of talk in the Special Session on Medi-Cal reform perhaps including a cigarette tax increase to help fill the Medi-Cal funding hole. If the legislative session ends with no cigarette tax increase, the chance that such a tax will make the ballot probably jump this one to number one.

Extending or slightly changing Prop 30 and continuing it holds the top spot because many supporters of a tax increase believe this type of measure may be the easiest one to pass. However, when the Public Policy Institute of California asked likely voters in May if they supported the extension of Proposition 30, 46 percent said yes, 30 percent said no. Not strong numbers. But all you need to know about a Prop 30 extension remaining the most likely tax measure you’ll see on the November 2016 ballot is the answer Sen. de León gave above. Instead of talking about a change to Prop 13 when questioned, he specifically cited the possibility of continuing Prop 30. At this time it remains number 1.