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Rank-and-File Dems Push Tax Hikes Despite Leaders' Opposition

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(Sacramento, CA)
Thursday, May 2, 2013

Look at the proposed tax increases targeting specific industries at the Capitol this year:

  • Sen. Noreen Evans (D-Santa Rosa) is proposing an oil severance tax, with the money going to state parks and higher education. "Why would we continue to give away our state's resources to oil companies making enormous profits?" she says.
  • Sen. Bill Monning (D-Carmel) is calling for a one-penny-per-fluid-ounce tax on soda, energy and sports drinks to fund childhood obesity prevention.  "It is my intent that SB 622 would increase the cost of sugary drinks with the tax being passed along to the consumer," he says.
  • Sen. Kevin de León (D-Los Angeles) wants to add a $2-a-pack cigarette tax for smoking prevention, cessation and treatment.  "We should be the leader in the nation when it comes to a tobacco tax rate," he tells a crowd of supporters at a rally for his bill.

The oil and soda taxes each passed committee votes this week - on the same day supporters rallied for the tobacco tax measure, which is scheduled for its first vote next week

In putting these measures forward, the three Democrats are doing something expressly opposed by Governor Jerry Brown and their own Senate leader, Darrell Steinberg.  The governor's office says Brown's campaign position of "no new taxes without voter approval" still applies.  And this week, Steinberg reiterated that this is not the year for new taxes: "On the merits," he told reporters, "I support a lot of these things.  That's a different question from whether or not in 2013, tax measures ought to move through the process."

Anti-tax advocates are cautiously relieved - at least for the time being.  "It might just be a stopgap towards a bigger push next year.  And while we're certainly encouraged, we still believe this stuff's gonna be coming down the pike at some point," says David Wolfe with the Howard Jarvis Taxpayers Association.

Democrats now hold two-thirds supermajorities in the Senate and Assembly - something they lacked for years.  That's enough not only to pass tax increases.  It's enough to override potential Brown vetoes, meaning the governor's no-tax pledge might prove irrelevant.

Legislative leaders "follow the will of their membership," says former Democratic State Senator Deborah Ortiz.  "And if there is a strong two-thirds vote among their Democratic caucus, they have to balance that interest - respecting the governor, being a partner with the governor.  But then, if their membership says to them, we want this, and there's two-thirds, then that's a whole 'nother variable."

Even if the tax increases fail this year, there are still several reasons Democrats might push them in the face of their leaders' opposition.  First, they might believe the bills are good policy.  Second, they get exposure and media attention.  And third, they could lay the groundwork for passage in the future.  Ortiz knows that.  She authored previous soda and tobacco tax measures that stalled in the legislature several years ago.  "We just have to think about this as a process that may play out a little longer than what we have before us today," she says.

For now, each author hopes his or her bill will get a fair hearing on its merits, although business groups have already labeled two of them "job killers."  "Those three letters, T-A-X, have such a negative connotation for a whole variety of reasons nationwide, that once you get suckered into this - mired, I should say - into the trenches, it's very difficult to get out," says De León.

In the end, De León says it'll be a legislative "leadership decision" whether his tobacco tax moves forward or not.  That may well be the case for the oil and soda tax measures as well.

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