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Jon Fleischman

CEQA Reform: Good Idea. At The Cost Of A $Billion Tax Hike – NO WAY!

All of the talk in the Capitol is that a deal is afoot.  That the cosmic forces of the world are coming into alignment.  Translation — the taxpayers of California had better watch their pocketbooks!

It is important that you read Assemblywoman Diane Harkey’s column on the FlashReport today.

A quick reminder — Democrats do not need Republicans to cut any deals — with one big exception.  Still (barely) out of reach of the ever-greedy hands of the majority party is the two-thirds vote protection in the State Constitution to raise taxes.  So let’s be very clear — any deal that Republicans strike with Democrats by definition includes a tax increase.

The problem is that Republicans can (and do) cut deals in good faith, and then Democrats reneg on them.  I wrote an entire column on Monday which went into great detail on many of the handshake deals that were subsequently undone.  And in almost every case, to get the deals in the first place Republicans put up votes for tax increases, fee increases, or bonded indebtedness.  Oh, and when the Dems renege, none of the tax or fee hikes or borrowing get reduced.

Reforms of the California Environmental Quality Act is needed (I would actually vote to repeal it all together, if I had a vote).  A large coalition of folks have come forward advocating for comprehensive reforms to bring some sanity to development in this state.  That’s all fine, except no one in the Capitol is naïve enough to think that the majority party in the legislature nor Governor Brown are going to sign off on CEQA reform (a “get” for Republicans) without some sort of trade off, which in this case will be the passage of legislation to change the way business income taxes in the state are computed to result in a next billion dollar tax hike (this requires a two-thirds vote, hence the need to horse-trade).  I wrote on what this tax increase it terrible public policy here.

Some of those pushing the CEQA reforms are just looking for the legislature to adopt some common sense changes to what is bad policy.  But there are some bad actors out there who have as a primary or co-equal goal the hiking of business taxes on their competitors, which is shameful.

Principled Republican legislators need to make a very clear (and non-instinctual) stand here — which is to refuse to vote for this CEQA bill unless and until 15 Republican State Senators sign a joint letter opposing the billion dollar tax hike (it’s game, set match in the Assembly).  Until you actually see that happen, there is really no guarantee for any conservative in the legislature that by voting for the CEQA reform package that you aren’t being played for a patsy as a couple of Republicans use the CEQA reform vote as an excuse to “consummate a deal” and hike taxes.

Speaking of the Republican State Senators — I have yet to hear that a single one of them has said that in return for temporary CEQA reform (remember, you have to figure it will get repealed next session, early) they would hike a billion dollars in taxes.  But stranger things have happened.

Oh, the rumor mill swirls around with all kinds of unsavory stories.  My favorite two — neither of which I believe, but have been shared with me as speculation many times over — are that Senator Tom Harman will vote for the deal because he wants to be appointed to the Superior Court bench in Orange County, and that the new non-profit foundation being started by Senator Sam Blakeslee might get a big donation from a major California corporation if he goes up on the taxes.  Frankly, I know both of these men, and I don’t think either would do that.  But I don’t blame people for talking about it.  After all in 2009 a small group of GOP legislators went up on taxes and half of them did get lucrative appointments.

I will close with a reminder that we are less than three months away from a critical election.  On the ballot will be not one, not two, but three major tax increases.  The clear Republican message that will win the day is that Californians are already over taxed, and that that state government can’t be counted on to wisely spend the money it already has.  Consider how much our winning message for November is mucked up when the press (and they will) makes a big deal about “bipartisan support” for a billion dollar tax increase?  Suddenly its not that taxes are too high, but rather just some taxes are too high.

I know it is difficult, as Republicans, to always have the defensive team out on the field.  But for now, that IS the job.  The saying is that “All that is necessary for evil to triumph is for good men to do nothing.” — our modified version goes like this: “All that is necessary for evil to triumph is for conservatives to vote out CEQA reform before rock-solid, public assurances are given by 15 GOP Senators that any tax hikes coming their way are dead on arrival.”