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Richard Rider

The consequences of “simple majority” tax increases

Here’s my U-T SAN DIEGO op-ed criticizing the CA State Supreme Court ruling that may allow local tax increases to be passed with a simple majority vote. It’s one of those “pro and con” formats with an op-ed representing each side.

I encourage those who agree with me in this crucial matter to make comments NOW on the U-T website (if you have access) — I’m sure my opponent (a labor union-funded functionary) is doing the same thing with his legions of union members. Also feel free to comment on my OPPONENT’S pro-tax op-ed at:

http://www.sandiegouniontribune.com/opinion/commentary/sd-utbg-tax-initiative-ruling-20170906-story.html

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Court ruling on tax increases benefits labor unions

RICHARD RIDER

That includes cities, counties, school districts, water districts, transportation districts (SANDAG) and many other government agencies. And if — as the ruling indicates — there’s only a simple majority vote required for such a tax to pass, the vast majority (90 percent-plus) of these initiatives will become law.

But the court said “citizen initiatives.” How can governments put such measures on the ballot? Simple. The public employee labor unions will do it for them. Amazingly, the court thinks such special interest groups constitute “citizen” efforts.

But none of the proposition language will admit this primary reason for the tax increases. Each prop will claim it’s “for the children,” or clean air, or to fix the roads, or “public safety.” Anything except pensions. But in truth it’s almost always for (usually in large part) the public employees’ compensation.

The ruling doesn’t affect statewide taxes. Propositions for state taxes and bonds already require only a simple majority vote. But perhaps our Supreme Court judges are feeling uncomfortable about the financial pressure to switch all state and local employees from their wonderful, guaranteed pensions to 401(k) plans commonly found in the private sector.

The first wave of tax increases will likely be parcel taxes and sales taxes. But with the latest push to tax our drinking water, the number and types of possible tax increases seem almost unlimited.

Experience tells us that the proponents of each tax increase will usually outspend opponents by 100-1. Plus politicians — who won’t directly put such measures on the ballot — are free to use their resources (including their staff) and bully pulpits to campaign for such tax increases (the law notwithstanding). But most important, the public employee labor unions have war chests of money to spend on such campaigns — plus an army of union member volunteers.

It’s for these reasons that the two-thirds vote requirement is so important. It does not stop such tax increases — indeed, many if not most of such measures on local ballots now pass with a two-thirds majority. But with a simple majority, it will be front-page news when such a tax does doesn’t pass.

It’s not like Californians are undertaxed. Not hardly! Our top state income tax rate is an astonishing 34 percent higher than the second-highest state. We have the nation’s four highest income tax brackets! Our California statewide sales tax is the highest in the nation. Our “fees” are triple the national average. Next year we’ll again have the nation’s highest total gasoline tax.

The lament by the tax grabbers is that “Proposition 13 is the problem. It starves local governments.” Wrong. For every dollar of property tax collected in San Diego County the year before Proposition 13 passed (1977), we now collect $9.42. Even after adjusting for both population growth and cost of living increases, property tax revenues today are significantly higher than before Prop 13 passed. Indeed, the median California residential property tax bill (not the rate — the bill) is 93 percent higher than the average for the other 49 states.

Fortunately there is a remedy. Another state proposition will need to be put on the ballot to reinstate the two-thirds majority threshold for such taxes. It needs to be airtight, so there’s no rush to submit a hastily prepared measure. And ideally it is retroactive, to overturn the slew of initiatives that will be passed with that simple majority vote before this “Save Prop 13” initiative can be voted on by the electorate (probably next November).

I’m confident such a sensible measure will pass. Most Californians have little desire to pay higher taxes. And most of the new taxes will be regressive (like parcel and sales taxes), something our liberal electorate is not going to like. We do indeed live in interesting times.

Rider is chairman of San Diego Tax Fighters.