Five big takeaways from Newsom & Legislatures' surrender on 66% requirement for new taxes
Under pressure from a nascent taxpayer revolt, Sacto Dems chose to advance an initiative that supports the 2/3 voter threshold for local taxes. Lance Christensen of the California Policy Center unpacks the big conclusions.
#1: Polling favored tax relief
“It appears that the polling was strong for Local Taxpayer Act, it had a good chance of passing in its original form. Why? Because Californians are sick of being overtaxed. So it left progressive Dems with a dilemma: They could:
A.) Fight the bigger act, and potentially lose real estate transfer taxes, the 2/3ds threshold, and the sunsetting of key revenue sources, or
B.) Advance a more narrow act, with just the 2/3ds threshold.
They chose B because it is a safer route for them.”
#2: Closing Upland highest priority
“Closing the Upland loophole has been a longstanding fundamental issue for Howard Jarvis. They always felt that the Upland Loophole was judicial activism, and getting rid of it was in many ways Job #1 for California taxpayers.”
#3: Never say forever
“While the state progressives may be giving the 2/3ds threshold a pass this year, I don’t expect them to give up forever. I would not be at all surprised if they choose to fight another day. Progressive proxies--unions or other far left groups—may come back in a few years trying to undo the LTPA.”
#4: Court challenge unlikely
“It will be much harder for the Dems to challenge the new, revised LTPA in court once they have advanced it in the state legislature. Courts defer to legislative decisions, and it would be transparent bad faith to challenge an act that passed with huge majorities.”
#5: A test for SJ’s Mahan and other so-called moderates
“There’s a good deal of cognitive dissonance coming out of Silicon Valley’s political scene. On one hand, there’s a lot of talk about pragmatism and spending money wisely. But these same politicians are completely dependent on steadily increasing revenue sources, whether it’s from new taxes, or from the very favorable ongoing stream of growing revenue from property taxes, as they derive from the sometimes astronomical increases in local property values.
“But this developing taxpayer revolt suggests that authentic pragmatists will have to start getting serious about costs at the city level, and not just keep rummaging around for new revenues. I haven’t seen any city cut costs, it will be a test for Mahan in SJ to see if he means what he says about more accountable local government. Because more accountable means being ready to cut underperforming programs seriously and strategically. “
—Lance Christensen, CA Policy Center
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