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Feb 16, 2003
by Alexa H. Bluth, Bee Capitol Bureau
Ballot budgeting considered
Democrats say voters may be needed to do what lawmakers won't.With lawmakers seemingly hopelessly locked in a battle over tax increases, some Democratic leaders and interest groups say they may ask California voters to boost taxes to help fill the state's multibillion-dollar budget hole.
It's a strategy that is gaining popularity nationwide as states grapple with shortfalls and face deep cuts to schools, health care and programs for the poor. But it also has some Republicans and anti-tax groups fuming at what they call an attempt to budget by ballot.
In California, state worker unions, consumer advocates and law enforcement groups are among those considering ballot measures to raise taxes on everything from corporate property to smokers to the wealthy.
Democratic lawmakers, meanwhile, who call it impossible to address the $26 billion to $35 billion budget shortfall without raising taxes, aren't ruling out a try at the ballot box to sidestep steadfastly anti-tax Republicans.
"We haven't been successful here, so maybe we should leave it up to the voters," said Assemblywoman Sarah Reyes, D-Fresno. "But it doesn't speak well for us doing our job."
Gov. Gray Davis in January proposed a shift of many programs to cities and counties, and a raft of cuts and tax increases, including a 1 percent sales tax increase, an income tax increase for the state's top earners and a $1.10 per pack cigarette tax hike.
Democratic legislators - unhappy with a Davis proposal to cut $4 billion that the state sends to local governments - are pushing for an increase in the vehicle license fee. They've also proposed a variety of bills that would boost taxes on products from diapers to beer.
Republican lawmakers, however, promise to block any tax-raising plan. Despite their minority status in both legislative chambers, Republicans would have to provide votes to approve a budget and tax increases by the constitutionally required two-thirds margin.
"Given some of the lines in the sand that our colleagues on the other side of the aisle have drawn, we need to consider a number of tracks to ensure a balanced solution to the problem," said Assemblyman Darrell Steinberg, D-Sacramento. "A ballot measure is one of them."
The Assembly Republicans' budget point man, John Campbell, called the idea of leaving tax increases up to voters "ridiculous."
"We are a representative government, and we are supposed to work these things out. That's why they elect us," said Campbell, R-Irvine.
Republicans have long blamed Davis and the Democratic Legislature's spending policies for budget woes and say that tax increases are unnecessary. Plus, Campbell said, lawmakers would be shirking their duty if they ask voters to fix the state's damaged fiscal health.
"The budget is an enormously complex issue that a person with a job and a home and a family doesn't have the time - nor should they - to understand," he said. "I think it's enormously bad policy to budget by ballot."
A flurry of recent private polls have sought to explore voters' willingness to support tax hikes to avoid deep cuts to schools, health care and programs for the elderly.
Wayne Johnson, president of the California Teachers Association, said his group's polling and focus groups have shown voters would approve a tax increase if the revenue were earmarked for classroom improvements, including teachers' salaries.
"We're going to start moving in the direction of some public school funding initiative," Johnson said, noting that such an effort would not be on the ballot until 2004 at the earliest. "You're never going to get a funding increase out of the Legislature. It's not going to happen."
Lenny Goldberg, executive director of the California Tax Reform Association, said his group and several others also doubt that Democrats will be able to lure the Republican votes.
"I would, at this point, cast my lot with a majority vote of the people before I would with two-thirds of the Legislature," Goldberg said.
Voters could be asked to reinstate the top income tax brackets or periodically reassess commercial properties to pump more money into the state treasury.
Also on the radar is a different approach: Asking voters to change the California Constitution to scrap the two-thirds requirement and ease the way for lawmakers to boost taxes.
California's Foundation for Taxpayer and Consumer Rights wants to band together with other groups to change commercial property tax rules, particularly to spare health care programs targeted for deep cuts in the Davis budget. The group is pointing to Los Angeles County voters' fall approval of a 3-cents-per-square-foot tax on any property improvements to spare Los Angeles County's trauma system from financial collapse.
"Now that we know it's possible to direct a tax that's specific and purposeful, it's going to open all sorts of new doors," said the foundation's Jamie Court.
Davis hasn't ruled out the possibility of trying to ask voters for tax hikes, "but he absolutely believes the job is his and the Legislature's," said spokesman Steve Maviglio.
Lawmakers could vote to place a constitutional amendment before voters to raise revenues, but that would also require a two-thirds vote in both houses.
More likely, an outside group or coalition of groups would launch a ballot drive. There are two types of initiatives that can be placed on the ballot by outside groups: a statute revision, which would require roughly 400,000 signatures to qualify, and a constitutional amendment, which would require 600,000.
Voters in California have been asked in the past to raise taxes - with mixed results. In 1992, for example, voters approved a half-cent sales tax increase for local public safety but rejected a 1996 measure to reinstate 10 percent and 11 percent tax brackets for the wealthiest residents to help pay for schools and local governments.
A Field Poll last year found voters open to the possibility of certain tax hikes, namely higher income taxes for top earners and tacking on to the price of cigarettes or liquor.
"That poll basically says that socking it to the rich is the most popular," said Field Poll Director Mark DiCamillo.
Voters said they were most averse to a hike in vehicle license fees, he said. But he said budget-weary voters might warm up to the idea of raising taxes because of the crush of dismal economic news and warning of drastic cuts to police, hospitals and schools.
"There's all these dire warnings now being issued at every level of government," DiCamillo said. "The public is bracing itself."
Tax measures in other states within the past year have been met with reluctance.
Oregon voters in January defeated a proposed income tax increase for most residents that lawmakers said would have spared the state from making devastating cuts. The defeat came just months after Oregon voters approved a 60-cents-per-pack cigarette tax, with a portion of the funds dedicated to tobacco prevention.
"They had ... all kinds of groups band together to push this thing, but people remain skeptical. I imagine any kind of tax increase would be a similarly tough sell in California," said Portland pollster Tim Hibbitts.
A Washington state measure that failed in November would have raised gasoline taxes to help pay for transportation projects.
Still, the leader of a group that tracks national ballot measures said states are desperate to find ways to fill shortfalls.
"I have no doubt that you are going to continue to see lawmakers going to the people asking them for more money," said Dane Waters, president of the Virginia-based Initiative and Referendum Institute.
Voters are more likely to accept taxes when they are dedicated to a specific area, Waters said.
"The political reality is ... that voters are going to be very hesitant to increase taxes unless the voters can see specifically where that money is going to go," Waters said.
Ballot battles California voters over the past 25 years have given mixed reviews to a series of ballot measures to raise, cut or change their taxes.
1978: Proposition 13, placed strict limits on increases in property taxes. Approved.
1988: Proposition 99, imposed a 25-cent surtax on cigarettes and other tobacco products to raise money primarily for health programs. Approved.
1992: Proposition 163, repealed the "snack tax" and limited the taxation on certain food items. Approved.
1992: Proposition 167, a sweeping measure to increase taxes on top earners, corporations, banks, insurance companies and oil producers, amend Proposition 13 to assess nonresidential property taxes more often, and reduce sales taxes and provide renters tax credits. Rejected.
1992: Proposition 172, imposed a half-cent sales tax increase for local public safety. Approved.
1996: Proposition 217, to reinstate 10 and 11 percent tax brackets for the state's highest earners, with the money directed for schools and local governments. Rejected.
1998: Proposition 10, imposed a 50-cent surtax on cigarettes and other tobacco products to pay for early childhood development programs. Approved.
Sources: Department of Finance, California Taxpayers Association, The California Tax Reform Association
The Bee's Alexa H. Bluth can be reached at (916) 326-5542 or email@example.com. Bee Deputy Capitol Bureau Chief Dan Smith contributed to this report.
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