News & Politics

Is Another Tax Revolt Brewing in California?

As we approach the 39th anniversary of passage of the landmark California ballot initiative Proposition 13, another tax revolt is brewing in the Golden State that may be even more significant.

Prop 13 limited the amount that homeowners had to pay in property taxes — a revolutionary idea at the time which set off a prairie fire of tax cutting across the country and in no small way contributed to the election of Ronald Reagan.

But as recently as last year, it appeared that the idea behind Prop 13 in California had died. Many liberals celebrated the demise of a ballot initiative that they say “destroyed” California.

Sacramento Bee from November 2016:

The state that fired the first salvo in the tax rebellion has undergone a massive socioeconomic and political evolution since then and may be on the verge of surrendering as its voters embrace billions of dollars in new taxes.

Last week, California voters approved an extension of surtaxes on the state’s highest income residents, first adopted temporarily in 2012, that Brown – no longer a “born-again tax cutter” – proposed to deal with a state budget crisis.

Even though the budget is now balanced, and may not need the extra taxes to remain so, voters approved the extension (with Brown remaining officially neutral) that could generate $100 billion-plus over its 12-year life.

In fact, California voters approved 80% of the hundreds of tax hikes on the ballot that year. And next year, or perhaps in 2020, liberals will go for the gold and attempt to repeal Prop 13 in its entirety.

But that was last year. Last week, the California legislature approved a gigantic $52 billion transportation bill that increases the gas tax as well as registration fees for cars. On November 1, gasoline in the state will cost 12 cents more — 20 cents for diesel (which pleases truckers to no end).

Not one new foot of highway will be built with this $52 billion. Instead, the money will go to fix potholes, repair bridges, and expand mass transit.

Of course, all of this has enraged California voters — and a revolt is brewing at the grassroots level that may revive the tax cutting movement in the state.

Washington Times:

What has Mr. Allen fuming is that lawmakers pushed through the largest fuel tax hike in state history without bringing it before the voters. Instead, they cobbled together a two-thirds vote in both houses of the Democrat-controlled Legislature with no votes to spare.

Only one Republican — state Sen. Anthony Cannella — voted in favor of SB1, and that was after his Central Valley district received $500 million for a commuter rail extension and completion of a parkway to the University of California, Merced.

“The California voters were absolutely left out of the loop,” said Mr. Allen. “There was certainly not substantive buy-in from the California people, who, according to all of the polling data, are overwhelmingly against raising gas taxes.”

In Fullerton, three Southern California radio talk show hosts kicked off a campaign Thursday to recall state Sen. Josh Newman, a first-term Democratic legislator who barely edged out his Republican opponent in November, in retaliation for his vote.

“That’s the only thing that works, is to take one of their team members out, politically,” said Ken Chiampou, who hosts with John Kobylt “John and Ken” on KFI-AM in Los Angeles. “If there’s no consequence, no punishment, then they’re going to keep right on doing this crap.”

The Los Angeles hosts, joined by Carl DeMaio of KOGO-AM in San Diego, drove home the point by launching their recall campaign at an Arco gas station.

They were backed by Jon Coupal, president of the Howard Jarvis Taxpayers Association, who announced the formation Thursday of Californians Against Car and Gas Tax Hikes in order to target Mr. Newman, whose Senate District 29 is based in Brea.

“For years, the state has been diverting gas tax revenue away from roads, only now, with this massive 43 percent tax increase, are they promising to fix them,” Mr. Coupal said in a statement. “We have heard this before, but the only thing Californians can count on is higher taxes.”

The organizers are no strangers to ballot fights. Mr. DeMaio was instrumental in placing pension reform before San Diego voters in 2012, and “John and Ken” fueled the 2003 recall of Democratic Gov. Gray Davis.

Speaking of “mass transit,” whither California’s high-speed rail project? Governor Brown sent a letter to President Trump asking for a waiver on environmental paperwork for the project, which will probably be forthcoming since the feds have issued waivers for other California road building.

But whether the boondoggle bullet-train project is built or not, Californians are faced with this massive increase in the gas tax. They are already paying more for gas than any other state except Hawaii and will now be asked to shell out hundreds of dollars a year more so that politicians can have the potholes in front of their estates fixed.

The biggest obstacle to repealing the bill via referendum is that the hard, flinty middle class that led the charge against the property tax in 1978 have been leaving the state in droves:

California voters have a history of turning against their state leadership. They ignited a national tax revolt by passing Proposition 13 in 1976 and stunned the Democratic establishment by turning out Mr. Davis over an energy crisis and an increase in vehicle licensing fees.

Since then, however, the state has undergone a political shift to the left as middle-class residents leave for less-expensive pastures, raising doubts about whether California has enough feisty anti-tax voters left to upend SB1.

“The state has drifted leftward in the past decade, so the prospects for another tax revolt are questionable,” said John J. Pitney, a politics professor at Claremont McKenna College. “But if the economy goes down or gas prices shoot up, anti-tax sentiment could surge again.”

Can history repeat itself? The mood of the country is sour as is the mood in California. There is certainly resentment against having to pay more at the pump. But property owners affected by Prop 13 vote in large numbers while ordinary people affected by a rise in gas taxes — especially in off-year elections — don’t. That may prove the difference between the enraged voters who shocked the world in 1978 and the enraged voters today who may come up a little short.