A series of fiscal initiatives have been filed with the State Attorney General’s Office in recent weeks that seek to do everything from taxing marijuana and increasing taxes on commercial property and cigarettes to calling a constitutional convention to reform California government.
KC Fiscal Focus has completed a brief summary of several of the initiatives that includes the initiative proponents and a link to the text of the measures. Major backers of some of the initiatives include California Forward, the California Teachers Association and former Senate President Pro Tem Don Perata.
The reason for the recent flurry of initiatives is the series of deadlines that proponents must meet to qualify an initiative for the November ballot. Once filed, the Attorney General has 45 days to provide a title and summary after which proponents can begin collecting signatures for submission to the Secretary of State’s Office by late April.
Hundreds of initiatives are filed each year because it only costs $250 to file an initiative but only a small number end up moving forward because it usually costs at least $1-2 million to pay signature gatherers to gather enough signatures to qualify a measure for the ballot.
It is unclear which measures will end up going forward but several of the measures have the backing of major organizations that have the resources to qualify the measures for the November ballot.
Summary of Initiatives:
California Forward Initiatives: The California Forward Action Fund has submitted two reform measures that seek to provide structural reform for state and local governments. The “Best Practices Budget Accountability Act” lowers the vote requirement for passage of a state budget from a 2/3 vote to a majority vote of the legislature and requires a 2/3 vote for any new fees that replace a tax, but does not change the majority vote requirement for other fees or the 2/3 vote requirement to raise taxes. The measure includes a number of other provisions that call for periodic performance reviews of state programs; create a process for identifying and using revenue spikes for one-time purposes; and requires that new or expanded programs and tax reductions identify a funding source. A second measure submitted by the Action Fund, titled the “Community Funding Protection and Accountability Act of 2010” prohibits the state from borrowing or transferring local government taxes and fees and allows local governments to raise local sales taxes by up to 1 cent, on a majority vote of the electorate, to fund countywide action plans. Current law requires a 2/3 vote of the electorate for tax increases that are dedicated to specific purposes.
“Split-Roll” Property Tax to Fund Education: The California Teachers Association has filed two versions of an initiative that would implement a “split-roll” property tax to provide additional funding for schools. The first measure, “Education and Taxpayer Fairness Act,” would increase the property tax rate on non-residential real property from 1% to 1.55% and dedicate revenues raised from the additional 0.55% to fund K-12 education (78%), community college districts (11%) and the California State University system (11%). A second measure, titled the “Protect Homeowners and Close Corporate Tax Loopholes Act,” would require non-residential real property to be assessed at market value at least every three years. The measure would allow each county to retain a “reasonable amount” to cover their increased costs and require 90% of the remaining additional tax revenue to be transferred to the state general fund on an annual basis. Prop. 98 would require roughly half of these new general fund revenues to be used to fund education. Both measures provide for a $1 million personal property tax exemption and double the homeowners’ exemption from $7,000 to $14,000.
Repealing Corporate Tax Breaks from 2008 and 2009 Budget Agreements: The California Teachers Association has submitted the “Repeal Corporate Tax Loopholes Act” to eliminate the new corporate tax breaks granted as part of the 2008 and 2009 budget deals. The measure is estimated to raise about $2.5 billion in annual revenue. A previous version of the measure was submitted by Lenny Goldberg and the California Tax Reform Association.
Convening A Constitutional Convention: The Bay Area Council, a coalition of San Francisco Bay Area business leaders, has filed an initiative that amends the California Constitution to permit voters to call a constitutional convention by passage of an initiative. A second measure outlines how the convention process would work if the first measure passes. For more information on the measures click here.
Vehicle Surcharge to Fund State Parks Access: Joe Caves, a partner with the Conservation Strategy Group, has filed the “State Parks and Wildlife Conservation Trust Fund Act” on behalf of Californians for State Parks and Wildlife Conservation. The measure would impose an $18 annual surcharge on every motor vehicle, to be called the State Parks Access Pass, and provide that the money would be deposited into a newly created trust fund to fund the operation and maintenance of state parks. All vehicles subject to the State Park Access Pass would have free access to the state park system.
Increased Cigarette Tax to Fund Cancer Research: Former state Senate President Pro Tem Don Perata has proposed the “California Cancer Research Act” which would increase state cigarette taxes by $1.00 per pack to fund a variety of new cancer research programs and grants. The measure would also impose a $1.00 per pack “floor stock tax” on each cigarette dealer for each cigarette in his possession on the first day of each calendar quarter. Perata has taken heat from early childhood education advocates because the measure would not “backfill” the reduced Proposition 10 tobacco tax revenues that would result from the decreased tobacco sales due to the increased tax. The measure does “backfill” reduced Proposition 99 tobacco tax revenues.
“Paycheck Protection:” The Orange County-based law firm of Bucher and Palmer LLP has filed two initiatives which would require the prior consent of public employee union employees before employee payroll deductions could be used for political purposes (Version #1, Version #2). Thes measures are similar to prior attempts which have been defeated by unions at great cost.
Legalizing and Taxing Marijuana: At least two initiatives have been filed that legalize the possession and cultivation of marijuana for personal use and providing for the taxation of marijuana by state and local governments. “The Tax, Regulate, and Control Cannabis Act of 2010” permits local governments to regulate and tax commercial production and the sale of marijuana to people 21 years and older. A second measure requires the Legislature to adopt laws regulating and taxing marijuana within one year of passage and allows local governments to also tax the manufacture, sale, and use of marijuana. The medical marijuana industry is said to support at least one of the measures which could provide the financial resources to qualify a marijuana tax measure, according to State Tax Notes.
Limitations on Public Employee Pensions: The California Foundation for Fiscal Responsibility (CFFR) has filed two initiatives which require a new tier of significantly reduced pension benefits for new public employees (Version #1, Version #2). CFFR president Marcia Fritz met with Governor Schwarzenegger last week to seek support for the measures.
Majority Vote Requirement for Passage of A Budget: UC Berkeley linguist George Lakoff, has submitted “The California Democracy Act” which would declare that all actions of the budget and revenue should be done by a majority vote instead of the 2/3 vote requirement. Lakoff is attempting to build a grassroots effort to pass the measure but has run into opposition from the California Democratic Party and other groups which support the concept but argue that polling data demonstrates that voters will not support lowering the vote threshold for taxes, according to State Tax Notes.
Protecting Local Government Revenues Sources: The League of California Cities and other local government interests have submitted two versions of “The Local Taxpayer, Public Safety and Transportation Act of 2010,” to protect local revenues from being taken by the state (Version #1, Version #2).
Lowering Vote Requirement for Local Public Infrastructure Projects and Special Taxes: The law firm of Remcho, Johansen, and Purcell, LLP has filed the “Local Voter Control and Government Accountability Act” which lowers the local vote requirement from 2/3 to a 55% vote for the passage of public infrastructure projects and other special taxes such as parcel taxes and sales taxes for specific purposes.
For more information on these measures visit: http://www.sos.ca.gov/elections/elections_j.htm
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