California legislative session ends with higher taxes

By Steven Greenhut | California’s legislative session, which completed its work in the wee hours Saturday morning, was one of the more controversial ones in years, given the degree to which the Democratic majority was able to secure various tax and fee increases. It was also one of the more divisive recent sessions from a partisan standpoint.

Steven GreenhutThe most significant measures passed long before the session’s deadline. In April, lawmakers passed a controversial 12-cents-a-gallon gas-tax increase by a razor-thin margin. The law also increased vehicle-license fees. In July, they passed a 10-year extension of the state’s cap-and-trade program, with the help of several Republican legislators. The Legislative Analyst’s Office estimates the measure could increase gas prices as much as 63 cents a gallon by 2021.

But the final hours of the session were still filled with tension. The housing package worked out between Gov. Jerry Brown (D) and legislative leaders had stalled in the final days, but snuck past the finish line. The package includes three bills. One (Senate Bill 35) would streamline the approval process for high-density affordable housing projects, but requires contractors to pay union-based prevailing wage rates on those subsidized projects in return.

The other two parts of the deal have a bigger tax-and-spend element to them. SB2 imposes new fees of $75 to $225 on various real-estate transactions to help fund subsidized high-density housing projects. SB3 will place before voters on the November 2018 ballot a $3 billion state housing bond that likewise will fund the construction of low-income housing units.

The gas tax increase has sparked a GOP-led recall effort of Fullerton-area Democrat Josh Newman, mainly because of his vote to support the increase—and because he represents a GOP-heavy district. Democrats passed two bills this session to change the recall rules to help the embattled senator, but that issue is working its way through the courts. If Newman loses, Democrats would lose their supermajority in the Senate. Anti-tax activists also are gathering signatures for an initiative that would repeal the new gas tax and license fees.

To read the rest of this column on the Reason website, please click here.

This entry was posted in Josh Newman, Steve Greenhut. Bookmark the permalink.

Comments are closed.