The real story behind Sacramento’s push for tax hikes: pension red ink

Editorial, San Diego Union-Tribune | Two bold proposals to increase both taxes and what can be taxed illustrate how California’s elected leaders are failing to be honest with voters about the nature of the budget problems facing the state.

The first is the long-anticipated effort to change Proposition 13, the landmark 1978 ballot measure limiting property tax increases to 2 percent a year, so that it no longer applies to commercial and industrial parcels. Proponents appear to have gathered enough signatures that voters will be asked to consider what’s known as “split roll” in 2020. This has the potential to generate an additional $6 billion to $10 billion a year in new revenue. Local governments would get 60 percent of this windfall and school districts would get 40 percent. Advocates tout the measure as an easy way to fund new and improved social services and to boost school quality.

The second is the renewed push to impose a first-ever tax on water use to help pay for improving water quality for the 1 million-plus Californians in impoverished areas without consistent access to safe water. After previous efforts collapsed, Gov. Jerry Brown and his allies in the Legislature have come up with a twist: making the tax “voluntary” by allowing residents to opt out of paying the 95 cents or so they would otherwise have to pay per month. It’s anticipated this would raise about $100 million a year.

Both of these efforts are shrouded by smokescreens that obscure key facts.

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UnsustainableSo what is driving this push to increase and broaden taxation? It’s the pension tsunami. The “split roll” and water tax push are meant to shore up governments that provide some indefensibly generous retirement benefits to public employees because of poor decision-making and the political clout of unions — benefits that already claim 15 percent or more of many government budgets [like Fullerton's] and are on their way to a much higher percentage.

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