Assembly Speaker Karen Bass said June 5 that Assembly Democrats are proposing $6.4 billion in tax increases for the 2008-09 state budget, but she did not provide details. Ms. Bass made the remarks during a luncheon speech and question-and-answer session hosted by the Sacramento Press Club.
Ms. Bass said the Assembly Democrats' budget will include "tough cuts and some new revenue." She added, "We are proposing that we start by closing tax loopholes and also that we look back at some of the tax credits that were given in previous years when revenues were better."
Political columnist Dan Walters of The Sacramento Bee fished for details about the "loopholes" and credits slated for elimination, asking, "How much, and which ones?"
Ms. Bass answered that she was "not sure" about which taxes would be changed, but said the amount will be just over $6 billion. "Looking at tax loopholes," she said, "we have a variety that we're looking at, but we're not sure which ones we're going to propose yet as we go into negotiations."
In a press release, she mentioned "closing loopholes and (repealing) the tax giveaways of past budgets, particularly for corporations and the richest of the rich Californians."
In response to a question about whether the proposed tax changes will be discussed in public committee hearings, Ms. Bass did not give a firm "yes" or "no." Instead, she said the Assembly-Senate budget conference committee will begin meeting June 12, and will meet for about two weeks. At the same time, she said, the four legislative leaders and the governor – the "Big Five" – will be negotiating the budget.
Given that time frame, she said "we don't have any illusions" that the Legislature will meet the state constitution's June 15 deadline for sending a budget bill to the governor. She said the goal is to have a budget by the July 1 start of the new fiscal year.
Assembly Republican Leader Mike Villines, in a press release issued hours after the speech, said: "We believe that building a budget based on a $6.4 billion tax increase is a mistake and it ignores the Legislature's responsibility to craft workable budget solutions. It is irresponsible for the liberal majority to make hard-working Californians pay for their over spending with tax increases." The GOP leader added that with the economy struggling, "It is pretty clear that people cannot afford to pay higher taxes."
Other issues addressed by the Assembly speaker include:
Commission on California's Tax Structure. Discussing her effort to create a bipartisan commission to study California's entire tax structure, Ms. Bass said she has met with the governor, who had proposed a similar plan, and together they decided to expand the commission to include input from each of the Big Five. The goal of the commission is to "try to update a structure that was put in place in the 1930s," she said. She did not reveal how many members would serve on the commission, but said, "We have a universe of names that we have all contributed to – Democrats and Republicans – and our staff is working to whittle that list down." She said she hopes that the Big Five will be able to announce the membership of the commission by the end of the month. She added that the commission will be given a long period of time, and not a compressed schedule of a few months, to form its recommendations.
Proposition 13 Changes Would Be 'Too Polarizing.' Asked whether she will propose repealing parts of Proposition 13, Ms. Bass said: "We'll see what happens when the commission (studying the tax structure) is actually formed. I believe if we start with Prop. 13, it's a non-starter. I just think it is too polarizing to start there. I, frankly, would like to see changes in Prop. 13. I'd like to see changes in the two-thirds vote for the budget. But to me those are polarizing issues, and if you start there, it will really cause difficulty in the beginning. Now, having said that, along the way if the commission decides to take it up, I think it would be great. But I'm certainly not going to push it."
Search Firm Hired to Find New Legislative Analyst. Ms. Bass said a bipartisan committee of lawmakers has hired a search firm to help find a legislative analyst to succeed Elizabeth Hill, who has announced that she will retire near the end of this year.
Cal-TaxReports June 9, 2008
© 2008 California Taxpayers' Association. All Rights Reserved.