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Our View: The propositions: yes on 23 and 26; no on 21 and 24

Posted: October 14, 2010 9:16 p.m.
Updated: October 15, 2010 4:55 a.m.

Here’s The Signal’s view on a few of the key propositions on the ballot in November.

No on Proposition 21: vehicle-license surcharge
We love our parks. We love our open space. We have urged you to vote for many, many park-bond measures in the past because we believe the enjoyment of wilderness is vital to the human condition.

But we don’t love this ballot measure. In fact, it is seriously troubling.

This ballot measure isn’t about funding parks or wildlife. It’s about adding a tax.

Specifically, it’s about hiking your annual vehicle-license fee by $18 per year.

Oh, sure, advocates say the $18 can only be used for state parks and wildlife protection. That much is true.

But there is a big, unspoken lie.

It’s like this. State parks and wildlife programs are currently funded through the state’s general fund, park user fees and gasoline taxes.

Guess what happens when the state park system gets an annual infusion of $500 million through this new VLF surcharge?

That’s right. The Legislature cuts the general-fund and gas-tax contribution to the park system by an equal amount.

What, you don’t believe your Sacramento politicians would do that? They did it earlier this year when they shifted $1 billion in transportation bond costs from the general fund to the state gas-tax fund after raising gas taxes on fuel suppliers.

Proposition 21 is exactly the same kind of shell game.

Under Proposition 21, the Sacramento politicians must spend the new VLF fees on state parks, but they aren’t limited in creating new ways to waste the $500 million they recoup.

Vote no on Proposition 21.

Yes on Proposition 23: suspend AB 32
When Gov. Schwarzenegger signed Assembly Speaker Fabian Núñez’ “Global Warming Solutions Act” in 2006 — over the protests of the business community and this newspaper — the governor said he wanted to make California “No. 1 in the fight against global warming.”

Schwarzenegger probably meant it when he said he thought the act, AB 32, was “good for businesses.” The economy was booming, the housing market was on a tear and unemployment was hovering around 5 percent.

To its supporters, AB 32 seemed a luxury we could afford. With a cap-and-trade scheme that presaged the federal version, the law required the unelected California Air Resources Board to impose regulations that would cut carbon emissions to 1990 levels by 2020. The governor was certain that businesses large and small would “harness their entrepreneurial spirit to help us achieve our climate goals.”

Four years later, California is No. 1, all right — No. 1 in unemployment among the lower 48. (Alaska and Puerto Rico are even worse off than we are, if you can believe that.)

Where are the “green jobs” that AB 32 was supposed to inspire?

Give it time, supporters say. The law doesn’t take full effect until 2012, and you can’t build a green economy overnight, they say.

That’s just the point. Time. This isn’t the time. Next year isn’t the time. At the rate we’re going, 2012 won’t be the time, either.

The economy won’t sit around and wait for the politicians and some yet-to-be-identified entrepreneurs to reinvent it. While they’re bouncing around those “global warming solutions” in their heads, the economy will fail.

And that is precisely what has happened. Unemployment stands at 12.4 percent, the state is broke, our bond rating is in the toilet and the nation’s top 600 CEOs have ranked California “the worst place in which to do business.” Again.

It doesn’t help that California has the nation’s highest sales tax rate, highest gasoline tax, fourth highest capital gains tax, seventh worst “tax freedom day” and highest corporate income tax rate west of the Mississippi.

As the Wall Street Journal noted, independent studies show that implementing AB 32 would cost every family in California $3,857 per year.

“No matter what one thinks of climate science,” the Wall Street Journal said, “it makes little sense for an individual state to unilaterally impose major new tax and regulatory costs on its own industries. The impact of California’s gesture on global temperatures will be infinitesimal, but the economic impact will make the state even less attractive to start or expand a business.”

We’re sure that in the long run, the transformation to a greener economy is appropriate — and inevitable.

But we can’t achieve it overnight, and at this moment, we can’t afford to try.

Proposition 23 would put AB 32 on hiatus until we can afford it. Proposition 23 would suspend AB 32 until our full-year unemployment rate is back down to 5.5 percent or less — in other words, until such time as our economy is back on the same sound footing it was on when the governor signed AB 32 into law.

Hopefully, the politicians and entrepreneurs can put their heads together in the meantime and figure out how to create “green jobs” before they come back and punish businesses for creating actual jobs.

Vote yes on Proposition 23.

No on Proposition 24: business-tax liability
Don’t be afraid of Proposition 24 just because it sounds like a bunch of legalistic gobbledy-gook. Be afraid of it for a different reason. Be afraid of it because it’s dangerous.

If California is already a less-than-attractive place to do business, Proposition 24 would nail the coffin shut.

Simply put, this measure makes it significantly harder for struggling businesses to write off operating losses from one year to the next, and cripple their ability to share state tax credits.

The net effect? It would drive those cherished “green” startups and stressed mom-and-pops stores right out of business, taking the jobs they created with them to the unemployment line.

Vote no on Proposition 24.

Yes on Proposition 26:
two-thirds vote requirement
When is a tax not a tax? When it masquerades as a fee.

By law, a fee is supposed to be a “fee for service.” You pay a fee to enter a state park and you get to use the park.

A restaurant pays a permit fee and it gets a health inspection. Oh, joy. A fee doesn’t have to be for something “nice,” but it has to be “for service,” and nice or not, it has to benefit the specific person or business that pays it.

A tax is more general. A tax is a mechanism the government uses to raise money for general purposes.

In California, state and local government agencies can usually impose fees with a simple majority vote of the governing body.

General taxes, however, require a two-thirds vote.

What happens when a government agency imposes a fee and uses the revenue in ways that aren’t directly related to the person or business that’s required to pay it?

For instance, what if the SCV Sanitation District decides to impose a fee on Santa Clarita Valley residents, and then use the money to build a great, big water-treatment facility that flushes the salt out of our imported state water for the good of, oh, let’s say the downstream farmers in Ventura County?

Is that a fee or a tax? Is it a fee that benefits the payers, or is it a tax that benefits the general welfare?

We don’t really know the answer to that question, but you get the drift.

Throughout California there are all sorts of “hidden taxes” masquerading as fees — by some estimates, more than $10 billion worth of them.

Proposition 26 would reclassify many of these not-really-fees as taxes, and require a two-thirds vote to implement them, just like “real” taxes.

If you believe as we do that taxes should be subject to a two-thirds vote requirement — currently the law in California — then surely you agree this principle should apply to “hidden taxes,” as well.

Vote yes on Proposition 26.


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