California

Guns, gas and soda – most California tax proposals died at the Capitol, but a few remain

California lawmakers this year put forward new tax proposals that would have hit soda drinkers, bankers and gun owners not to mention anyone with a car.

Most of those proposals died this week in a major culling of bills, leaving only a handful of tax measures in place.

Some of them died before they reached the Senate and Assembly Appropriations Committees, while others were pulled by their authors. The remaining were left to consideration on Thursday by the two checkpoint committees that decide which bills can move forward this legislative session.

Loren Kaye of the California Foundation for Commerce and Education in April estimated the tax proposals amounted to $15 billion in additional potential fees in a year when the state is projecting a $22 billion surplus.

Now, only a few tax and fee proposals have a chance of reaching Gov. Gavin Newsom.

Here’s what’s left.

AGRICULTURAL FEES

More than 1 million Californians don’t have safe drinking water. Assemblyman Eduardo Garcia, D-Coachella, introduced Assembly Bill 217 to finance water quality and infrastructure projects through agricultural fees on water, fertilizer, dairy and confined animal facilities.

“Our state’s safe drinking water crisis is a matter of public health urgency impacting our families, students, and most vulnerable communities,” Garcia said. “As the Legislature reviews potential policy avenues, I have been working diligently with my colleagues to ensure that AB 217 is equitable, sustainable, and reflects the unique needs of regions throughout our state.”

ELIMINATING TAX EXEMPTIONS

One of the few surviving bills would raise billions of dollars in additional revenue by eliminating several of California’s tax exemptions and incentives.

Despite pushback from the California Chamber of Commerce, Senate Bill 468 cleared past Appropriations on Thursday and now heads to a Senate floor vote. State Sen. Hannah Beth Jackson, D-Santa Barbara said in a statement that she is “optimistic” about the latest development.

“SB 468 will bring much-needed transparency and accountability to our state tax expenditures and help ensure California taxpayer dollars are being spent prudently, fairly, and wisely,” Jackson wrote.

CHARGING OPIOID MAKERS

A bill to combat the growing chokehold that opioids have on communities across the state is Assembly Bill 1468, co-authored by two assemblymen, Sacramento Democrat Kevin McCarty and Yuba City Republican James Gallagher.

The bill requires that opioid stakeholders contribute a $50 million collective “stewardship payment.” Each manufacturer and seller pays a “ratable share” on a quarterly basis, to go toward county and local opioid prevention and rehabilitation programs.

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INCREASING TIRE FEES

Assembly Bill 755 raises tire fees from $1.75 to $3.25 to finance initiatives that prevent pollutants in stormwater runoff. The bill is estimated to rake in an additional $55 million per year.

Failed tax proposals

And then there’s the graveyard. The following tax and fee proposals are not moving forward.

NEW CORPORATE TAX

California companies with CEOs who make a lot more money than their employees may have dodged a bullet this year.

A proposal from state Sen. Nancy Skinner, D-Berkeley, is stuck in her chamber’s Rules Committee and will not be considered until 2020.

Senate Bill 37 would have forced corporations that make over $10 million a year to pay higher taxes. The tax rate would’ve been based on the pay gap between the company’s CEO and median employee. It had higher rates for financial institutions.

The California Chamber of Commerce added Skinner’s bill onto its “job killer list,” warning that it would discourage companies from coming to California or investing in the state.

“This bill’s not going to go away,” Skinner said. “The concept is too important. We have coronations across the country showing record-high profits and CEOs with record high salaries at the same time regular people have had their wages stagnated.”

GUN FEE

A proposals that would have imposed a $25 excise tax on new firearm purchases was tabled for 2019 and pushed to a “two-year bill.”

Though an Assembly Bill 18 analysis estimated the tax could have raised an additional $13 million for violence prevention programs, the proposal won’t earn a vote before January 2020.

SODA TAX FIZZLES OUT

Assemblyman Richard Bloom, D-Santa Monica, pulled his own soda tax bill in late April. Assembly Bill 138 was Bloom’s third attempt to cut California’s sugary beverage intake by taxing manufacturers 2-cents-per-fluid ounce on certain drinks.

“While this is not the outcome I had hoped for, AB 138 remains alive in the legislative process, albeit on a slower track,” Bloom said in a statement. “This delay is unfortunate because, with the health outcomes of millions of Californians at stake, there is no time to lose.”

ANOTHER GAS TAX

The already high gas prices won’t get higher under Senate Bill 246, authored by Fremont Democrat Bob Wieckowski. The proposal would have imposed a 10 percent oil and gas severance tax to raise an estimated $900 million for the state’s general fund.

In a statement, Wieckowski dismissed concerns his bill would lead to higher gas prices at the pump and said he’s continuing to gather support to bring California “in line with other major oil-producing states.”

NO ESTATE TAX

State Sen. Scott Wiener, D-San Francisco, will not get a floor vote on his proposal to raise estate taxes on the richest Californians.

Senate Bill 378 would have placed a 40 percent estate tax on individuals worth at least $3.5 million and couple worth $7 million. If Wiener’s bill passed, the measure would go to the 2020 ballot. The plan would have pumped an estimated $500 million to $1 billion in new revenue into a newly created “Children’s Wealth and Opportunity Building Fund.”

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Hannah Wiley joined The Bee as a legislative reporter in 2019. She produces the morning newsletter for Capitol Alert and previously reported on immigration, education and criminal justice. She’s a Chicago-area native and a graduate of Saint Louis University and Northwestern.
Bryan Anderson is a political reporter for The Bee. He covers the California Legislature and reports on wildfires and transportation. He also hosts The Bee’s “California Nation” podcast.
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