MOORLACH UPDATE — End Game — September 1, 2015

It’s the home stretch toward the end of Session. The briefings I received late last night on the bills that will be covered today are more than 1,700 pages! And, there’s the intrigue of the possible gas and managed care organization tax increases. Will the Senate Republican Caucus stand firm? Or will one or more of us be persuaded to bolt? Fun times.

The Sacramento Bee covers the tax topic in the first piece below. The Santa Clarita Valley TV website provides an informational piece from one of California’s State Board of Equalization Board members that mentions our Facebook and Twitter efforts on stopping the gas tax in the second piece below.

Democratic hopes for California tax increases hinge on GOP votes

GOP lawmakers last supported a tax deal in 2009

Gas, cigarette taxes on the table this year

‘Shaming’ and recall threats are part of anti-tax arsenal

By Christopher Cadelago


Jon Fleischman, the conservative activist, blogger and political consultant with the ear of many at the Capitol, was giving another interview to a right-leaning talk radio show one recent afternoon when he was asked about the possibility of Republican lawmakers supporting a tax increase.

“There’s always a chance,” Fleischman said, loosely summarizing a quip he attributed to Mark Twain: “Always hold on to your wallet when the Legislature is in session.”

As the first year of the session winds down with transportation and health care among the issues on the table, whether lawmakers move to boost revenues is among the most intriguing questions on the docket.

Proposals include increasing the gas tax by 12 cents per gallon and raising vehicle registration fees by some $35 a year, imposing a new levy on managed health care plans and adding a $2 tax to each pack of cigarettes. Democrats have also discussed extending temporary sales and income taxes set to expire in 2016 and 2018.

A handful of Republicans would have to join majority Democrats to raise taxes in the special session – a political risk even a vigilant tax-fighter like Fleischman now believes is unlikely.

Yet he warned it was just six years ago when then-Gov. Arnold Schwarzenegger “strong-armed” three Republicans in each chamber to vote to temporarily raise taxes. As part of an effort to close a massive $41 billion deficit in 2009, GOP leaders cut a deal that included about $14 billion a year in taxes despite repeated vows to protect taxpayers.

New circumstances could insulate wayward Republicans from retribution. A ballot measure approved by voters in 2012 allows lawmakers to serve a maximum of 12 years in either the Senate or Assembly, eliminating the need to step down after eight or six years, respectively, to run for the other house. Those terming out of office in some cases won’t run again and don’t have to worry about angering the electorate.

Another difference is a switch to a top-two primary system, which reached the ballot as part of the 2009 deal when then-Sen. Abel Maldonado, R-Santa Maria, sought the change before casting his vote for tax increases. The system could protect an incumbent against a foe from the same party.

Under the old rules, a Republican had to win the party’s primary election to move on. Now, they just have to finish in the top two in June to advance to the November runoff. As long as a Democrat runs, a more conservative GOP challenger likely would have a hard time elbowing out the incumbent.

While the primary system will not shield every incumbent, “it offers an additional base of support for those members that might be tempted to sign on” to a tax-raising deal, said Dan Schnur, director of the Jesse M. Unruh Institute of Politics at the University of Southern California.

Republicans might be most inclined to raise taxes to repair deteriorating roads and to reduce traffic, Schnur said. Still, he said, they would want to point to specific improvement projects to ease the commutes of constituents.

“There is a reason that local tax increases pass much more frequently than at the state level, and it’s because voters believe those taxes will have a direct and immediate impact on their own lives,” Schnur said. “It’s an uphill fight (securing a state tax increase), but the top-two primary and the nature of the transportation issue changes the dynamics for the incumbent legislators” who may go up on taxes.

Darrell Steinberg, the former Democratic president pro tem of the Senate, said he has seen Republican votes shift on a host of issues, including immigration and gay rights.

“Some of them got the message that you can’t govern from the far right and be relevant in a blue state,” Steinberg said.

“It always ought to be about what can we get done instead of a reflexive ‘no,’” he added. “More often than not over the last four or five years that has been the trend. There may be limits. I guess we’ll see.”

Even in 2009, when Steinberg helped broker the budget deal, the GOP mustered only the minimum number of votes needed. All six of the GOP lawmakers who voted for the tax hikes in one way or another paid a political price for rebelling.

More recently, Gov. Jerry Brown’s bid to round up enough Republican votes to place a tax on the ballot in 2012 – not to approve one – came up empty. He ultimately worked to qualify Proposition 30 to get it done, arguing to voters that the money was needed to support education.

Most Republicans today would see their electoral chances diminished by supporting a tax increase, said Matt Rexroad, a Republican political consultant in Sacramento. He said the anti-tax pledges many of them sign during campaigns are popular with voters.

“I can’t think of any Republican in the districts they are in right now who it would be favorable to their political future,” he said.

Several current and former GOP lawmakers and their aides said the lack of a yawning budget gap will make it harder to persuade Republicans to support taxes.

Former Assemblyman Roger Niello, a Republican from Fair Oaks, said when he voted with Democrats in 2009 the “consequences at that point, in my opinion, were serious beyond description.”

“We’re not looking at that sort of situation right now, neither with transportation nor with health care,” Niello said. “There are ways to address our transportation needs without increasing taxes, and Republicans have an impact on that by refusing to increase the taxes and driving the discussion on the other solutions.”

Former Sen. Sam Blakeslee, R-San Luis Obispo, said higher gas taxes are a tough sell.

“When it comes to taxing the wealthy, the public is relatively sympathetic to the need for more revenue,” he said. “When you are asking people to pay more at the pump, or when you are asking the working poor or the middle class to pay a heavier share, you run into significant skepticism by the public.”

Republican Assembly leader Kristin Olsen said through a spokesman that the Legislature just passed the most expensive budget in state history “yet ignored core government responsibilities like keeping the roads paved and fulfilling our promise to our state’s neediest medical patients.” The GOP has put forward a plan to begin paying for road repairs with no new taxes, largely by shifting funds from other programs.

In the Senate, GOP leader Bob Huff of San Dimas was prematurely removed last week and replaced with Sen. Jean Fuller of Bakersfield in part over last-minute jitters about a tax deal. Speaking with reporters, Fuller said broadly that Republicans “do not raise taxes,” yet she also did not close the door.

“Anything is possible … (but) especially without efficiencies, especially without guarantees, we are just not in favor of increasing taxes on hard-working families,” she said.

Sen. John Moorlach, R-Costa Mesa, laughed when asked whether the earlier-than-expected leadership change in the Senate would help upper-house Republicans hold the line on taxes. Over the last few weeks, Moorlach, an accountant by trade, has been using numbers from the budget to paint the state Department of Transportation as inefficient. He said the agency has 3,300 to 3,500 engineers too many, and has refused to hire more outside contractors.

Taxes, he said, shouldn’t be a consideration, though he isn’t certain that the 14-member caucus can stick together “without someone bailing.”

If two Senate Republicans peeled off, he said, “that would really hurt the brand if we let the taxpayers of this state down.” He noted that Republicans only recently prevented Democrats from holding the two-thirds majorities in both houses that would let them raise taxes by themselves.

Fleischman isn’t taking any chances, saying he’s prepared to resort to “shaming” and recall threats if necessary. He said the 2009 deal could have been avoided if activists and donors “went to Defcon 1 before the vote instead of after the vote.”

Among the people he said he’s concerned about is Senate GOP Caucus Chair Tom Berryhill, who recently abstained from a tax measure in committee and did not respond to an interview request. “That tells me ‘I’m the guy to come see if you want to talk about what the framework looks like on a deal,’” Fleischman said.

As he worried about taxpayers’ wallets on the radio show in San Diego, Fleischman implored listeners to call the office of local Republican Assemblyman Brian Maienschein.

Maienschein’s office issued a brief statement: “Assemblymember Maienschein won’t be voting for a tax increase.”

Christopher Cadelago: 916-326-5538, @ccadelago


Tax News from George Runner

George Runner, R-Lancaster, represents the Santa Clarita Valley and 9 million other Californians on the state Board of Equalization.