Republicans point fingers after blue wave in California
Party officials survey the damage after a tough midterm election which left Republicans holding just seven of California's 53 House seats; chief correspondent Jonathan Hunt reports.
With the tax-filing deadline just days away, California residents are worried that a slew of proposed levies on everything from soft drinks to water to tires and car batteries could soon see even more money going out of their pockets in the state that already has the nation's highest income tax.
As Californians grapple with that 13.3 percent income tax – and some leaner-than-usual refunds this year due to the recent federal tax overhaul – lawmakers in Sacramento are looking at a range of other revenue sources. Members of the legislature's Democratic supermajority argue that these new taxes are vital to shore up the state coffers and to provide crucial services such as repairing crumbling infrastructure, cleaning up toxic wells and fighting obesity.
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Overall, the California Tax Foundation has added up more than $6.2 billion worth of tax increase proposals pending in the state legislature, with that number expected to rise as bills are amended.
But the state’s minority Republican leaders bemoan these new proposals, arguing that Californians are already burdened by some of the highest taxes in the country and the new charges would only worsen the state’s mounting affordability and housing challenges.
“We have the highest gas tax in the nation and the majority party has gone as far as taxing our air,” California State Senate Republican Leader Shannon Grove said in a statement to Fox News. “Now, they are proposing to tax our water, soda, tires, and more. Higher taxes won’t solve California’s affordability and housing problems, and they will only make things worse.”
A spokesperson for the California Democratic Party declined to comment to Fox News, instead directing questions to lawmakers who proposed the pieces of legislation.
One of the most controversial proposals to come out of Sacramento this year is a proposal from Democratic Gov. Gavin Newsom to tax drinking water in order to clean up contaminated water in the state’s low-income and rural areas.
He told reporters earlier this year that the lack of access to safe drinking water in the state is a "disgrace."
The proposal, which if enacted would levy a fee of between 95 cents and $10 a month on residents' water bills depending on meter readings, has divided members of Newsom’s own party. Tax and fee increases require support from two-thirds of lawmakers and, despite Democrats holding roughly 75 percent of the legislative seats in the state, some representatives from moderate and agricultural strongholds balk at the water tax idea.
State Sen. Anna Caballero has proposed using the state’s $22 billion surplus to create a trust fund to pay for water improvements. The move by Caballero has been championed by taxpayer associations in the state.
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“A state-imposed tax would not only be an outlier from a national perspective, it would be for California as well,” John Coupal, the president of the Howard Jarvis Taxpayers Association (HJTA), said in a statement. “Moreover, there are other ways to fund the one-time $150 million cost of necessary water system improvements.
Coupal added: “Not only is there federal funding specifically available for this purpose, California has passed several statewide bonds that have allocated hundreds of millions of dollars for clean water infrastructure improvements.”
Along with water, another liquid has come under the scrutiny of lawmakers in California: soda.
Following a national trend – and concerns over the risks of obesity and diabetes – Democratic lawmakers in the state have proposed a tax on the sugary beverages, which include soft drinks, sweetened iced teas, coffees and sports drinks. While details have remained vague on how much these taxes would be, Democratic Assemblyman Richard Bloom has supported a 2-cent-per-ounce tax in previous proposals.
“We have ignored this crisis for too long,” Bloom said in January. “We are standing on the edge of a cliff and addressing this health crisis requires a multi-pronged approach like the one you see today.”
A recent Los Angeles Times report highlighting some of these tax proposals noted that polls show residents already think they're overtaxed. Republicans and representatives of the beverage industry argue that the tax would unfairly hurt businesses and consumers, particularly those in lower-income communities.
The “burden of paying the tax would disproportionately fall on some groups relative to others,” said Steven Maviglio, a spokesman for the American Beverage Association.
Besides beverages, Democrats are looking to pass Assembly Bill 18, which among other things looks to tax the sale of handguns and semiautomatic weapons in order to generate funding for gun control programs.
The bill, which was sponsored by Democratic Assemblyman Marc Levine, would implement “an excise tax on the sales of handguns and semiautomatic rifles” and then hand over the resulting revenue to the California Violence Intervention and Prevention Grant Program (CalVIP).
“California needs to bolster violence prevention initiatives so that they are commensurate with our state’s tough gun laws and as effective as violence prevention programs of other states,” Levine said in a statement earlier this month.
California already has some of the toughest gun control laws in the country and, beginning in 2019, state ammunition dealers will be required to maintain logs of all sales – including those of bullets. The state has already restricted online sales of bullets so they can only be delivered to licensed dealers and not someone’s home.
The gun-tax legislation has drawn heavy criticism from gun-rights and hunting groups.
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In an effort to curb opioid addiction and fund drug treatment programs, lawmakers in California have introduced a bill that would impose a one-cent-per-milligram surcharge on prescription opioids sold in the state.
“California’s opioid epidemic has cost state taxpayers millions and the lives of too many of our sons and daughters,” Democratic Assemblyman Kevin McCarty said in a statement. “We must do more to help these individuals find hope and sobriety. This plan will provide counties with critical resources needed to curb the deadly cycle of opioid and heroin addiction in California.”
In the state with the most drivers in the U.S., lawmakers are also looking to tax parts of automobiles to fund other government programs and initiatives.
In February, Democratic Assemblyman Chris Holden proposed a $1.75 fee on every new tire put on a car, while in December another bill was proposed to levy a $1 fee on every lead-acid battery made by a manufacturer and sold in the state until 2022. The tire tax is estimated to generate $57 million to pay for stormwater cleanup.
There is also a proposal to tax oil and gas extraction in the state, which would not only put California in line with every other major oil-producing state in the U.S., but would bring in an estimated $1.5 billion a year.
While lawmakers supporting these moves say they will improve the lives of all Californians and help the state maintain its large surplus, critics say all they do is allow the state to spend more money at the expense of working residents.
“As they spend more and more money, we raise the cost of living on everyone in the state,” Will Swaim, the president of the California Policy Center, told Fox News.
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