This year California voters will choose a new governor, fill other statewide offices, elect 100 state legislators and 52 members of Congress and weigh an array of knotty ballot measures.<\/p>\n
Meanwhile, officials in the state\u2019s largest urban centers, Los Angeles County and the San Francisco Bay Area, will test voters\u2019 appetite for raising sales tax rates \u2014 already among the nation\u2019s highest \u2014 to levels never before seen in California.<\/p>\n
Los Angeles officials are asking voters in the June primary election to add another half percentage point to rates that already top 10% in most of the county\u2019s cities, raising money to offset reductions in federal health care spending.<\/p>\n
And voters in four Bay Area counties will decide in November whether to add another half percentage point, while those in San Francisco will be asked for a full percentage point \u2014 all to close the operating deficits of the Bay Area Rapid Transit system and local bus and trolley services.<\/p>\n
They are the latest in a string of increases that have virtually destroyed a state law limiting local add-on taxes to 2 percentage points over the statewide rate of 7.25%. Local officials seeking to go beyond that cap routinely ask the Legislature to grant waivers and they are routinely approved.<\/p>\n
California consumers spend about a trillion dollars a year on taxable goods, and the 7.25% statewide rate \u2014 the highest of any state \u2014 generates more than $70 billion a year, roughly half of which goes into the state\u2019s general fund budget, with the remainder being divvied up among cities, counties and special districts.<\/p>\n
When local override taxes are added, California\u2019s sales tax rate averages 8.99%, according to the Tax Foundation, or seventh highest of any state. With local rates, the range is as high as 11.25% in some Los Angeles County cities.<\/p>\n
The sales tax hikes being sought this year are not without controversy.<\/p>\n
Los Angeles County Supervisor Holly Mitchell, who led the effort for a health care tax increase, said it is needed to offset a loss of $2.4 billion in federal aid over the next three years. But it has drawn opposition from the California Contract Cities Association, whose members get services from county governments under contract.<\/p>\n
There are 73 contract cities in Los Angeles County and the association\u2019s executive officer, Marcel Rodarte, told supervisors in a letter that adding a half percentage point to the overall county tax rate could thwart efforts by cities to raise their rates. \u201cCities said if we wanted to do our own sales tax measure (increase), this makes it more difficult for cities,\u201d Rodarte said.<\/p>\n
Meanwhile, the Bay Area transit tax measure renews a long-running dispute over whether BART and other transit systems are too beholden to their unions and have refused to adjust to the decreased ridership that began during the COVID-19 pandemic.<\/p>\n
Gov. Gavin Newsom and the Legislature have given the Bay Area systems a $590 million loan to avoid deep reductions in service, but they can\u2019t tap the money unless voters agree to raise taxes by an estimated $980 million a year.<\/p>\n
Critics say transit officials are trying to scare voters into supporting the tax increase by describing doomsday effects if they don\u2019t back the measure.<\/p>\n
Bay Area News Group columnist Daniel Borenstein, wrote recently, \u201cWe can\u2019t keep putting Band-Aids on the region\u2019s transportation financing problems. The plea for the loans to cover ongoing operating expenses stems from a failure to right-size operations to meet post-pandemic demand.<\/p>\n
That\u2019s especially true of BART, which is threatening voters with shuttered stations if the sales tax measure doesn\u2019t pass in November. Never mind that BART is carrying less than half as many passengers as it was before the pandemic while providing more train service. It\u2019s nuts.\u201d<\/p>\n
CALmatters is a public interest journalism venture committed to explaining how California’s state Capitol works and why it matters. Dan Walters has been a journalist for nearly 60 years, spending all but a few of those years working for California newspapers.<\/p>\n","protected":false},"excerpt":{"rendered":"This year California voters will choose a new governor, fill other statewide offices, elect 100 state legislators 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