Contact: Ron Roach (916) 441-0490
The California Taxpayers' Association (Cal-Tax) opposes three anti-business ballot initiatives that would chase employers and jobs out of California. The Cal-Tax Board of Directors voted unanimously last week to challenge the three initiatives, all sponsored or financed by public employee unions.
"These initiatives would result in a multi-billion-dollar tax increase on California employers and businesses," said Cal-Tax President Larry McCarthy. "They are irresponsible and damaging proposals. The mere circulation of these measures hurts the state's business climate and economy.
"How do investors seriously consider California for business expansion with such proposals in circulation?" McCarthy asked. "They portray a self-serving, mean-spirited attitude on the part of public employee unions with no sincere regard for the consequences on California's economy and its citizens. Passage of these initiatives would severely handicap California's ability to maintain and attract employers to provide the jobs needed for a sound and growing economy."
Cleared for circulation of petitions by the Secretary of State's Office on September 26 was an initiative sponsored by Lenny Goldberg, leader of the California Tax Reform Association, which is funded almost entirely by public employee unions and has consistently supported higher taxes for more expansive government. Goldberg sponsored massive tax-increase initiatives -- Propositions 167 in 1992 and 217 in 1996 -- that were rejected by voters.
The "Goldberg initiative" would, according to the summary by the attorney general, require that businesses and individual income taxes be based on the same rate. It would, the attorney general continued, "repeal any tax rate, credit, exemption, exclusion, deduction or method of calculation which reduces corporate income tax revenues and which became effective after January 1, 1991." The measure would require that "additional revenue resulting from the measure would be given to individuals who reported income to the Franchise Tax Board in that fiscal year."
The Legislative Analyst's Office and the Department of Finance reported a wide range of fiscal impact because they said they cannot be certain how the measure will be enforced if it passes.
In the official summary of the measure, as approved by the attorney general, the Legislative Analyst's Office and the Department of Finance say the fiscal impact "would depend largely on how key provisions are interpreted and implemented." They said the annual impact could range between a state revenue loss of over $2 billion to a gain in state revenues of over $800 million.
Proponents have until February 23 to collect at least 433,269 signatures of registered voters to qualify for the June primary election ballot.
The Cal-Tax board also voted unanimously to oppose another initiative, sponsored by Daniel Terry of the California Professional Firefighters. This proposed constitutional amendment would repeal all business tax incentives on January 1, 2000 and require a two-thirds vote of the electorate to create any other rate, base or burden of state or local tax that applies to a business. This proposal has been submitted to the attorney general for title and summary.
The third measure opposed by Cal-Tax is proposed by Howard Owens, veteran political activist for public employee unions. It would, among other things, prohibit for-profit corporations from making contributions and expenditures for state or local elections. This initiative is in circulation and requires 433,269 signatures by December 12 to make the June ballot.