The California Assembly gave final approval to a series of tax law changes on Thursday that will net the state more than $1 billion a year, handing Gov. Gavin Newsom the first of two key victories on what was one of the thorniest sticking points in budget negotiations.
The bill, AB 91, conforms parts of the state’s tax code with federal law under President Trump’s “Tax Cuts and Jobs Act,” which Congress passed in 2017.
Business and tax groups don’t oppose California tax conformity, and neither did most Assembly Republicans. But Asm. Jay Obernolte (R-Hesperia) did. He called out Democrats for cherry-picking which tax changes to include.
“The items that this bill selects to conform with seem very selectively chosen to maximize state revenue rather than an honest effort to conform to federal tax law,” Obernolte said on the Assembly floor.
Most Democrats supported the bill, and praised what most of the money would pay for: an expanded state Earned Income Tax Credit for low-income, working Californians.
But some supporters, like Asm. Eloise Gómez Reyes (D-San Bernardino), criticized the exclusion of immigrants who live in California illegally.
“For this act to truly be working families’ tax relief, it should support all families, and not short-change low-income households across California,” she said.
The Senate passed tax the conformity bill earlier this week. But its chances were murkier in the Assembly, where swing-district Democrats fear they’d be targeted for raising taxes. Newsom has been pressuring reluctant Assembly members to approve it.
That measure was one of two hard-fought victories for the governor on Thursday that required two-thirds supermajority votes in the Legislature.
As the Assembly debated tax conformity, the Senate gave final approval to an effort that reshapes and increases California’s fee on landlines and cell phones to modernize the state’s 911 system.
California’s Office of Emergency Services asked for the new fee structure to build a “next generation” emergency response system with text and data capabilities.
Nearly every Democrat supported SB 96 in the Senate Thursday — and so did two Republicans from fire-ravaged rural Northern California.
“Everybody that’s using the service should pay a little bit, and we should put together a system that allows us to keep our communities safe.” said Sen. Brian Dahle (R-Bieber).
But Sen. Pat Bates (R-Laguna Niguel) argued it’s a flawed way to pay for a worthy cause.
“It’s a blank check, it lacks a clear plan and it lacks accountability,” she said. “And most importantly, there is no assurance that this is going to happen in the near term.”
The current fee varies for each user and relies far more on landlines than cell phones. This bill instead charges a flat monthly fee on every cell phone and landline — starting January 1 at 34 cents, but authorized up to 80 cents.