When Jerry Brown ran for California governor in 2010, he vowed in TV ads and on the campaign trail that he would not raise taxes without voter approval.
Gavin Newsom’s position on tax increases is a lot murkier.
During the primary campaign last spring, when asked in a CapRadio interview whether he would make the same pledge that Brown did, he replied: “Yeah, I’m for tax reform, and no new massive tax reform without the support of the people of this state.”
The governor’s press office says that was not a pledge to seek voter approval on all tax increases, and adds that Newsom made no such pledge during the campaign. Asked if the governor is open to signing bills that raise taxes without voter approval, his office declined comment.
Newsom has discussed the kind of overhaul he might seek to California’s tax system.
“This economy is radically different than it was 100 years ago,” the governor said as he released his budget proposal in January. “And we're not taxing the modern economy, we're taxing the old economy.”
The state’s income tax relies disproportionately on the wealthiest taxpayers, while its sales tax applies only to products and not services.
“It means broadening the tax base, addressing the issue of volatility,” he said in that same CapRadio interview last spring. “I want to convene an effort to more broadly look at our tax code. Modernize it.”
But Newsom declined to commit to revenue-neutral tax reform.
“If there’s areas where we can tweak the mixture and actually generate more revenue in a way that doesn’t hurt folks and can unite a collective effort, then I would also maintain an openness to that,” he said in the interview.
Newsom has also indicated that he supports a controversial change to Proposition 13 known as the split roll, which would tax commercial properties at their market value rather than their purchase price.
Since his inauguration, the governor has already backed several new revenue increases, though he argues they’re all fees and penalties, not taxes.
For example, Newsom wants to charge a fee on consumers to modernize California’s 911 system to allow more effective responses and emergency texts as well as calls.
“We have an analog system in a digital world. It is rather remarkable that we haven’t made this investment in the past,” Newsom said of the state’s emergency response system on his first full day in office after meeting with his public safety cabinet members. “I know, I get it, no one’s happy when they hear that word, ‘fee.’ But we think it’s appropriate.”
The governor’s budget also calls for the creation of a “safe and affordable drinking water fund,” with revenues from “new water, fertilizer and dairy fees.” The water fee would be levied on consumers; the other two on the agriculture industry.
“Many local water systems in the state, particularly those serving small disadvantaged communities, consistently fail to provide safe drinking water to their customers,” according to the proposal in Newsom’s budget summary.
He also wants to create a statewide individual health insurance mandate that his Department of Finance projects would raise $500 million to expand subsidies for middle-class Californians who can’t afford to purchase insurance on the state’s Affordable Care Act marketplace known as Covered California.
“Let us continue the status quo,” Newsom said at his budget proposal, pointing out that President Trump and the Republican Congress repealed the national mandate created by the Affordable Care Act. “That’s all we’re arguing for.”
Newsom’s push for new state revenue sources comes despite the $21 billion surplus he projected in his January budget proposal.
Brown, in contrast, took office in 2011 when California faced a $25 billion deficit that later grew to $27 billion. His core campaign pledge was to balance the state’s budget — and put any tax extension or increase on the ballot.
In 2012, voters approved Proposition 30, which helped close the deficit by raising sales and income taxes.
Despite his 2010 pledge, Brown later signed a gas tax increase into law after winning re-election, arguing the vow only applied to his previous term.
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