Total Could Nearly Double if “Spot Bill” Is Amended to Impose Tax on Services
SACRAMENTO – California lawmakers have proposed more than $20.4 billion a year in higher taxes and fees so far during the current legislative session, the nonpartisan California Tax Foundation reported today.
“The proposals cumulatively would represent 14 percent of general fund revenue at a time when California has a record-high budget, robust reserves and an operating budget surplus,” the Tax and Fee Report states.
A $4.2 billion-per-year tax on sweetened beverages (AB 138) is the largest tax documented in the report, which is based on higher taxes, fees, assessments and charges proposed from the first day of the legislative session (December 3, 2018) through today, when the Legislature reconvenes after its summer recess. During this period, lawmakers introduced 2,647 bills and constitutional amendments, including 81 that contained higher taxes or fees.
Another bill states legislative intent to apply to sales tax to some services – a tax increase that could top $14 billion per year – but this fiscal estimate was excluded from the report’s cumulative total because the bill (SB 522, Hertzberg) is in “spot bill” form. The report notes that the tax impact could be significantly higher or lower once the bill is amended with substantive provisions.
In June, Governor Gavin Newsom signed a $214.7 billion state budget for 2019-20 that includes almost $30 billion in reserve accounts, and $13.4 billion in increased spending over the 2018-19 budget. Since taking office, Newsom has signed into law $2.81 billion in additional taxes and fees.
Last year, Governor Jerry Brown signed legislation totaling $200 million in new annual taxes and fees.
The California Tax Foundation, a nonprofit organization founded in 1980, improves public policy through independent, nonpartisan research. The California Taxpayers Association, established in 1926, is the state’s oldest and largest association representing taxpayers. CalTax is a nonpartisan, nonprofit research and advocacy association with a dual mission to guard against unnecessary taxation and to promote government efficiency.