California’s Tax Aversion Complicates Budget Math
OAKLAND, Calif. — For nearly two months, Gov. Jerry Brown has been immersed in a furious effort to win the support of the Legislature for his proposal to close a $26.6 billion budget gap with spending cuts and by asking voters to approve $12 billion in taxes in a special election this June.
Yet even if Mr. Brown rallies the Legislature behind the plan in the coming weeks — no small matter, given that he needs the support of two-thirds of lawmakers to put a tax measure on the ballot — the fight in Sacramento might prove to be the easy part.
Mr. Brown would then face the challenge of persuading voters to support extensions of sales, personal and vehicle registration taxes in a national environment where hostility to taxes is soaring, and in a state that, no matter its propensity for electing Democrats, has repeatedly rejected tax initiatives. And one of the major national antitax advocates — Grover Norquist of Americans for Tax Reform — has intervened, pressuring Republicans here not to give Mr. Brown the votes to put the measure on the ballot, and pledging to make certain voters defeat it if they do.
The stakes are high, not only for the future of a state that has been under fiscal siege for three years — without the tax increases, Mr. Brown and lawmakers would have to make $26.6 billion in cuts — but for Mr. Brown’s governorship as well.
“It’s tough; it’s very tough,” said John A. Perez, a Democrat who is the speaker of the Assembly. “But it’s doable.”
Even with the cloud of uncertainty in Sacramento, Mr. Brown’s aides and Democratic leaders have quietly begun laying the groundwork for a campaign on behalf of the tax extensions that is expected to cost $40 million to $60 million, a huge amount of money reflecting the cost of statewide television advertising here. Much of that money would come from state labor unions. Labor groups are already running polls and conducting focus groups that have, officials said, found great but not insurmountable resistance to tax increases.
One lesson from those polls and focus groups that Mr. Brown has already incorporated into his speeches: emphasizing that these are extensions of taxes that people are already paying, rather than new taxes.
Mr. Brown’s advisers have studied the tactics used one of the few times voters supported a tax increase — in 1993, when Gov. Pete Wilson, a Republican, won approval for an extension of a half-cent sales tax.
Mr. Brown’s aides said it was critical that the measure be perceived as having bipartisan support in the polarized capital, even if it meant just counting the five Republican lawmakers Mr. Brown will need to reach the two-thirds threshold. (In 1993, Mr. Wilson and the Assembly speaker at the time, Willie L. Brown Jr., a Democrat, teamed up to campaign for the half-cent sales tax extension.)
Democrats plan to directly link the tax surcharges to education and public safety. (Mr. Wilson linked his sales tax surcharge to saving public safety jobs; it did not hurt that in the midst of the campaign, some of the worst wildfires in the history of California swept the hills of Malibu, producing images of firefighters in action on the evening news.)
In addition, Democrats said, Mr. Brown would seek to make the case that after years of stopgap approaches to the state’s mounting budget problems, this one would, barring any calamity, legitimately balance the budget and put the state on a road to normalcy.
“Most of the surveys we review say essentially the same thing: If the people believe that this is a fair solution and that it actually has the real possibility of putting the fiscal crisis behind us, that they will support it,” said Darrell Steinberg, a Democrat and the president pro tem of the State Senate. “People want us to get on with it.”
Even at these early stages, there are disagreements. Some Democrats argued that Mr. Brown has to hit hard in warning about what would be cut if the tax extensions were not enacted. At the same time, Mr. Brown has warned against alarmism, saying that would backfire in a state that is, after three years of a budget debacle, almost hostile to public officials on budget issues.
History suggests the challenges facing the governor. In 2009, an effort by Arnold Schwarzenegger, the Republican governor, and Democratic leaders to win approval of similar tax extensions failed. “We ended up beating those taxes two to one after being outspent 20 to one,” said Jon Coupal, president of the Howard Jarvis Taxpayers Association. “And we are going to have a lot more resources this time. We won’t show up to a gunfight with a knife.”
Before last year’s elections, Mr. Norquist’s group obtained signatures on a no-tax pledge from all 27 Republicans in the Assembly and 12 of the 15 Republicans in the Senate. Mr. Norquist noted that Republican lawmakers in California who had voted for tax increases before had lost and made clear he intended to make certain that happened again if any of the signers gave Mr. Brown the votes to put the taxes on the ballot.
“I think it’s extremely unlikely and I’d be very disappointed — my feelings will be hurt — if these people break their word to the people of California,” Mr. Norquist said. “The people of California will crush them if they break their promise.”
Mr. Brown’s advisers and Democratic legislative leaders said they were hopeful of picking off enough Republicans to get the taxes on the ballot by making the argument that they were not voting for tax increases — and thus breaking their pledge to Mr. Norquist — but for giving voters here the right to decide what they want.
Mr. Wilson won support for his tax initiative by a considerable margin: 58 percent of voters passed that surcharge. In this environment, Mr. Brown would be happy to win by a single percentage point.
“And remember this,” said Dan Schnur, who was Mr. Wilson’s chief spokesman at the time. “You had a Democratic Legislature and a Republican governor working in lock step. The tax was earmarked to go to firefighters. And on the day of the vote, you had raging fires going on in Malibu so people in Southern California going to vote saw fires on their way to the ballot box. I spent years denying that I set them.”