Huff Calls Tax Plan Merger 'Union Capitulation"

Senate Republican Leader Bob Huff (R-Diamond Bar) previously raised objections to Gov. Jerry Brown’s proposed tax initiatives planned for the November ballot.

However, Huff, Glendora's representative in the 29th District, said he sees the announcement this week that the governor would merge his plan with a competing proposal championed by Democratic lawmakers and the Restoring California Coalition as giving in to unions.

“Just days after insisting that his was the only responsible tax plan for an integrated budget solution, it looks like the Governor has capitulated by accepting the public employee union tax hike scheme,” Huff said.

“This back-room tax increase deal does not bode well for the prospects of real public employee pension reform since it is now clear that the public employee unions are controlling the entire agenda.”

The new proposal merges the governor’s plan with what has been dubbed the “Millionaire’s Tax Initiative.”

The governor and others in support of the integrated plan see the new proposal as a way to “balance the state budget, prevent further cuts to education, provide a progressive tax structure, and provide constitutional protections of public safety realignment funding.”

The changes to the original measure include:

• Lowers the proposed sales tax increase from half-cent to quarter-cent.

• Adjusts the top two upper income brackets from a 1.5 percent increase to a 2 percent increase for incomes of more than $600,000 for joint filers and from 2 percent to 3 percent for salaries of more than $1 million for joint filers. (The bracket for incomes of more than $500,000 for joint filers remains at a 1 percent increase).

• The income tax increases will be in place for an additional two years, through 2018, while the sales tax increase will still sunset after 2016.

“This united effort makes victory more likely and will go a long way toward balancing our budget and protecting our schools, universities and public safety,” Brown said in a statement.

Joshua Pechthalt, president of the California Federation of Teachers and co-chair of the Millionaire Tax Campaign, said his coalition appreciates the chance to work with the governor, Senate pro Tem Steinberg, and Speaker Perez on the proposal.

“Our values and principles are clearly reflected in this new initiative that now includes a 50 percent decrease in the sales tax rate, reduces the burden on working families and ensures a greater contribution from the 1 percent,” he said.  “These changes will generate an additional $2 billion in vital funding for the next fiscal year, and we are determined to ensure those funds benefit the communities that have been hit hardest by budget cuts and our cash-strapped higher education institutions.”

The push for the taxes hikes come at a time when school districts and public colleges and universities are struggling.  The Walnut Valley Unified School District’s Board of Education last week issued 24 layoff notices.

Thousands of students from CSU and UC campuses recently rallied at the Capitol in Sacramento to protest cuts to higher education funding and tuition increases. 

Huff and other Republican lawmakers place the blame for the cuts on a budget approved by their Democratic colleagues.  Governor Brown and state Democrats had called previously for the Legislature to put tax hikes on the ballot to avoid the cuts, but the Republicans blocked the effort.

Huff said that the proposed “top-weighted tax” would make growing state tax revenues volatile.

“This larger and longer tax scheme will inevitably lead to massive state government spending growth and set the stage for yet another budget crisis in California,” he said. “The idea that a seven-year tax increase is “temporary” defies credibility.”