Feb. 15 (Bloomberg) -- California taxpayers have nothing to fear from the new Democratic supermajorities in the state Assembly and Senate. That’s the assurance we keep hearing from the political class and interest groups in the Golden State, where Republican legislators are now reduced to irrelevancy and Democrats control two-thirds majorities to pass anything they want.
“Fortunately, there is a backstop to flagrant tax increases and immediate spending and it’s not Republicans -- it is the moderate Democrats,” according to an analysis by the Independent Insurance Agents & Brokers of California.
According to this wishful thinking, the Democratic caucus is more divided than ever, and a growing band of moderates will fill the swing-vote role that Republicans used to play, especially when the left-leaning leadership needs a two-thirds majority to pass direct tax increases and constitutional changes.
The deadline for filing new bills for the next state legislative session is a week away, so we will soon see how restrained the Democrats will be. Yet a look at the background of these moderate lawmakers shouldn’t ease high-earners’ concern about rising tax bills in California.
For instance, Henry Perea, a Fresno Democrat who leads the Assembly Moderate Caucus, has written a bill to increase or extend $2.3 billion in automotive-related fees. This is one of the Democratic majority’s first big maneuvers for the year, with committee hearings expedited.
“It is a perfect example of a bill where the environmental community and the business community came together and struck a deal to improve air quality,” Perea said in an interview last week.
If these moderates are supposed to serve as a backstop to tax increases, this is a bad omen. Perea said the proposed new fees represent a moderate approach because they were the result of a compromise with all sides represented in the negotiations.
Thus, “moderate” goals are more about process than ideology. Or more about politics. Democrats in conservative-leaning districts will occasionally take a fiscally hawkish position on a meaningless issue to burnish their moderate credentials. When it really counts, they vote as the Democratic leadership demands.
Legislators considered moderate in California would be considered left-wingers in almost any other state. They have no principled objection to increasing the size of government or the tax burden, although they tend to represent more working-class and rural areas and are less enthusiastic about some boutique policies that emanate from San Francisco and Santa Monica, such as bans on plastic bags and a proposed 1 percent tax increase on lumber products.
When it comes to keeping an eye on taxes, every Democrat in the Assembly received the lowest score from the conservative Howard Jarvis Taxpayers Association in its annual ranking of votes on tax measures. Only a handful of Democrats scored decently on the California Chamber of Commerce’s guide that ranks members’ votes on bills that would hurt economic and job growth.
Some newly elected Democratic moderates, such as Tom Daly of Anaheim and Adam Gray of Merced, have yet to cast a vote. But Gray’s endorsements and campaign positions reflected something common for most moderates -- strong support for public-sector unions.
Perea, for example, said he had no interest in new efforts to rein in public-employee benefits. Last year, the legislature passed a watered-down bill based on already modest reform measures proposed by Governor Jerry Brown, who was more concerned with ginning up public support for tax increases than reducing unfunded liabilities.
The Senate side has no official moderate caucus. Lou Correa of Anaheim is one of the few Democrats with a genuinely moderate voting record (40 out of 100 on the Jarvis scorecard). In 2007, his party’s leaders removed him and two other Democrats from their committee posts and locked them out of their offices after they tried to create a moderate caucus. Correa said that creating jobs is the top issue in his Orange County district, and that you must have people with money to do that.
“The only industry doing well here is venture capital, and that’s a case of the rich getting richer,” he said. “The steppingstone for the middle class remains manufacturing jobs, and we’re sending those out of state.”
Correa and other moderates are supporting Brown’s call for relaxing the California Environmental Quality Act, a 1970 law that allows activists to use lawsuits to slow down construction projects. Yet this crowd isn’t in favor of making government smaller. Many are advocates for the governor’s wasteful high-speed-rail project. They tend to be supporters of green energy and other subsidized projects -- anything that creates jobs. They see the environmental law as an obstacle to big, government-financed projects.
Some Democrats will occasionally buck the trend. State Senator Ted Lieu of Torrance, south of Los Angeles, recently slammed a state decision to retroactively seek taxes from 2,000 small-business owners. “California is not a banana republic,” Lieu declared. “California government should not punish innocent, law-abiding taxpayers retroactively just because it may have the power to do so.” Unfortunately, this was a rare exception from his usual nanny-state proposals and efforts to triple the much-hated car tax.
At a recent Democratic retreat in Sacramento, the leadership urged a moderate, or at least measured, course, warning legislators that they will be held responsible for anything that goes wrong in California, according to Correa. Reach for the stars, legislators were told, but do so slowly and carefully.
Republicans would complain that Democratic legislators rushed back to the Capitol and began assembling plans for raising taxes and changing the state constitution. Many of those who will join this session’s new taxing, spending and government-building efforts will call themselves moderates.
Assembly Republican leader Connie Conway told me that, as she called the new Democrats to welcome them to the Capitol, they all told her they were fiscal moderates. Conservatives won’t hold their breath.
(Steven Greenhut is vice president of the Franklin Center for Government and Public Integrity. He is based in Sacramento. The opinions expressed are his own.)
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