Hullabaloo

Monday, August 27, 2012

 
Maybe taxes aren't so bad for business after all

by David Atkins

Business leaders are starting to wake up and smell the coffee in California thanks to deft politicking by Governor Brown and the obviousness of the damage that declining revenues are doing to California's business environment:

Some of the largest corporate interests in California have poured millions of dollars into an initiative campaign this year, as they have many times before. But this time, they're not asking voters to ease industry regulations or limit government power. Instead, they want approval of an $8-billion-a-year tax hike pushed by Gov. Jerry Brown.

Since taking office more than 18 months ago, the Democratic governor has held dozens of meetings with such unnatural allies as oil companies, insurers and telecommunications interests that typically stand with Republicans, taking stock of their concerns and pitching them on the need for higher taxes. Some paid for polling that helped guide the governor as he put his initiative together.

To rally them to his cause, he cast aside several ideas — new levies on oil extraction, soft drinks or alcohol, for example — that have proved more popular with voters than his blend of temporary sales and income taxes.

He opted for a quarter-cent hike in sales taxes and an increase of 1 to 3 percentage points on individual incomes of more than $250,000 after assurances from business leaders that even if they did not wholeheartedly embrace Proposition 30, they would not reach into their deep pockets to wage war against it. So far, it seems to be working.

"I think mostly we see the governor wanting to do the right things for the state's economy," said Jim Wunderman, president of the Bay Area Council business group. He has met several times with Brown, and the group will decide its position on Proposition 30 next month.

Labor unions and Democratic lawmakers spent almost $7 million qualifying Proposition 30 for the ballot. And Democratic interests contributed about 40% of the more than $10.3 million Brown has raised for the campaign ahead. But most of the governor's campaign fund — upward of $6 million — has so far come from a broad coalition of entrepreneurs, Indian tribes that own casinos and other business interests.

It is possible for major business groups to see the light of day sometimes. It's hard but not impossible. It remains to be seen whether the coalition can be held together to do the right thing in the end. But local activists on the ground will play a big role in helping make sure the progressive, pro-business choice is one the voters make in the end.

If it works, Jerry Brown's actions might be able to serve as a model for other states as well.


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thereisnospoon 8/27/2012 07:30:00 AM