California votes like a wounded animal.
In the same way a wounded animal would hiss, growl and lash out at an approaching rescuer, Californians tell pollsters they’re concerned about the high cost of living and then vote for tax increases and for politicians who say they’ll raise taxes.
Between October 16 and October 22, the Public Policy Institute of California asked 1,728 California adult residents what they think is “the most important issue facing people in California today.”
The number-one answer, cited by 45% of respondents: “Cost of living, economy, inflation, jobs.” Coming in a distant second at 12% was “housing costs, housing availability.”
In answer to the question, “Do you feel like your income is or is not keeping up with inflation,” 76% responded, “No, it isn’t.”
And then, a majority of voters in the city of Los Angeles voted to raise the sales tax to 10.75%, the third half-percent increase for city residents in two years. Measure FD was passing with a little more than 53% of the vote two days after the polls closed.
A majority of voters in five Bay Area counties voted to raise the sales tax by one-half percent – 1% in San Francisco. On Thursday evening, Measure RTM was passing with about 61% of voters saying yes to higher sales taxes.
And roughly 64% of California voters gave their vote for governor to Xavier Becerra, who sat for a pre-election interview with KCRA’s Ashley Zavala just long enough to say he would likely impose a mileage tax, instead of voting for Steve Hilton, who said he would make California more affordable by reducing vehicle registration fees, removing extra costs that raise the price of gasoline, and cutting income taxes.
Voters passed Proposition 3 to permanently impose California’s temporary income tax rate hikes on high-earning individuals and small businesses. The top marginal tax rate in California was 9.3% before voters first approved the “temporary” rates of up to 12.3% in 2012, and then extended them in 2016. If Proposition 3 had failed, the top income tax rate would again have been 9.3%. Instead it will be 12.3% plus an extra 1% that was passed separately to apply to incomes over $1 million. There’s also a recently uncapped payroll tax that pushes California’s top income tax rate above 14% for high earners.
Voters did reject Proposition 40, a union-sponsored measure that would grab 5% of the assets of roughly 200 people who are worth $1 billion or more. It appears that voters approved Proposition 42, which bans taxes on assets entirely. These are rational outcomes, given that Prop. 40 would have amended the state constitution and opened the door for more wealth taxes on more people. Still, it seems odd for voters who are approving higher sales taxes and permanent income tax hikes to reject a new tax on very-high-wealth individuals. Why did they?
The answer can be found in campaign finance reports. Between January 1 and October17, the “Building a Better California” committee spent $429,345,101.83, mostly in opposition to the wealth tax and in support of Propositions 42, which was aimed at blocking the provisions of Proposition 40 from taking effect, as was Proposition 41, also backed by the committee. That $429 million total includes the cost of signature gathering and off-the-charts spending on political advertising. Between September 20 and October 17, the committee spent $200,545,635.60.
Imagine spending $200 million in one month on advertising. With that much money, we could have added another two feet of California high-speed rail.
Voters who say they’re worried about the high cost of living somehow passed up an opportunity to make it harder to raise local taxes. They rejected Proposition 43, which would have restored the requirement for local special (earmarked) taxes to be approved by two-thirds of voters. Court decisions have created a workaround that lets local governments coordinate with outside groups to put special taxes on the ballot through signature collection, instead of by a resolution of a city council or other government body. When citizens want to raise their own taxes, some courts have held, a two-thirds vote isn’t needed.
That’s why Measure FD in Los Angeles and Measure RTM in the Bay Area, both special taxes, can pass with less than a two-thirds vote.
The 2024 Measure A sales tax increase in Los Angeles County was also a “citizens initiative” special tax increase, as was Measure ULA, the Los Angeles “mansion tax,” in 2022.
Now that voters statewide have said no to Proposition 43, expect many more “citizens” to write tax increases that benefit their own interests, backed by well-funded advertising campaigns that may or may not tell voters the whole truth. Campaign advertising can promise the moon for a nickel and there’s nothing anybody can do about it except spend a lot of money to tell voters the rest of the story.
Speaking of a nickel, that’s how the L.A. City firefighters union, proponents of Measure FD, described the cost of their sales tax increase in the argument for the measure: “five cents on a $10 purchase.” For voters who spend no more than $10 a year, the cost of the tax is, in fact, a nickel. For everybody else, the sales tax rate in the city of L.A. is going to jump from 10.25% to 10.75% on all taxable goods purchased within the city limits.
More than 15% of L.A. city residents have a household income below the poverty line, according to the Census Bureau. Sales tax increases hit hardest on those who are least able to afford them. Can the city budget really not pay for an adequate fire department?
The PPIC poll asked, “Do you think things in California are generally going in the right direction or the wrong direction?” Fifty-nine percent of respondents chose “wrong direction.” And then they voted to keep going there.
Be grateful for navigation apps. If you ask a California voter for directions, you may never be found.
Write Susan@SusanShelley.com and follow her on X @Susan_Shelley