Corporations, focused on their fiduciary duty to their investors to maximize profit, are attacking government's ability to charge for external costs like pollution. "Pigovian" taxes just became much more difficult in California:
"It was the "sleeper" ballot initiative of California's election season: Few paid heed to Proposition 26, besides the oil, tobacco and alcohol companies that funneled millions of dollars into promoting it in the final weeks of the campaign.
Now, from the Capitol in Sacramento to the boardrooms of county supervisors and city councils, lawmakers and lobbyists are scrambling to assess the fiscal and political effects of the measure, one of the most sweeping ballot-box initiatives in decades. Proposition 26 reclassifies most regulatory fees on industry as "taxes" requiring a two-thirds vote in government bodies or in public referendums, rather than a simple majority.
Approved by voters 53% to 47% on Nov. 2, it is aimed at multibillion-dollar statewide issues such as a per-barrel severance fee on oil and a cap-and-trade system for greenhouse gases. It's also aimed at local ordinances that add fees on cigarettes to pay for trash pickup and on alcohol to fund education and law enforcement programs.
Last week, the American Chemistry Council warned Los Angeles County supervisors that a proposed ordinance banning plastic grocery sacks and imposing a 10-cent fee on paper bags falls under the voting requirements of Proposition 26.
"We think it was a fair way to go," said Allan Zaremberg, chief executive of the California Chamber of Commerce, the biggest contributor to the Proposition 26 campaign. "It clarifies what is a tax and what is a fee. Right now, the public doesn't want any taxes."
Some simple charges are exempt, such as fees for marriage and fishing licenses, restaurant health inspections and property assessments.
But environmentalists and health advocates said the initiative makes it nearly impossible in the current political climate to boost industry fees for cleaning up air, water and toxic waste pollution; for curbing smoking and alcohol abuse; or for enacting new programs.
"California just got a lot harder to govern," said Bill Magavern, California director of the Sierra Club.
Proposition 26's TV campaign attacking "hidden taxes" caught many public interest groups unprepared. Hyper-focused on Proposition 23, the unsuccessful effort to suspend the state's global warming regulations, they were unable to pivot in time.
Environmentalists, unions and the Democratic Party scrambled to raise $6.6 million to fight Proposition 26, but proponents outspent them by 3 to 1."
http://articles.latimes.com/2010/nov/14/local/la-me-prop26-impact-20101115
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