Where Does Newsom Stand on Split Roll?

Friday, August 14, 2020

Page 8

In My Opinion:

Where Does Newsom Stand on Split Roll?

By Jon Coupal

Former Gov. Jerry Brown often said that he subscribed to the “canoe theory of politics”—paddle a little to the left, a little to the right and then glide down the middle. He deployed that strategy through many of the crises he had to manage. From this conservative’s perspective, he did a lot more paddling on the left than the right, which might explain why his administration often appeared to be going in circles.

Nonetheless, interests representing the private sector at least had Brown’s ear on big issues even when he pursued decidedly anti-business policies. Brown also seemed to be able to pivot in ways that didn’t appear as flip-flopping, explaining his “revised” positions on issues in obscure terms quoting either Scripture or Greek philosophers.

One such example when Brown “saw the light” was with Proposition 13 which, prior to the June election in 1978, he vigorously opposed. He openly derided Howard Jarvis as a fool and snake-oil salesman—that is, until Proposition 13 was enacted. After that, he embraced Prop. 13 to such an extent that pundits started calling him “Jerry Jarvis.” He even visited Howard and his wife Estelle at their home in L.A. on numerous occasions for taco lunches.

Brown as governor was no conservative and successfully pushed for higher taxes and fees. He is responsible for Proposition 30, which gave California the highest marginal income tax rate in the nation. He also openly embraced higher sales taxes, and he fought for the gas tax increase. But what he didn’t do is attack Proposition 13.

Today, the question is whether Gavin Newsom will tread where Jerry Brown feared to go.

Rumors abound about discussions in the horseshoe (the insider label for the governor’s office) between those aligned with public-sector labor, who never met a tax they didn’t like, and more rational heads who are probably advising Newsom that embracing split-roll is politically dangerous.

The pressure from both sides is likely intense. Last Wednesday, advocates for small businesses opposed to split roll—a shorthand term for changing Prop. 13 to allow higher property taxes on businesses—held a press conference urging Newsom to come out publicly in opposition. These weren’t big corporate interests but included the California Black Chamber of Commerce and the California Hispanic Chambers of Commerce. The speakers pointed out that Proposition 15, the split roll measure on the November ballot, is the largest property tax increase in state history at more than $11 billion per year, and that it threatens employers with higher property taxes and soaring rents because most small businesses rent their spaces under leases requiring them to pay any increased property tax.

As Newsom weighs his options on split roll, he needs to consider the nascent recall effort against him that is underway. It wouldn’t take much to push some organization or wealthy individual over the brink.

Newsom’s lack of clarity over shutdowns, seemingly petulant retaliation against conservative communities and his failure to challenge public-sector labor groups over their outrageous demands is creating resentment among those who work in the economic sectors in California that actually create jobs and produce tax revenue.

We’re not big fans of recalls generally because, like Forrest Gump’s box of chocolates, you never know what you’re going to get. On the other hand, voters successfully recalled both Gray Davis and Josh Newman for their “let them eat cake” attitude toward the taxpaying public. If Newsom endorses split roll and invests some of his political capital to assist its passage, don’t be surprised if another recall quickly gains traction.