Saturday, November 19, 2011

If At First You Don't Succeed, Change the Rules: The Curious Case of the State Fire Fee

If you want to understand how government works these days in California, you could do worse than to recall the strange saga of the state's new fire fee. For those of you who haven't been paying attention, the story goes like this:

1. Shortly after taking office a year ago, Jerry Brown began a push to extend California's 2009 sales and income tax hikes for five additional years. The plan required two Republican lawmakers in each house of the Legislature to agree to a ballot measure putting the tax hikes before voters. Never mind that Californians were likely to reject the increases. As the budget negotiations creeped into June, it became obvious that GOPers had no intention of agreeing to higher taxes. Brown and his Democratic colleagues in the Legislature abruptly shifted tactics: instead of seeking Republican cooperation, the Dems passed a simple majority budget without them. This involved closing the budget's remaining deficit with spending cuts, accounting maneuvers, and tax increases that weren't called tax increases. Though it was called a fee hike rather than a tax, the fire fee is only constitutional under a very, very charitable interpretation of Prop 26.

2. The state budget assumed a flat $150 fee charged to homeowners living in fire-prone areas, and estimated that it would bring in $50 million in revenues. So it came as a surprise to Sacramento that the Board of Forestry and Fire Protection announced plans in August to impose a fee of only $90, with some homeowners only being charged $70. The move came in response to significant backlash from property owners.

3. Normally, negotiations between two parties involve finding a compromise in the middle that both sides can live with. Unfortunately, that's not how negotiations work in Sacramento. Days after the fire board's proposal was announced, Brown and the Legislature returned with a counter-offer: a minimum fee of $175, with additional charges starting at $1 per acre for the first 100 acres. That's right: even though the budget they passed capped the fee at $150, Brown and lawmakers decided they wanted more than that. In retrospect, it's a little surprising to us that Sacramento doesn't decide on arbitrary tax increases like this more often.

4. Fortunately, the fire fee was one of those items lost in the avalanche of bad bills accompanying the end of the Legislative session in September. A few days of negotiations followed the $175 fee proposal, but ultimately it died in the Senate.

5. Last month, Brown returned to the issue by taking his case to the people stacking the Board of Forestry and Fire Protection with his own appointees. After appointing four new Democrats to the nine-person Board, Brown got a new vote on a $150 fee proposal (some 90% of affected homeowners will qualify for a $35 discount). Unsurprisingly, things went his way this time. With a fee in place, now all we have to do is wait for the resolution of the lawsuits that conservative groups are almost certain to bring.

1 comment:

  1. I'm waiting for the day they make all those little stickers on fruit and vegetables tax stamps and charge the producers at the farms to be sure every piece of fruit yields a few pennies now and more later.

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