Better
late than never, California lawmakers seem to be waking up to the
reality that the illegal “Fire Prevention Fee” they enacted nearly two
years ago is a complete fiasco. Even so, they are refusing to repeal it.
Instead they are scheming up ways to replace the tax with yet another
tax that’s even bigger than the first.
Where else but Sacramento would someone think the answer to a bad tax is to replace it with one even worse?
Assemblyman
Wes Chesbro, who represents many rural taxpayers on California’s North
Coast, is leading the charge to reinvent and expand the fire fee. His
proposal (AB 468) would replace the fire fee with a 4.8 percent
“surcharge” on all insured homeowners and businesses in the State of
California, regardless of location.
A similar concept was proposed by Governor Schwarzenegger in 2009 but was rejected by the Legislature.
These
payments, averaging $48 per policy and totaling an estimated $480
million per year, would find their way to a “Disaster Management,
Preparedness, and Assistance Fund.” The fund would benefit
bureaucracies, like Cal Fire, that are involved in the state’s disaster
preparedness efforts.
If
you want to discourage an activity, you tax it. Mr. Chesbro’s proposal
would make it more costly for Californians to maintain insurance
coverage on their property, punishing them for being responsible. Our
laws should encourage good behavior, not discourage it.
Call
it what you will, this new “surcharge” is really just the fire fee all
over again—this time on steroids. It aims to repackage, rebrand and
expand a tax that to date has been a colossal failure. Although the new
tax will lessen annual payments for current fire fee payers, it will
dramatically expand the number of overtaxed Californians who are forced
to pay even higher taxes.
The
original fire tax was supposed to bring in $84 million in revenue from
more than 825,000 rural California taxpayers. Due in part to billing
errors and bad addresses, the state has spent millions and only
collected about $75 million.
This
new tax would cost California property owners six times more money than
the original. About 10 million people would be impacted—twelve times as
many as right now.
The
Legislature passed the original fire fee by a simple majority vote
rather than the required two-thirds vote for new taxes. That’s why the
Howard Jarvis Taxpayers Association, with my full support, has filed a
class action lawsuit against the State of California.
As
currently drafted, Chesbro’s legislation would also only require a
simple majority vote, rather than the two-thirds vote clearly required
by Proposition 26. It’s hard to imagine the Legislature would replace an
illegal tax with an illegal tax, but stranger things have happened in
Sacramento.
It
remains to be seen what Governor Jerry Brown will do if it passes the
Legislature. Some also speculate the Governor will propose sweeping
changes to the fire fee when he unveils his May budget.
Despite
significant media coverage, to date the Governor has mostly tried to
brush off growing concerns about the fire fee and Cal Fire. In January,
the agency was forced to admit the existence of a secret $3.66 million
slush fund. In February, the agency was faulted by the Legislature’s
attorneys for illegally diverting fire fee funds to pay for wildfire
investigations. The Governor dismissed these revelations as “boring.”
Since
the original fire fee passed, Californians have voted twice to send
billions of additional tax dollars to Sacramento. Some now believe the
state’s budget is balanced and could even see surpluses in the next few
years.
Public
safety is the first priority of government. The heroic men and women
who fight wildfires and respond to emergencies and natural disasters
deserve our full support.
But
that doesn’t mean they need new taxes. Public safety should be first,
not last, in line for existing public dollars. If the state’s emergency
readiness lacks adequate funding, we need to do a better job
prioritizing the billions of dollars the state is currently spending.
With
this in mind, the Legislature would do best to repeal California’s
illegal fire tax and stop thinking about replacing it with a tax that’s
six times worse.
