The Senate Governance and Finance Committee today approved legislation that would lift longstanding limits on what taxes local governments can propose raising.
Senate Bill 653, by Senate President Pro Tem Darrell Steinberg would allow counties and school districts to adopt a wide range of taxes -- including income, vehicle, alcohol, cigarette and oil severance taxes -- with voter approval.
Steinberg said the intent of the bill is to give local governments more flexibility to fund key services like schools and public safety if lawmakers are unable to reach a budget solution that includes a statewide revenue stream.
"We cannot leave our communities with just one uncertain option when it comes to closing the 2011-12 budget and putting this fiscal crisis behind us," the Sacramento Democrat told the committee.
Opponents argued that the shift would hinder economic development for businesses and services that would have to comply with varying tax rates and hurt residents by creating unequal levels of funding for services.
Gina Rodriquez of the California Taxpayers Association warned that the bill would create more than 1,000 separate taxing authorities, what she characterized as a fragmented revenue structure that pits "county against county, school district against school district."
"(The Legislature) should be responsible for what the state looks like as a whole," she said.
Opponents also raised concerns about implementing and enforcing the local taxes.
The measure passed on a 6-2 party-line vote.
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