The San Diego Union-Tribune
Federal tax changes make need for state tax reform bigger than ever
By The San Diego Union-Tribune Editorial Board
As Gov. Jerry Brown loves to point out, revenue in California goes up and down like a roller coaster because of the state’s over-reliance on volatile income and capital gains taxes. This whipsaws public schools and wreaks havoc with many agencies.
Now state Sen. Bob Hertzberg, D-Van Nuys, is once again proposing to limit this problem by adding taxes on services such as legal and accounting work while using the new revenue that is generated to cut other taxes as well as to finance infrastructure projects, workforce training and education.
Hertzberg’s past efforts have faced opposition from Democrats who like the state’s high taxes on the very wealthy and from Republicans who oppose adding new categories of taxes. But as Hertzberg notes, the recent enactment of the GOP federal tax overhaul that puts a $10,000 limit on deductions for state and local taxes makes the case for state tax reform even stronger. If this doesn’t stir state lawmakers out of their complacency, maybe nothing will. That’s unfortunate because revenue volatility is a real problem with an obvious solution.