Taxifornia This Week
By Rowena Itchon and Tim Anaya
This week, the Assembly and Senate face a key deadline. All bills originating must pass their “house of origin” by the end of the week (i.e., bills introduced in the Assembly must pass the Assembly). The Appropriations Committees of both houses weighed in on Friday before Memorial Day about which tax proposals would move forward and be eligible for a vote this week. Here’s a wrap-up:
Tax breaks for union members
Nerves are running raw in union halls, wrote Kerry Jackson back in November about the U.S. Supreme Court case Janus v. AFSCME. Last week, it looks like union bosses found a way to soothe those raw nerves with AB 2577 (Gray). Just passed by the Assembly Appropriations Committee, it would allow union workers to deduct their dues from state taxes.
In a decision expected in June, Janus v. AFSCME will determine if public-employee unions can force workers to support them even when workers oppose the unions’ interests. Should the U.S. Supreme Court decide that workers can’t be forced to pay dues, AB 2577 would give union members a tax break to lighten their financial dues load, helping to stave off an exodus that would drain union coffers. Californians, in effect, will collectively subsidize union dues — the bill would cost taxpayers $250 million the first year, $170 million in 2019-20, and $180 million in 2020-21. The Assembly passed the bill during Tuesday’s session.
No breaks for wall builders
The Assembly Appropriations Committee also passed AB 2355 (Ting) that would exclude any business or subcontractor that helps to “build the wall” from qualifying for manufacturing & R&D equipment tax credits, and a host of other state tax credits. In the long run, the loser won’t be the companies building the wall, but all Californians though higher costs, delays, and more lawsuits. If Trump does indeed build the wall, the California section will likely be the costliest in America.
Nothing for wildfire victims, apprenticeship training, and Californians who want to help the disabled, who need home care, or are trying to buy a house
Among the tax relief bills killed last week in the Assembly Appropriations Committee:
- AB 1765 (Quirk-Silva and Aguiar-Curry) would have authored a tax credit of up to 50 percent of the costs of disaster-related expenses not compensated for by insurance. It was aimed at helping victims of the 2017 wildfires and the Montecito mudslides.
- AB 1904 (Cervantes) would have created a state employer tax credit up to $1,000 per employee for the hiring and training of registered apprentices.
- AB 2039 (Fong) would have allowed tax deductions for contributions made to a Cal ABLE account on behalf of a beneficiary, which are tax-advantaged savings accounts for individuals with disabilities.
- AB 2703 (Mayes) would have allowed a 25 percent tax credit (up to $5000) for home care services.
- AB 2922 (Gipson) and AB 2999 (Bonta) would have allowed various tax credits for affordable housing.
Rowena Itchon is PRI senior vice president and Tim Anaya is PRI director of communications.