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The State | George Skelton CAPITOL JOURNAL

Wildfires Give Schwarzenegger a Chance to Reopen Tax Issue

October 30, 2003|George Skelton

Sacramento — Sacramento

The fires are giving Arnold Schwarzenegger a golden opportunity. They're allowing him to quickly choose the kind of governor he wants to be: practical or political.

Flexible or rigid.

We're talking taxes.

Schwarzenegger can opt to be the "never-say-never" pragmatist on taxes that he was when his gubernatorial campaign began -- the candidate who declared, after a ballyhooed meeting with economic advisors:

"You can't ever say never [on tax increases] because we could have next year an earthquake. We could have a natural disaster. We could have a terrorist attack or something like that."

Or Schwarzenegger can stick with the "read-my-lips" politician that he became while being chased by hard-right rival Sen. Tom McClintock (R-Thousand Oaks). He can be the no-risk pol who by election day was vowing:

"I guarantee I will not raise your taxes. And I guarantee I will not cut education."

Schwarzenegger also guaranteed he'd repeal the "outrageous" car tax increase, which raises $4.2 billion, most of it for local police and fire protection.

OK, so does a maelstrom of deadly wildfires devastating much of Southern California qualify as a "natural disaster" that could justify a tax increase?

The governor-elect isn't saying. But that could be a good sign that he's open-minded, not locked in some far-right position.

Asked about it in Washington Wednesday after meeting with U.S. Sen. Dianne Feinstein, Schwarzenegger told reporters:

"We are still in the middle of our problem with this disaster, so I think we should let it play out and see how much the damage is. And then we can ... come up with the ideas of how we can solve the problems, and how much the federal government is giving us and how much do we need in the state and all that. So right now is the wrong time to make that decision."

Estimates of firefighting costs are all over the lot. But state and local operations could run into the hundreds of millions, officials say. The federal government is supposed to pick up 75%, but Washington's not the most punctual bill-payer.

What we do know is that state and local governments were strapped even before the fires. The state is projecting a budget shortfall of $10 billion. Local governments are living on the edge -- wondering where Schwarzenegger's going to find his promised $4.2 billion in state funds to "back fill" their loss of car tax revenue.

Here are some old suggestions: a half-cent sales tax increase raises around $2.4 billion annually. Upping the highest income tax rate to 10.3% from 9.3% for couples earning $300,000-plus picks up $1.3 billion. Boosting the cigarette tax by 40 cents a pack generates $675 million.

Socking smokers is cowardly, but there is some logic to taxing cigarette butts for firefighting.

The worst solution would be the easiest -- adding another charge onto the state credit card. Our grandkids 20 years from now could still be paying off our bill for dousing this week's fires.

Beyond these blazes, the governor-elect and legislators should look over the horizon and ask themselves whether our current funding for fire protection and prevention is adequate. Because it clearly is not.

Indeed, the Legislature and governor this year cut the budget for the Department of Forestry and Fire Protection by $50 million.

Then they told the department to collect taxes -- euphemistically called fees -- on each parcel of property likely to be serviced by state firefighters. The tax will be $35 annually for 1.8 million mostly rural residents. This will restore the lost $50 million and the department's $600-million budget.

But if Schwarzenegger is searching for waste, this one's a lulu. Up to 10 employees of the state firefighting agency are tied up working with county assessors, choosing the parcels to be taxed. It's a misuse of abilities and misdirected mission.

Moreover, notes John Malmquist, executive director of the California Fire Chiefs Assn.: "This is a slippery slope. We don't ask each motorist to pay for protection by the Highway Patrol."

Local funding for firefighting hasn't kept pace with population and inflation, officials say.

"We have fewer firefighters today per capita than 20 years ago," contends Rick Martinez, the Sacramento fire chief and state deputy director for homeland security.

Says Bill McCammon, Alameda County fire chief and president of the California Fire Chiefs Assn.: "Revenues dedicated for fire protection over the years have been eroded. We've experienced losses in fire services -- like vegetation management programs. That's one of the first things to go in tough times."

Vegetation like exploding chaparral.

"What we're trying to do is a real education program for the new governor," says Steven C. Szalay, executive director of the California State Assn. of Counties.

Lesson No. 1: The more people who move into the brushy foothills -- or onto the mud slopes or the flood plains -- the more it's going to cost to live in California. That means higher taxes.

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