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California industries lobby against proposed sales taxes

Golfers, wine drinkers and animal lovers are among those campaigning to persuade lawmakers not to adopt Gov. Arnold Schwarzenegger's plan for new or raised levies amid the state's budget crisis.

February 07, 2009|Jordan Rau

SACRAMENTO — Animal lovers are decrying "the Fido fine." Vintners are stirring up wine lovers with warnings that the price of a bottle could rise. And golf course owners are taking to the Web to drive home to duffers that new taxes on greens fees could hit them right in the golf bag.

A number of California industries are conducting aggressive lobbying and public relations campaigns to dissuade the Legislature from adopting Gov. Arnold Schwarzenegger's proposal to raise or impose new taxes on their businesses.

The campaigns, which started after Schwarzenegger introduced his proposals in November, are now at full steam -- even colliding in their efforts to avoid being included in whatever plan lawmakers ultimately devise to fill a $42-billion budget gap.

When the California Alliance for Golf tried to illustrate the importance of its sport to the state's economy by saying its revenues were "more than biotech," the California Biotechnology Foundation demanded a retraction, saying the biotech industry earned far more.

"We gave them a mulligan," said Patty Cooper, the foundation's executive director.

Bob Bouchier, executive director of the golf alliance, later called the dispute a misunderstanding that shouldn't distract from the unfairness of picking on golfers. His group, based in Pebble Beach, has created a website where golfers can calculate what such a tax would cost them.

The California Veterinary Medical Assn. has been equally passionate in assailing Schwarzenegger's proposal to impose state sales tax on vet services.

"It's not right for our beloved pets to suffer because of the state's financial problems," says a fact sheet on the association's website.

A tax that would liken vet services to "appliance and furniture repair," the site says, is "an insult."

The Humane Society of the United States -- fresh from its victorious Proposition 2 campaign in November that gave egg-laying chickens more room to roam -- has pounced on the "Fido fine."

Jennifer Fearing, the society's chief economist, said the group has sent e-mail alerts to 130,000 members -- a strategy similar to the one it used to rile animal activists during the initiative campaign.

The society's urges people to make "a brief, polite phone call" to the governor's office "and urge him to remove the Fido Fine from the budget proposal." Fearing said 275 animal activists have said they would converge on the Capitol on Thursday to lobby legislators.

"Euthanizing the Fido fine is at the top of our agenda," Fearing said.

Schwarzenegger estimates the proposals, some of which could start in March or April, would bring the state $1.2 billion in the fiscal year that begins in July. So far, neither party has publicly embraced the proposed taxes, but negotiations are continuing.

Each of these industries already collects sales taxes. For example, golf pro shops add sales tax to balls, clubs and other equipment, said H.D. Palmer, a spokesman for the state Department of Finance.

"We can bring revenue on line faster through these types of industries, where sales tax is currently collected, than going to an industry where it is not currently collected and we would have to start from scratch," he said.

Some others who may face new levies -- including sports teams such as the Dodgers and entertainment industry giants such the Walt Disney Co. -- are keeping a lower public profile but have dispatched their Sacramento lobbyists, people familiar with the efforts said.

"We've been working openly and very aggressively in the Capitol," said John Robinson, chief executive of the California Attractions and Parks Assn., which represents theme parks.

"We commissioned studies that find there will be a 10% drop in park attendance statewide, and that will lead to about 10,000 jobs being lost."

In addition to the broadened sales tax, Schwarzenegger's proposed budget calls for a hike in the wine tax, which would pour $585 million into the state's coffers in the next fiscal year.

The governor's office says this tax, and similar levies on beer and distilled spirits, would amount to about 5 cents more per drink. Vintners say it would be far more sobering, increasing the cost of a bottle of wine by as much as 50 cents.

The Wine Institute released an economic analysis predicting that the levy would cost at least 6,756 jobs in California because of an expected dent in wine sales. The institute said those buying inexpensive bottles would be most turned off by the higher tax.

A fact sheet created by the institute declares: "These are the wines being sought out today by many California consumers who are struggling with the economic downturn."




Gains from sales tax plan

Gov. Arnold Schwarzenegger wants to put new taxes on these services to ease the state's budget crisis. The levies would raise the following revenue amounts for the next fiscal year*:

Amusement parks: $70 million

Sporting events: $58 million

Appliance and furniture repair: $62 million

Golf: $81 million

Vehicle repair: $800 million

Veterinarians: $84 million

TOTAL: $1.2 billion

*Would begin in July; based on 6.5% state sales tax

Source: California

Department of Finance

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