Proposition 26 Classifies Impact Fees as Taxes

While much of the media attention on the California ballot measures in today’s election centers on legalizing pot (prop 19) and suspending the California Global Warming Solutions Act (prop 23) there is one more that bears watching.

Proposition 26 reclassifies environmental impact fees as taxes and thus requires a 2/3 vote in the California Legislature instead of a simple majority to adopt them.  California’s requirement of a two-thirds budget approval vote dates back to near Statehood when the progressive era Governor Hiram Johnson sought to limit the influence of then special interests.

While Prop 23 is being promoted by oil refiners worried that California will force their captive refineries to bear disproportionately higher carbon taxes or fees since their products are only sold in the California markets due to the blend requirements to reduce smog.

Prop 26 is really a “Plan B” insurance policy in many ways in the event Prop 23 is rejected by voters. The money behind Prop 26 comes from California oil companies distanced themselves from Prop 23. They include Chevron, ConocoPhillips and Occidental Petroleum. Chevron put up $3.7 million and proponents for Prop 26 have outspent opponents with $16 million for Prop 26 versus less than $6 million against it.

If Prop 23 is rejected because it became the lightening rod for environmental opponents, Prop 26 is waiting in the wings to clip the wings of environmental advocates and politicians who increasingly are using “fees” as a substitute for taxes for their social re-engineering strategies and revenue aspirations.

If both Prop 23 and Prop 26 are approved by voters, global warming is dead and the use of impact fees to achieve environmental objectives and raise revenue by charging fees on politically incorrect behaviors will have been stopped dead in its tracks.