The elections last November have most business communities such as Turlock scrambling for answers regarding new tax bills. After a slim couple hundred vote win in some regional areas, Democrats reigned winner over the Republicans within the Assembly and Senate in California, and are encouraging the state to increase taxes and spend more money in response to the debt crisis. But according to The Apex Group in Sacramento, businesses have no need to fear tax increases for this year.
Public Affairs Specialist for Advocacy Government Relations Paul P. Gladfelty gave a speech at TID’s Board Meeting Tuesday morning to discuss how the recent elections could influence business communities and their customers.
According to Gladfelty, there was a term limit initiative that was passed which reduced the Senate and Assembly’s terms by 2 years. In doing so, it allowed a legislator to pick whether or not they wanted to spend 12 years as a part of the Senate or Assembly.
“That makes a big difference in our world because we have a lot of legislators, who as soon as they get elected, they are thinking about new bills you need to introduce. Now you have candidates such as Adam Gray, who now can look forward to 12 years. And why does that make a difference? Because I believe that they can have a long term perspective about what they can do for their communities,” said Gladfelty.
After speaking with Gray, Gladfelty believed that there was not a need to place legislation ballots in right away. Instead, Gladfelty ensured the public that Gray wanted to learn more about issues, ask for help, and become a better representative by listening rather than implementing ideas straightaway.
Legislative leaders have just reverted back to their sessions last week. All bills introduced last year are now dead, and must be re-introduced before their deadline on Feb. 22. It is expected that 90 percent of the bills will be introduced a week before the deadline while few will trickle in throughout the month.
Though small taxes, such as service tax or split roll tax, may slightly increase and effect customers, businesses may not be directly affected.
“I don’t see that any of those taxes in the big tax scheme are going to pass this year. I think a lot of these legislators, especially alluding to the close races with the Democrats, are going to be very circumspect about passing any major tax bills this year, especially given the fact that there is not a great need to increase taxes for future revenues,” said Gladfelty.
According to The Apex Group, one of the benefits that came out of the recent election is the passing of Prop 30, which raised upper income tax brackets and introduced a small percentage increase on the state sales tax, increasing state revenues.
“Most of the legislative leadership believes that is something they can deal with,” said Gladfelty. “There will be an opportunity for a change in both houses, but it will not take place this year. I don’t think we are going to see any big budget fights this year, and we know it is always a big concern.”