April 20, 2024

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CalPERS takes stance against tax initiative

3 min read
CalPERS takes stance against tax initiative

In a majority vote, the California Public Employee Retirement System board came out against a state initiative headed for November’s ballot that would limit the ability of state and local governments to levy taxes and make pension contributions.

The initiative, called the “Taxpayer Protection and Government Accountability Act,” would amend the California constitution altering the rules governing how the state and local governments can impose taxes, fees and other charges, according to an analysis by the Legislative Analyst’s Office.

“A serious threat to pension and retirement funds at the state and local level will be on the November ballot, in the form of the Taxpayer Deception Act,” said Mulissa Willette, a CalPERS board member. “As written, this careless initiative jeopardizes our ability to meet pension obligations — breaking the promise of a dignified retirement and badly needed healthcare benefits for millions of current and future retirees.”

“As written, this careless initiative jeopardizes our ability to meet pension obligations — breaking the promise of a dignified retirement and badly needed healthcare benefits for millions of current and future retirees,” said Mulissa Willette, a CalPERS board member, who voted with the pension fund’s board to oppose the measure.

CalPERS

The CalPERS board voted 9-0 Wednesday with one abstention to stand against the measure.

The act limits the state and local governments’ ability to fund services by making it harder to raise revenue and pass future ballot measures. Harming state and local government budgets would also threaten the guarantee of a dignified retirement and healthcare security for millions of Californians who dedicated their lives to public service, according to speakers at Wednesday’s board meeting.

The initiative, which is backed by the California Business Roundtable and California Business Properties Association, would require that any tax increase proposed by the state legislature or by local governing bodies or the electorate in California be approved by two-thirds of each house and a majority vote of the statewide electorate. Tax increases sought by the state electorate currently require only a majority vote.

The retroactive measure would nullify any state or local tax approved between January 1, 2022, and the measure’s effective date, at least until the measure’s requirements are met. Charges state and local governments currently define as fees would be redefined as taxes.

Many board members and state and local officials spoke against the measure, saying it would crater government budgets making it difficult to provide essential services or qualify for federal infrastructure funding by making it impossible to raise matching funds.

“If passed, it would significantly weaken the financial stability of every city and every county in state of California” and impair the ability to fund the state retirement programs,” Lisa Middletown, a CalPERS board member, said at the meeting.

Senate President Pro Tempore Toni Akins, D-San Diego, and Assembly Speaker Robert Rivas, D-Hollister, in September filed an emergency petition with the state Supreme Court seeking to remove the initiative from the ballot. Gov. Gavin Newsom supported efforts to block the measure.

It could pull the rug out from underneath millions of public servants who have worked their whole lives to retire with dignity, said California State Treasurer Fiona Ma, a CalPERS board member. “This measure’s cynical attack on California would come at a cost workers can’t afford to pay.”