No free lunch
Fire fee repeal linked to new tax
The bills are in the mail, but don’t get out your checkbooks just yet.
“The bills for the SRA fire fees have started going out,” explained Mono County District 2 Supervisor Hap Hazard on Monday. “Those who have received them can file for the class action lawsuit being solicited by the Howard Jarvis [Taxpayers] Association.”
Hazard was referring to the State Responsibility Area fire fees, which have been decried by many, including District 1 Senator Ted Gaines, as a tax, not a fee.
The SRA fire fee is the result of AB 29X, enacted by the state Legislature and Governor Jerry Brown. It imposes a $150 fee on “habitable structures” throughout California. The bills are being sent out alphabetically, by county, so Inyo and Mono county residents may not receive them for a few more weeks.
Hopefully, according to Hazard, by then the bills will be a moot point.
On Friday, Aug. 24, a repeal of the tax was proposed in Senate Bill 1040.
“The only solution to fix the injustice of this SRA fee is to completely repeal it,” Assemblymember Wesley Chesbro (D-North Coast), who is a coauthor of the repeal legislation, SB 1040 told the Lake County News. “Assessing it as a flat fee of $150 and charging someone who lives in a mobile home or cabin on the foggy, rainy North Coast the same amount as someone who owns a multimillion dollar estate in the tinder dry hills of Southern California is egregiously inequitable. The SRA fee has been rendered unworkable and the only solution is to get rid of it.”
But nothing comes for free in politics, and SB 1040 has strings attached.
According to the Ramona Sentinel, “It came attached to Assembly Bill 1500, authored by Assembly Speaker John A. Pérez who needs two Republicans in the Senate to vote with the Democrats to pass his bill. For SB 1040 to go forward, it will have to pass the assembly and the senate by midnight on Friday, Aug. 31.”
If SB 1040 were to pass, it would leave an expected $85 million on the table in uncollected fees that were earmarked for CalFire. If AB 1500 were to pass, it is expected to generate $1 billion in tax revenues from out-of-state corporations to fund middle class scholarships, according to the Ramona Sentinel. By linking SB 1040 and AB 1500, about $90 million of those tax revenues collected from AB 1500 would reportedly replace the losses from the fire fee repeal.
Some in the Legislature, while supportive of repealing the SRA fees, were skeptical of this compromise.
State Sen. Joel Anderson of the 36th District has been against the fire prevention fee from the beginning, but told the Ramona Sentinel he will not vote for SB 1040.
“The fire tax is bad public policy and should be repealed or overturned,” he stated. “However, tying two unrelated measures (SB 1040 and AB 1500) together to pressure for votes is best described as extortion.”
AB 1500 proposes that out-of-state corporations would only be able to base taxes on sales in California — the single-sales factor — instead of choosing between two tax formulas as currently allowed.
SB 1040 was authored by state Sen. Gloria Negrete McLeod (D-Chino) and is an urgency bill, written to take effect immediately if signed by the governor, and will require approval of two-thirds of the Assembly, 54 votes.
If it passes the Assembly, the bill will be immediately transmitted to the Senate for consideration.
“Repealing this fee would also remove a financial threat to local fire districts, which face an uphill battle persuading property owners to fund their agencies if they are forced to pay a $150 fee to the state,” Chesbro added in the Lake County News article. “It is these local fire agencies that are the first responders to structure fires in most rural communities.”
“Closing the loophole with AB 1500 is legitimate,” Hazard said. “SB 1040 is a good move for the people I represent.”