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Deceptive Corporate Tax Trick Threatens Quality of Life in Cities, Jeopardizes Local Services

June 14, 2018
Sacramento Mayor Darrell Steinberg is warning that the Corporate Tax Trick initiative is disingenuous.
His warning came during a special hearing of the Assembly Local Government and Revenue and Taxation committees on June 13 to shed light on a dangerous initiative, funded by billion dollar corporations, to shift a bigger tax burden onto families and small businesses while hurting local communities.
Committee Chairs Assembly Member Cecilia Aguiar-Curry (D-Winters) and Assembly Member Autumn Burke (D-Inglewood) convened the hearing. In her opening remarks, Assembly Member Aguiar-Curry emphasized that she looks at policy from the lens of having served as mayor of a small and rural city. “I worry that we (with this initiative) will have some unintended consequences for our smaller communities.”
She closed the hearing reiterating the same point. “My concern is that I think of the entire state and the small and rural cities. I don’t forget where I came from (local government).”
Mayor Steinberg’s powerful testimony focused on how he is working to transform Sacramento’s economy and the ways in which this proposal would devastate his city and others. “It is disingenuous and a gross overreach,” said Mayor Steinberg.
He called it an abuse of authority and cautioned that it will have dramatic consequences for cities that are trying to do the right thing. Sacramento could have a $50 million hole in its budget and that will force service cuts and the loss of police and fire.
Terry Brennand with SEIU stressed that the Corporate Tax Trick is not a taxpayer revolt. “This is a thinly disguised effort to thwart local efforts to make them (corporations) pay for their impacts on communities.”
“It’s really clear that this measure favors the interest of the sponsors and it’s a vast overreach,” testified League Legislative Director Dan Carrigg. 
Assembly Member Richard Bloom (D-Santa Monica), a former Santa Monica mayor and council member, expressed his outrage. It (the Corporate Tax Trick) wants to block the will of the people and what kind of democracy do we live in where we try to institutionalize it and institutionalize it at the instance of a few corporations who want to see that happen?” …
Video from the hearing is available on the California Channel website.
Coalition Forms to Oppose Corporate Tax Trick
The League is part of the Committee to Protect Our Communities, a coalition of local government and union groups that formed to oppose the Corporate Tax Trick. If it qualifies for the November 2018 ballot, citizens will need to know that it is the opposite of taxpayer protection by making it possible for special corporate interests, such as Big Soda and Big Oil, to avoid paying the fees and taxes they currently pay, even when their business harms local communities or hurts the environment.
The Corporate Tax Trick would undercut local voters’ ability to determine what local investments are important and instead gives corporations a “free lunch” by letting them not pay their fair share for the impact of their business on California communities. The measure’s provisions would put essential municipal services — public safety, healthcare, libraries and infrastructure — at serious risk.
The corporations behind this proposal do not have the interests of families, small businesses and the communities they call home at heart. Funders, who have already dumped millions of dollars into the effort to gather signatures of the measure, come from oil, insurance, pharma, soda and others. The largest funder is the American Beverage Association, which spent over $25 million two years ago in California trying to defeat, unsuccessfully, local soda tax initiatives to prevent childhood obesity and improve the health of communities.
Fight the Corporate Tax Trick and Support CitiPAC
The League is calling on California city officials to help fight the Corporate Tax Trick and there are several ways to get involved:
  • Join the coalition: Visit the campaign website (https://protectourcommunitiesca.com), and join the coalition’s efforts to make sure this ill-conceived proposal doesn’t hurt California.
  • Support CitiPAC: Contributing to CitiPAC is another way to get involved with the League’s efforts at the ballot box. CitiPAC is the League’s political action committee that raises resources to advocate on ballot measures. Unlike candidate PAC’s, CitiPAC funds can only be used to advocate on statewide ballot measures. The funds are never used to support candidates for office. CitiPAC funds are raised through individual contributions from city officials and employees as well as through sponsorships of events throughout the year. The most direct way that city officials, staff and others can support CitiPAC and the League’s advocacy efforts is through a personal financial contribution. These funds will be used to pay for things such as signature gathering, mass media and communications, campaign consultants and voter engagement.  
Learn about the League’s 2018 Ballot Measure Activity
This is a crucial year for cities at the ballot box and in addition to opposing the Corporate Tax Trick, the League is involved in several other measures on the November statewide ballot.
After voters overwhelmingly passed Proposition 69 in June to put a lockbox on transportation funds, the League and the Coalition to Protect Local Transportation Improvements, have already begun to fight an effort to repeal SB 1, the transportation infrastructure funding package. Thousands of transportation improvement projects statewide could be halted if the over $5 billion of funding that SB 1 generates annually is taken away. This would jeopardize public safety, worsen congestion, cost drivers and taxpayers more in the long term and hurt job creation and the economy.
More details are available on the Fix Our Roads website.
To learn more about League positions on ballot measures and access related resources, please visit www.cacities.org/2018ballotmeasures.

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