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Office of the Chancellor / Public Affairs
Monday, July 21, 2003
 

San Jose Mercury News 7-20-03

Fee hikes offer option to close budget gap
By Ann E. Marimow

 

SACRAMENTO - Republican resolve to resist new taxes could lead to a budget without sales or income tax increases. But Californians will probably pay more to camp at state parks, fish for striped bass and file for divorce.

Senate Democratic budget writers have compiled a patchwork of more than $700 million in new and increased fees on everything from fire protection to phone calls -- a small step toward plugging the state's $38.2 billion shortfall.

Passing a budget requires a two-thirds vote and thus some Republican support, but the Democrat-controlled Legislature can approve these fee increases in a separate majority vote without the support of a single GOP lawmaker.

The two dozen fees, which have received little attention, are part of the Democratic budget plan. Even with them, Democrats and Republicans are still divided over about $2 billion that Democrats want to raise through new taxes and GOP lawmakers want to find in spending cuts.

Under the Democratic fee proposal, day use at state parks would increase from $3 to $5 and campsite fees would increase from $12 to $14 to raise an estimated $20 million.

Other proposed fees -- which could prove controversial with Californians -- include a new surcharge on in-state telephone calls that would raise an estimated $100 million for the California Highway Patrol.

Another would raise fees that employers pay for the worker's compensation program by $70 million. The money would backfill a cut in state funding.

Republicans view fee hikes as tax increases in disguise and have proposed eliminating all the fee increases in their own budget, which failed to pass the Senate last week. But they expect Democrats to make an end-run around them by passing a laundry list of fee increases.

``The majority of fees are bad because they are hidden taxes on business and consumers,'' said Irvine Sen. Dick Ackerman, the top Republican on the budget committee. ``But if I'm in their shoes, that's the game I'd probably play.''

Even Ackerman conceded that he supports proposed trial court fees for filing motions and court security that would help fund the court system.

The money raised from the proposed fee increases would allow Democrats to avoid some GOP-proposed cuts, such as abolishing the Coastal Commission. It would also give Republicans political cover to stick to their no-new-taxes pledge.

Democrats have already factored all $700 million in fee increases into their budget blueprint and are crossing their fingers that Republicans look the other way. At least two Republicans in the Senate and six in the Assembly would still have to vote to pass a budget that appropriates the money raised from the fee hikes.

``If they actually manage to get Democrats to not pass one of the broad-based taxes,'' said public finance economist Kim Rueben of the Public Policy Institute of California, ``then I think Republicans will be willing to go along with this because they've won on their major point.''

The budget stalemate, now entering its fourth week, is squarely in the hands of Senate President Pro Tem John Burton of San Francisco and Republican Leader Jim Brulte of Rancho Cucamonga. Most lawmakers left Sacramento for the weekend. But with no spending plan in place, legislators will put off their planned summer vacation and return to the Capitol Monday.

Lawmakers expect a deal to gel first in the Senate -- perhaps next week -- that would rely on borrowing, federal money, spending cuts and the tripling of the vehicle license fee to plug the deficit. Details are still being worked out for a complicated plan to earmark a portion of the state sales tax to pay back a $10.7 billion loan.

The Legislature's power to raise fees with less than a two-thirds vote stems from a 1991 lawsuit challenging the fees lawmakers levied on paint to test children for lead poisoning. In 1997, the state Supreme Court gave the Legislature broad authority to impose fees on industries, products or services to mitigate their societal and economic impacts.

Since then, a debate has continued over which kinds of fees can be increased by a simple majority vote.

To Burton and his fellow Democrats, there is nothing wrong with requiring people to pay for a service or holding polluters accountable for environmental clean-ups.

But to taxpayer organizations and Republicans, using fees to balance the budget ``makes some industry or consumer group a profit center for government,'' said Larry McCarthy, president of Cal-Tax. ``The Legislature is giving lots of signals and indications that it is going to take this to an extreme.''

The fees in the Senate Democrats' latest budget proposal would raise more than $700 million. But which ones actually end up in a spending plan will be sorted out in ongoing budget talks.