Two Job Killers Imposing Targeted Taxes Stalled

Two California Chamber of Commerce job killer carryover bills imposing new taxes have stalled in the Senate, the house in which they were introduced last year. Both CalChamber-opposed SB 37 (Skinner; D-Berkeley), a staggering corporate tax hike, and SB 246 (Wieckowski; D-Fremont), a targeted tax on oil and gas operators, were scheduled to be considered by the Senate Governance and Finance Committee last week. But shortly before the January 15 committee hearing, the author removed SB 246 from the committee agenda. The hearing on SB 37 proceeded, with several committee members voicing concerns. The bill was amended and referred to the Senate Rules Committee. Less than 10 days after its launch, Impact California, the CalChamber’s rebranded grassroots program, helped bring to the attention of lawmakers the reasons to oppose both targeted bills.

SB 246 unfairly targets one industry by imposing a 10% oil and gas severance tax onto an oil and gas operator, adding another layer of taxes onto this industry that will significantly increase the costs of doing business, thereby increasing prices paid by consumers for goods and services in this expensive state as well. Californians pay the highest consumer prices in the nation for gas—$3.43 per gallon versus a national average of $2.58 per gallon.

SB 37 imposes a targeted tax on California business, which, for certain companies, would raise California’s corporate tax rate—already one of the highest in the nation—up to a staggering 22.26%, which amounts to an increase of about 150% and would undoubtedly discourage companies from locating or further investing in the state.

Both proposals seem unlikely to move further this year.