Represent!

Politics, government and public life for Southern California

Business sector is dubious of Props 30, 38

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49275 full

At the Avid Reader bookstore in Davis, just steps away from the UC campus, a customer digs into her wallet to purchase an early work by Jules Verne. The woman ringing up the purchase is store owner Alzada Knickerbocker.

“This is my 25th year,” Knickerbocker says.  “It’s an exciting year. So we have to celebrate that we’re still here.”  

The Avid Reader is one of two local independent bookstores that survived the arrival of Borders a decade ago. Now that the chain store has folded, Knickerbocker says things are looking up. 

But if voters pass either Prop 30 or 38, she and other small business owners who report earnings as personal income are worried. With Prop 30 for example, depending on income level, their tax rate — not their actual taxes — could rise by anywhere from 10-to-30 percent. Knickerbocker says Prop 30’s quarter-cent sales tax increase won’t help either.

“Books are not things you can change the price of," Knickerbocker says. "The price is on the back of the book.”

Knickerbocker says she supports more funding for education — she has family members who teach, and UC Davis provides customers. But she doubts state lawmakers would spend any new tax revenue wisely.  So she’ll be voting no on both tax hikes. 

Mistrust of Sacramento is also the main reason why BizFed — the Los Angeles County Business Federation — has decided to oppose Prop 30. 

“This completely political, poorly written sham of a proposition — putting that on the backs of voters is just unacceptable," says BizFed Chief Executive Officer Tracy Rafter. "Someone has to tell the truth.”

Rafter says lawmakers are asking for a tax hike instead of enacting reforms that would have saved money and helped business grow. What really bugs her is how Prop 30 has been crafted to cut $6 billion from education unless voters approve the tax hike. She says that strategy was chosen because it polls well — and scares people.

“I’m a mother," Rafter says. "I have 12- and 14-year-old girls in the school system. I’m living it every day. My 12-year old is coming home from 7th grade saying, ‘Mom, if we don’t pass Prop 30, school’s going to be out May 3rd. They’re going to cut 20 days out of the [school year].’”

Rafter says BizFed supports some taxes—the group favors an L.A, County measure for transportation projects, for example. But that’s because they know how the money will be spent. Not so with Prop 30.  

The non-partisan legislative office that provides fiscal analyses for the voter guide says Prop 30 money would go to a special fund for schools. But the estimated $6 billion a year in revenue would, in turn, free up the same amount in general fund dollars that lawmakers can spend as they see fit.

BizFed has taken no position yet on Proposition 38 because members have not asked them to. But Rafter says voters might weigh any tax hike against L.A. County's current 10.6 percent unemployment rate.

“Will that spur on confidence?," Rafter asks. "Will that make business feel like this is the place to be?"

Back at  the Avid Reader, Knickerbocker wonders whether she made the right choice to remodel the store and add staff. 

“The idea of my being taxed is already making me nervous," she says. "I go out on a limb, I make these financial commitments. I get in the extra stock, I hire the extra people and then, y’know, the state says it wants to tax me more.” 

Knickerbocker says California has it backwards. Industry drives the economy she says, creates the jobs and funds the government through taxes. If she were a politician in Sacramento, she’d figure out ways to help businesses before asking them to pay out more money.

Click here to read about support for Propositions 30 and 38.  

 

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