California Gov. Gavin Newsom has been one of the loudest Democratic politicians in denouncing former President Donald Trump as a threat to democracy.

Dan Walters

CalMatters

Opinion

While endorsing Vice President Kamala Harris’ campaign for the presidency this month, Newsom declared, “With our democracy at stake and our future on the line, no one is better to prosecute the case against Donald Trump’s dark vision…”

Trump is “lighting democracy on fire,” Newsom told ABC News.

Fears that a second Trump presidency could be an authoritarian nightmare are well justified, given his many declarations of what he would do if elected. However, if one needs an example of how unchecked political power undermines democracy, Newsom’s California is available.

Newsom himself has displayed a penchant for governing by decree, especially evident during the COVID-19 pandemic. Meanwhile, with his Democratic Party holding total control of state government, its officeholders feel entitled to act as they please, ignoring those who might disagree.

The ruling party’s autocratic streak was demonstrated last month, when Newsom and the Legislature passed a state budget and dozens of “trailer bills” to implement its provisions. Both the budget and the trailer bills could be enacted with simple majority votes, thanks to a 2010 ballot measure, Proposition 25, that reduced the voting margin from two-thirds.

Prop. 25 was aimed at removing any Republican role in the budget, and it succeeded. However, it also created a way for governors and legislators to make changes in laws having little or nothing to do with the budget through trailer bills that could not be challenged by the referendum process.

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Controversial Trailer Bills Raise Concerns

This year’s batch of trailer bills contain two pithy examples of the syndrome.

Assembly Bill 174 contains a slew of items mostly having to do with governmental operations, but one passage exempts the Legislature’s Capitol annex project from the California Environmental Quality Act. It aims to shut down efforts by two groups critical of the massive construction project to require changes.

The self-serving CEQA exemption not only was inserted into the bill in semi-secrecy, but it continues the rather shameful practice of granting such exemptions on a case-by-case basis rather than undertaking a comprehensive reform of the often misused law.

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Retroactive Tax Law Changes: A Dangerous Precedent

The second example, Senate Bill 167, is even more outrageous. It sets a very dangerous precedent of rewriting state tax laws retroactively.

The state Franchise Tax Board recently lost an appeal of a corporate tax case involving Microsoft and a years-long dispute over the tax treatment of foreign earnings. The state Office of Tax Appeals ruled for Microsoft, thus requiring the state to refund $1.3 billion immediately, with hundreds of millions in other refunds in the future.

Rather than swallow its loss, the Franchise Tax Board persuaded Newsom’s Department of Finance to include language in SB 167 that voids the appellate ruling and potentially allows tax collectors to go back years and impose more taxes on corporations.

The implications are scary. Californians could fully pay their taxes and then years later be hit with new tax bills because the Legislature has changed tax law retroactively and perhaps even secretly.

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The California Taxpayers Association is raising alarms about the law’s potential effects, and its president, Robert Gutierrez, says a legal challenge is being considered.

“This legislation shreds well-reasoned, unanimous decisions of California’s Office of Tax Appeals and serves as a not-so-hidden tax increase,” Gutierrez said. “This is a cash grab that undermines the tax system and threatens the integrity of the tax appeals process in California, and it must be stopped.”

What could be more authoritarian than arbitrary and retroactive increases in taxes?

About the Author

Dan Walters has been a journalist for nearly 60 years, spending all but a few of those years working for California newspapers. He began his professional career in 1960, at age 16, at the Humboldt Times.

CalMatters is a public interest journalism venture committed to explaining how California’s state Capitol works and why it matters. For more columns by Dan Walters, go to calmatters.org/commentary.

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