Chances are you’ve never heard of SB 8, a bill introduced in the California Senate on the very first day of the current legislative session. Its author is a freshman State Senator from the San Fernando Valley. But this first-term Senator is hardly a newcomer to Sacramento. Bob Hertzberg is a former State Assembly Speaker who achieved a reputation for creativity, hard work and keen political acumen during his six years in office. Now that he’s back, he has wasted no time in introducing legislation proposing sweeping changes to the state’s tax structure.
Senator Hertzberg’s bill proposes the imposition of a sales tax upon services. If the bill should become law and the extended sales tax succeeds in generating the $10 billion of new revenue Senator Hertzberg anticipates, the state’s income and corporate tax structure will undergo substantial simplification. Californians with annual incomes of up to $100,000 will face a state income tax bill of no more than $1,000, and most small business owners will see their tax bills reduced. These savings, according to Senator Hertzberg, will compensate for the expansion of the sales tax. It’s a bold proposal, one certain to spark serious and spirited discussion and debate.
At present, Senator Hertzberg says that the expanded sales tax he is proposing will not be applied to education and health care. While that bit of news should come as a relief to nonprofit private school leaders, SB 8 would, nevertheless, saddle such schools with increased costs for services. For example, SB 8 will place a sales tax on attorney’s fees.
Or will it? Attorneys comprise one of the state’s more powerful lobbies. A significant number of legislators are, themselves, lawyers, and many look to establish, or resume legal careers upon conclusion of their tenure of office. Few are eager to burn bridges to their own futures.
You can bet that California’s legal lobby will pull out all necessary stops to force a “carve-out” that exempts legal fees from the newly proposed sales tax on services. It will be argued that the tax will have the effect of denying justice to the poor. Attorneys will point out to Senator Hertzberg that within the new tax structure he proposes, there is no tax liability upon the first $50,000 of income. Therefore, the state’s poorest residents will receive no offset to help them shoulder the increased cost a regressive tax.
Attorneys won’t be the only group of service providers to seek exemptions from SB 8’s reach, but they might be the most significant. Without the support of the legal lobby the bill’s chances of passage become greatly diminished. At the same time, should Senator Hertzberg bow to pressure from attorneys and exempt legal fees from the proposed sales tax, he will in essence be forfeiting revenue needed to achieve his measure’s second prong – the simplification of the state’s tax code and reduction of the tax burden faced by the majority of Californians.
If Senator Hertzberg refuses to create “carve-outs” his bill will most likely die a quick death. If he agrees to hold attorneys’ fees exempt, however, he may feel constrained to seek out compensatory sources of revenue. Like revenue from a sales tax on private school tuition.
What if this were to happen? Could the state’s private school community amass and direct sufficient political clout to ward off the imposition of a mandate that could prove catastrophic to a considerable number of schools? Such “What if?” scenarios arise in one form or another nearly every legislative session.
Like it or not, our schools operate within a political environment. In California, that environment is relatively permissive. The flip side of the coin is that there’s ample room for increased state regulation and control. I have never been one to resort to scare tactics in order to create solidarity, but I often wonder whether it will take a potentially catastrophic piece of proposed legislation to mobilize the latent political muscle that exists in the form of hundreds of thousands of private school parents, teachers and administrators who care passionately about their children’s educations, and who have chosen a private school as the portal to their children’s future.
I hope not. That is to say, I would much prefer to see a strong private school political network coalesce around a shared commitment to the achievement of something positive. Fortunately, we have such an opportunity. It comes in the form of a quartet of current bills proposing the creative use of tax policy to stimulate private investment in education while providing a modest degree of relief to parents and teachers associated with public and private schools, alike.
You can learn more about these bill at CAPSO’s online “Action Center,” here. Most importantly, you can make your own voice heard when key bills of interest to the state’s private school community are about to be voted on by your Assembly Member or State Senator. All you need to do is join CAPSO’s distribution list.
I invite you to do so now. It doesn’t cost a cent and will only take a minute of your time. Don’t wait for a “What if?” scenario to come to fruition. Our schools are too important, and there’s no time like the present.