Taxes on Necessities Rejected Immediately

The ink was hardly dry Thursday on a report from Gov. George Deukemejian’s Tax Reform Advisory Commission before the governor rejected out of hand a politically explosive recommendation for a sales tax on such necessities as food and drugs.

“The commission’s report has confirmed my belief that tax reform and simplification are necessary in California,” Deukmejian said in a prepared statement issued by his office.

“I am sympathetic to a number of the ideas presented, such as the concept of reducing tax rates in exchange for eliminating certain deductions.

“However, as the debate goes forward, it should also be noted that there are certain changes I don’t intend to support, including elimination of the sales tax exemptions on food, medicine, health services and other essentials of life.”

Deukmejian also said he will resist any tampering with “the spirit and intent” of Proposition 13, the 1978 property tax-cutting initiative.

Constitutional Changes

The commission called for various constitutional changes that would affect Proposition 13, including “broadening the base in the property tax area” and accelerating appraisals on commercial and industrial property.

The Republican chief executive’s quick negative response to the report was not the first time he has said no to a study from a GOP-dominated task force that he chose. And it was in keeping with his consistent pledge not to raise general taxes, a pledge that dates to his 1982 campaign.

It also showed that he has no intention of heading into a 1986 reelection campaign with the onus of a proposal to expand the most regressive of taxes--the sales tax--in any way.

Last spring, a task force on public works, or infrastructure, issued a number of recommendations, including a proposal to raise the state gasoline tax by 5 cents a gallon to help upgrade and expand streets and highways. Deukmejian embraced some of the recommendations but pointedly ignored the gas tax hike.

The tax commission’s report took pains to emphasize that its overall recommendations would be “revenue neutral,” a bureaucratic choice of words meaning that the state overall would realize the same amount of revenue through changes in the way the money is raised.

‘Not an End’

The governor said he views the report as “a beginning, not an end, to the debate and discussion we must have in California about our tax system--particularly in view of the possibility of change in the federal tax structure.”

Although he seemed to view favorably the idea of a simplified flat tax on personal income, it was evident that the proposal to charge sales tax on everything from a head of lettuce to a doctor’s visit caught him by surprise.

He said he has asked the commission to remain in existence for another six months to “continue its analysis” and hold public hearings on its recommendations.

Senate President Pro Tem David A, Roberti (D-Los Angeles) said the governor “owes Californians a public apology for first appointing a paritsan commission on tax reform and then running for cover when it fails in its task.” Roberti described many of the commissions’s recommendations as “wholly unacceptable and outrageous in their purpose.”