CALIFORNIA ELECTIONS / PROPOSITION 136 : Critics Say Anti-Tax Measure is Shill for Liquor Trade

A coalition of public interest groups launched a campaign to defeat Proposition 136 Monday, claiming the anti-tax measure is a “rum-soaked fraud” perpetrated by the alcohol industry to protect it and other special interests from tax increases.

The groups said the measure’s prime sponsor, Howard Jarvis Taxpayer Assn., is promoting Proposition 136 as an outgrowth of the taxpayer revolts of the late 1970s. In reality, the opponents said, it is the result of an “unholy alliance” between the organization and liquor interests whose purpose is to disenfranchise voters.

The measure would do that, they said, by requiring that no special tax increases go into effect without approval by two-thirds of the voters, thereby giving a minority the chance to overrule wishes of the majority. Special taxes are those whose revenues are designated for specific purposes.

The caustic rhetoric came from five public interest groups--League of Women Voters, California League of Cities, Common Cause of California, California Parent-Teacher Assn. and California Tax Reform Assn.--as they opened an admittedly under-financed campaign to defeat the measure on the Nov. 6 ballot.

Sponsored by anti-tax groups and backed by $2 million from alcoholic beverage interests, Proposition 136 establishes the two-thirds rule for special taxes and mandates that no local taxes can be passed without voter approval.

In a new feature of the initiative process, Proposition 136 goes into effect almost immediately, meaning if it is approved, the two-thirds rule will apply to other measures on the same ballot, including Proposition 134, an initiative that would substantially increase taxes on beer, wine and liquor.

“It’s a ballot virus,” said Lenny Goldberg, executive director of the California Tax Reform Assn. “Proposition 134 is what it takes aim at . . . but it could also knock out 133 and 129.” Proposition 129 raises taxes to fight crime and Proposition 133 raises taxes for drug enforcement and prevention.

Joel Fox, president of the Jarvis organization, acknowledged that alcohol interests have contributed “big dollars” to the measure in the hope that it would nullify Proposition 134, if that initiative gets a majority but not a two-thirds vote. He said the industry has never been the driving force behind the proposal originally designed to stop local officials from raising any tax without voter approval.

He said the measure was broadened when anti-tax groups learned several initiatives were being circulated that would raise taxes on specific products and earmark the revenue for specific programs.

Fox said each election year, beginning in 1988 when tobacco taxes were increased by Proposition 99, public interest groups have been trying to raise the tax base by “picking off one industry at a time and one group of taxpayers.”

“If you’re talking fairness I would ask them, ‘Is it fair for people who don’t smoke to raise taxes on smokers or people who don’t drink to raise taxes on drinkers or people who don’t read newspapers to raise taxes on newspapers?’ ” Fox said. “We are trying to prevent the earmarking, which is a disaster.”

Mem Levin of the League of Women Voters said her organization planned a “massive alert effort” because it considered the methods Proposition 136 suggests for eliminating earmarking as “undemocratic and underhanded.”

She said the proposal allows “one-third plus one” of the voters to defeat wishes of the majority. Under Proposition 136, she said, even if a special tax got a substantial vote it could lose if it did not get a two-thirds vote.

Sen. Ed Davis (R-Santa Clarita) and League of Cities President Don Beninghoven said they were opposing the measure because it would hamstring local governments by denying city councils and county boards the few sources for new taxes they have left. For example Davis said it would require a two-thirds vote on any local sales tax measure to raise more money for jails.

“This is a rum-soaked fraud trying to keep Californians from operating their governments in an effective fashion and it’s a selfish, last desperate attempt on the part of the booze industry to make millions of dollars of profit and evade their responsibility to support government,” Davis said.

Fox said local officials could raise taxes for general purposes as long as they got voter approval.

“We know that governments see a lot of problems they would like to resolve and they are always looking at one side--how much money they need to (solve) these problems,” Fox said. “They don’t look to the other side--how much can people afford to pay.”