Robert Lapsley is a worried man.
For one thing, he warned a group of business leaders in San Francisco Thursday, you’d better start meeting with your tax advisers right away. That’s because – if you didn’t already know – those tax increases on the wealthy passed by state voters this week are retroactive, meaning some people will be coughing up more taxes on income earned this year.
Add to that the possible end of the federal Bush-era tax cuts, and the elimination or cutting back of other tax breaks and loopholes, and the money starts to seriously add up.
The president of the California Business Roundtable didn’t stop there. The state’s cap-and-trade program, scheduled to take effect next week, will cost heavy industry as much as $3 billion in its first year of operation, and up to $6 billion a year by 2015 to purchase mandated emission allowances, he says. With the implementation of the Affordable Care Act, he says, health care costs for many businesses are also likely to rise.
Most worrisome, however, is the postelection landscape in Sacramento, where for the first time since 1933 one party has a veto-proof supermajority in both houses of the Legislature, he noted.
“The Legislature will want to backfill the spending cuts made over the last five years. Every tax increase will be called a fee. This is what we’re prepared for. These could be grim times,” said Lapsley, speaking at a conference at the City Club sponsored by the Bay Area Council Economic Institute.
Lapsley appears not to have taken much comfort from state Senate President Pro Tem Darrell Steinberg, D-Sacramento, who talked on Wednesday of “bringing in more revenue” for schools, health and human services and the courts, and placing limits on ballot initiatives – particularly, some people believe, the tax-reduction kind.