Business

Column: Taxpayer 'protection' or taxpayer 'deception'? A new ballot measure aims to destroy the California state budget

Published

2 years ago

February 14, 2024

Column: Taxpayer 'protection' or taxpayer 'deception'? A new ballot measure aims to destroy the California state budget

It’s indisputable that the decline of state fiscal management in California began with the passage of Proposition 13 in 1978.

The tax-cutting initiative upended the tax structure that provided most of the revenues needed by localities and school districts, undermining the locals’ control of their own spending.

It was sold to voters as relief for beleaguered middle-class homeowners, but that was largely a scam: The chief beneficiaries have been the richest homeowners and commercial and industrial property owners, who have received billions of dollars in property tax breaks at the expense of residential owners.

These provisions discourage new government efforts no matter how urgent the problem to be addressed,…[and] hang like a shadow over budgets to be adopted in summer 2025.

— League of California Cities, et al

So it may be unsurprising that the heirs of Proposition 13’s proponents are trying to pull another fast one on California taxpayers.

Their tool, pushed chiefly by the California Business Roundtable, apartment developers and others of that ilk, is the so-called Taxpayer Protection and Government Accountability Act.

The Business Roundtable spent $6.375 million in 2022 pushing the initiative and an additional $770,000 last year; about $310,000 came in 2022 from the Howard Jarvis Taxpayers Assn., named after the chief promoter of Proposition 13, and about $400,000 last year from R.W. Selby & Co., a big apartment developer.

The initiative has been scheduled for the November ballot and will appear there unless the state Supreme Court throws it off; that’s what the measure’s critics have asked, citing numerous technical reasons.

The state’s political leadership is striking back in another way: through a public campaign targeting the Business Roundtable and its leading corporate members, and endorsed by Gov. Gavin Newsom, the Democratic legislative leaders, and organizations such as the League of California Cities, the Service Employees International Union, the California Medical Assn. and the California Teachers Assn.

Their strategem is to redefine the measure as the “Taxpayer Deception Act” and assert in public outreach that it would eliminate state funding for “paid family leave, disability insurance, gun violence prevention, and climate programs,” as well as funding for road and infrastructure maintenance.

Is this a fair assessment? It largely conforms to the judgment of the Legislative Analyst’s Office, which found that it would result in “lower annual state and local revenues, potentially substantially lower.”

As is so often the case when the business lobby starts whining about its difficulties operating in the largest economy and most vigorous consumer market in the United States, “deception” is an understatement.

But let’s start with the text of the initiative itself. Fundamentally, it would change the rule for the enactment of a tax increase from current law, which requires a two-thirds vote of each legislative chamber or passage by a majority of voters, to two-thirds of each chamber and a majority of voters. Obviously this raises the bar significantly.

The initiative also would redefine numerous governmental fees as taxes subject to the new rule. Perhaps most damaging, it would retroactively invalidate any revenue measures passed since Jan. 1, 2022, unless they’re re-ratified in 2025.

Taken together, “these provisions discourage new government efforts no matter how urgent the problem to be addressed, … hang like a shadow over budgets to be adopted in summer 2025, … and impair California governments’ ability to borrow,” a coalition of government advocacy organizations led by the League of California Cities told the Supreme Court in a friend-of-the-court letter. The prospect of passage is “already undermining certainty and impairing planning in government finance,” they wrote.

The initiative backers are plainly intent on riding generalized discontent with taxes to victory. The text bristles with shibboleths of the anti-tax movement, for example by blaming higher taxes on “unelected bureaucrats, empowered by politicians and the courts.” It ties itself to Proposition 13 by stating that its purpose is “to further protect the existing constitutional limit on property taxes” — i.e., Proposition 13.

Let’s take a closer look at the promoters’ lead slogans. One is that the initiative “stops politicians from using ‘hidden taxes’ disguised as fees to drive up the cost of government services.” This absurdly turns reality on its head. Taxes don’t “drive up” the cost of services — they’re levied to pay for government services, almost all of which are favored by taxpayers, and the disappearance of many of which would elicit a taxpayer revolt.

Another slogan holds that Californians are struggling with the “highest income tax, state sales tax, gas taxes, and poverty rate.”

It’s true that California’s top marginal income tax rate is the highest in the nation. But one can hardly blame that on “unelected bureaucrats”: Voters specifically endorsed the current top rates at the ballot box in 2004, 2012 and 2016 — the last by a 63%-37% vote.

The truth, moreover, is that the vast majority of California taxpayers don’t pay anywhere near the top rate, according to the Institute on Taxation and Economic Policy. Who does? The special interests behind this initiative. The highest marginal rates, ranging from 10.3% to 13.3%, kick in for single filers with incomes over $350,000 and couples with incomes of nearly $700,000 and higher.

California’s income tax is steeply progressive, meaning those who earn the most pay disproportionately more. The lowest-income 95% of households, with incomes of less than $25,200, pay less than about 4% of family income in state income tax; the highest 1%, with earnings of $862,000 or higher, pay nearly 9% of their earnings in income taxes.

If you’re wondering why executives sitting around the Business Roundtable might be agitating for lower taxes, there’s your answer.

It is true that the state sales tax rate of 7.5% is the highest in the nation. It’s also our most regressive tax, meaning it burdens lower-income Californians the most — costing the lowest-earning 20%, with household incomes of $25,200 or less, an average 7.6% of family income. That burden drops steadily as income rises, reaching a mere 1% for the blessed top 1% of earners.

One might reasonably ask why the income and sales tax rates are so high in California. The answer is Proposition 13, which eviscerated the property tax that was once the most stable and productive revenue source for local government. With the passage of Proposition 13, the revenue-raising responsibilities devolved to the state, which had no option for covering local needs except through the income and sales tax.

It should come as no surprise that the tax initiative backers don’t mention the property tax in their spiel. The reason is that California’s effective average property tax rate ranks only 33rd among the states; Texas and Florida, which boast of imposing no income tax, are both higher (6th and 26th, respectively, according to Census Bureau figures).

One other point bears mentioning, for perspective. It concerns who the beneficiaries are of these states’ tax structures. In Texas and Florida, it’s the rich. As a share of family income, the total tax burden in Texas falls heaviest on the lowest-income households — 12.8% of family income for those earning $21,700 or less — and lightest on the wealthiest — 4.6% of family income on the top 1%, earning $744,800 or more.

Florida looks the same: Households with earnings of $19,600 or less pay 13.2% of their income in state taxes, but the top 1%, earning $735,700 or more, fork over a mere 2.7% of their income in taxes.

California’s structure is much more equitable. All blocs in the income range, from the lowest 20% (less than $25,200) to the top 1% ($862,000 or more) shoulder burdens ranging from 10.3% to 12%.

Make no mistake: The promoters of the tax initiative want California to look more like Texas and Florida.

Gas taxes, which the initiative promoters also target, are a special case. It’s true that California’s gas tax is the highest in the country, at about 78 cents per gallon. But they also pay for benefits that most Californians would probably regret losing, including clean air, clean gas technology and road and bridge maintenance.

Also, a sizable contributor to the price Californians pay for gas is what Severin Borenstein of UC Berkeley has identified as the “mystery surcharge.” That’s a difference in gasoline prices, currently more than 40 cents per gallon extracted by oil producers, refiners or retailers at an unidentifiable point of the gasoline economy.

Borenstein originally traced the surcharge to a price spike following an explosion at Exxon Mobil’s Torrance refinery in 2015 that led to a more than year-long shutdown — but the spike never disappeared after the refinery came back online.

We can set aside the poverty rate for two reasons: First, its relationship to taxes is dubious, since households in poverty generally pay the lowest taxes (other than sales taxes) in California’s progressive system.

Second, according to the Census Bureau, California’s official poverty rate ranks 22nd among all states as measured by the percentage of residents living below the official poverty line, far better than states such as Mississippi, Alabama, Arkansas and West Virginia.

California does lead the nation in a calculation known as the supplemental poverty measure, but tax rates play almost no role in that calculation, which is based on factors such as housing costs.

Where does that leave us?

Proposition 13 was the child of legislative failure. Homeowners in the 1970s faced ever-higher property tax assessments due to a sharp run-up in home values. The Legislature could have crafted any of a myriad of solutions to deal with the crisis, but didn’t. The result was an outburst of voter fury at the ballot box in 1978, enacting the worst option of all.

Proposition 13 is what launched an era of government fees, for the simple if not obvious reason that the services and amenities California voters value have to be paid for somehow and Proposition 13 left few other options for doing so.

If California homeowners are struggling, one reason is that Proposition 13 shifted the burden of property taxes onto them: In 1975, single-family residences accounted for 39.9% of assessed values in Los Angeles County, and commercial-industrial properties for 46.6%. By 2018, the ratio had more than reversed, with houses accounting for 57.6% and commercial-industrial properties for 28.9%.

The “Taxpayer Protection Act” will make things worse. California voters will still want their services and amenities, but funding them will be much harder, so they’ll deteriorate. Voters will get angrier, but where will they turn and who will they blame?

The enduring rule of ballot measures applies here: If you want to know who will benefit from an initiative, just look who’s putting up the cash for it, and vote accordingly. The backers of the initiative say it’s “simple,” which is the clearest sign of all that it’s anything but.

Business

With a big $46-million opening for ‘Hoppers,’ Disney and Pixar see a return to form

Published

10 hours ago

March 9, 2026

Press Room

With a big -million opening for ‘Hoppers,’ Disney and Pixar see a return to form

Walt Disney Co. and Pixar’s “Hoppers” took the box office crown this weekend in an encouraging sign for the company’s original animated films.

The film generated $46 million in ticket sales in the U.S. and Canada, marking the highest domestic opening for an original animated movie since 2017’s “Coco,” according to studio estimates. The global box office total for “Hoppers” was $88 million.

The zany movie features a young environmental advocate who “hops” her consciousness into a robotic beaver and bands together with other woodland creatures to stop a planned freeway expansion through a glade.

The film is directed by Daniel Chong, who created the Cartoon Network animated series “We Bare Bears.”

The muscular debut for “Hoppers,” as well as the strong performance from Sony Pictures Animation’s “Goat” last month, has been a positive sign for audience interest in original animated films.

Since the pandemic, theatrical returns for animated sequels have far surpassed that of original films. Disney’s “Zootopia 2,” for instance, has grossed more than $1.8 billion in global box office revenue, with more than $426 million domestically. Disney and Pixar’s 2024 hit “Inside Out 2” also crossed more than $1.6 billion globally.

By contrast, Disney and Pixar’s 2025 original film “Elio” brought in about $154 million in worldwide box office revenue.

Original films are vital to Pixar’s future, as the Emeryville, Calif.-based studio built its reputation on its string of nearly uninterrupted original blockbuster hits, including 1995’s “Toy Story” and 2004’s “The Incredibles.”

Paramount Pictures and Spyglass Media Group’s “Scream 7” came in second at the box office with $17.3 million in its second weekend in theaters. Warner Bros. Pictures’ “The Bride!,” Sony’s “Goat” and Warner Bros.’ “Wuthering Heights” rounded out the top five at the box office, according to data from Comscore.

With several strong releases, as well as popular holdover films from 2025 that continue to bring in revenue, the first few months at the box office have been a notable improvement over last year’s dismal first quarter.

Domestic box office revenue so far is up more than 12% compared with the same time period in 2025, according to Comscore.

Business

Hundreds of applications, no jobs and AI competition: California’s brutal tech work landscape

Published

22 hours ago

March 8, 2026

Press Room

Hundreds of applications, no jobs and AI competition: California’s brutal tech work landscape

Laid-off tech worker Joseph Tinner has spent almost a year hunting for a job. It has been a depressing crash course on the sea change in Silicon Valley.

The former product instructor from the San Francisco Bay Area has ridden the tech wave throughout his career, easily jumping from Verizon to Fitbit to Workday. Since losing his job early last year, the 59-year-old has hit a wall.

He applied for hundreds of roles — sometimes going through multiple rounds of consideration — only to get rejected again and again.

“It’s been a roller coaster,” he said. “It just takes a lot of resilience, honestly, to be in this job market.”

He isn’t alone.

Tech companies that aggressively hired during the COVID-19 pandemic have been slashing tens of thousands of jobs. For workers like Tinner, it has been a rough realization that the Silicon Valley shakeout is stretching into another year.

Just last week, Block — the financial tech company that owns payment services Square, Cash App and Afterpay — said it is laying off 4,000 people, or half of its workforce.

Many other tech companies outside the hot artificial intelligence sector are slashing staff. Block blamed AI, saying the powerful technology means it no longer needs as many people.

“The intelligence tools we’re creating and using, paired with smaller and flatter teams, are enabling a new way of working which fundamentally changes what it means to build and run a company,” Jack Dorsey, the co-founder of Block and a founder of Twitter, said in a post on X.

U.S.-based tech employers announced more than 33,000 job cuts from January to February, up 51% compared with the same period last year, the outplacement firm Challenger, Gray & Christmas said Thursday.

Andy Challenger, workplace expert and chief revenue officer for the firm, said he used to be skeptical that companies could replace workers with AI, but he’s starting to become convinced.

“Artificial intelligence has overtaken the attention of these companies in such a dramatic way,” he said.

Mass layoffs in the tech industry started in 2022, after a hiring surge during the pandemic, when demand for online services increased as people were stuck at home.

But many of the world’s most powerful tech companies have continued cutting, even as their profits have grown. They’ve cited various reasons for layoffs, from strategic shifts and restructuring to pivoting to smaller teams and fewer managers.

An advertisement promoting an AI-powered company is seen downtown on Thursday, Oct. 16, 2025 in San Francisco, CA.

(Manuel Orbegozo/For The Times)

Tech companies such as EBay, Meta, Google, Autodesk, Pinterest, Salesforce and others have been shrinking their workforces. Layoffs have also hit the media and entertainment companies, including Los Angeles video game developer Riot Games.

On LinkedIn, laid-off workers who have been out of work — some for more than two years — have been asking for help finding a job. They’ve been sharing stories about their financial and emotional struggles, including losing their confidence, homes and savings as they search for work.

Tech workers who have seen their employers grow over the last decade have noticed a shift in corporate culture. Workers who have been laid off before said it has been tougher and taken longer to land a new job than in previous years.

A longtime Salesforce employee, who was recently laid off and asked to remain anonymous, concerned that speaking to the media could affect their severance, said the sales software company used to be more focused on helping its employees. Salesforce broadcast this value by highlighting its “ohana,” culture, using the Hawaiian word for family.

“I was just incredibly grateful every day to be able to wake up and make a positive change in the world,” the worker said. “I thought that the company was devoted to the same thing.”

But the tone at Salesforce shifted in 2023 as the company faced pressure to cut costs and increase profits. New leaders came in, and the focus changed.

“The company is trying to erase any semblance of the way that it used to be,” the worker said.

Salesforce has said AI is helping it squeeze more profit from fewer people.

“AI is doing 30% to 50% of the work at Salesforce now,” the company’s co-founder and Chief Executive Marc Benioff told Bloomberg.

Salesforce didn’t respond to a request for comment.

Marc Benioff, CEO of Salesforce Inc., during a Bloomberg Television interview at the World Economic Forum in Davos,

Although technology is changing the way people work, experts and even some AI executives think companies sometime use AI as an excuse to cut workers in what’s referred to as “AI washing.”

Enrico Moretti, a professor of economics at UC Berkeley, said other factors besides AI are fueling layoffs. As a company grows larger and matures, it doesn’t hire as much as before.

“It’s a shift in their position and the maturing of their product, and therefore the technologies and their employment needs,” he said.

Roger Lee, an entrepreneur who created a website to track layoffs, Layoffs.fyi, in 2020, said in an email that tech companies are pouring billions of dollars into AI investments, and cutting headcount helps offset those costs.

When he started tracking layoffs six years ago, Lee wanted to create awareness around tech layoffs and help laid-off workers find their next job. He never anticipated the layoffs would continue today.

“I do think 6 years of persistent layoffs have led many tech workers to re-evaluate the perceived ‘safety’ of tech jobs and their relationship with the industry overall,” he said in an email.

According to Layoffs.fyi’s latest count, there have been more than 35,000 layoffs in the tech sector worldwide so far this year.

Close to half of that total is from Amazon alone.

Unemployed tech worker Tinner was laid off from Workday, a Pleasanton company that provides a platform to businesses, universities and organizations to manage payroll, benefits, finances and other tasks.

In 2025, Workday slashed roughly 1,750 jobs, or 8.5% of its global workforce, citing a prioritization of investments in artificial intelligence and platform development. Then in February, the company said it plans to cut 2% of its workforce, or roughly 400 employees.

As job cuts pile up, Tinner is up against intense competition in a job market flooded with talent from the top companies in tech.

As he ponders his next career steps, he’s also redefining his identity and relationship with work.

He’s even tried pouring beer for fun or thought about doing more artwork.

“Maybe what I need to do is just celebrate all I’ve done instead of getting back into this rat race, on this treadmill, and look for something totally different,” he said.

Business

State Farm reaches deal to keep 17% hike in home insurance rates

Published

1 day ago

March 7, 2026

Press Room

State Farm reaches deal to keep 17% hike in home insurance rates

A brokered deal with regulators and consumer advocates will allow State Farm General to keep controversial increases in home insurance rates that took effect last year in the wake of the devastating Los Angeles wildfires.

The agreement sent to a judge late Friday cements a $530-million emergency hike in home insurance rates Insurance Commissioner Ricardo Lara negotiated with the insurer last summer.

“The agreement will provide financial relief to many policyholders while ensuring continued coverage for State Farm policyholders while California’s insurance market stabilizes,” the insurance department said in a news release.

State Farm argued the emergency hike was necessary because catastrophic fire losses jeopardized its financial ratings.

The company has reported that it paid out $6.2 billion in claims last year, largely from the wildfires, with most of the costs covered through reinsurance payments. The company has told regulators it anticipates to pay an additional $1 billion in claims.

The deal allows the insurer to keep an average 17% increase in homeowner rates. Local rates for many of the company’s 1 million home customers were much higher.

However, consumer advocates argued the agreement held the line on even higher increases and halted further policy cancellations that have deepened a crisis in the state’s insurance industry.

State Farm, California’s largest home insurer, froze new business in 2023, announced 72,000 mass non-renewals, and sought a series of rate hikes. Its average homeowners premium in California doubled from 2020 to 2024.

Under Friday’s agreement, State Farm agrees to forgo mass non-renewals in 2026 and undergo further review of its rates by 2027.

Additionally, State Farm will be required to return nearly two-thirds of its 15% increase to condominium owners, deliver a small refund to rental property owners and be able to raise premiums for renters a half a percent.

“This rate enables State Farm General to continue serving existing California customers,” the company said in a statement. “We will continue to monitor our capacity to support the risks we insure and maintain the financial strength needed to pay claims and support customers and communities when it matters most.”

If approved by an administrative law judge, the settlement will be forwarded to Lara, who is expected to back it.

The arrangement sidesteps efforts to tie State Farm’s rates to its handling of disaster claims.

Under pressure from community advocates and lawmakers, Lara in May had said he wanted the two issues evaluated together.

In June, Lara announced his department would conduct an “expedited” examination into State Farm’s market conduct. In rate hearing proceedings, agency staff sought to block discussion of State Farm’s claims handling in relation to its quest for premium hikes.

The pact does not directly address complaints of unhappy policyholders who say Lara’s administration has failed to hold State Farm accountable, which the insurance department has disputed.

A department spokesman said Lara would not comment on the matter while the rate settlement is before an administrative judge.

The Jan. 7, 2025, firestorm destroyed at least 16,000 homes, triggering more than 42,000 insurance claims. State Farm has said it has 13,500 fire and auto claims related to the fires.

The insurer has come under heavy criticism from fire victims over its handling of claims, including complaints of low payout offers, denials for toxin testing and delays in payments for living expenses. The company has declined to comment on the complaints.

Some 51,000 State Farm homeowners live in disaster areas struggling to recover from the L.A. firestorm. Regulatory filings show those areas among the hardest hit by the current hikes.

Malibu resident Chad Peters said his bill from State Farm increased 140% in the last year, from $3,500 to $8,400.

Peters said he has battled State Farm for 14 months over smoke and fire damage to his home from the Palisades fire, and that the insurer at one point attempted to cancel his coverage because the house remained unrepaired.

He called rate increases in such circumstances “ludicrous, while they’re giving everyone such a hard time with their insurance … I mean, mine has been a steep uphill battle all year long.”

Sen. Sasha Renée Pérez (D-Alhambra) had urged Lara to delay hikes until after the investigation into State Farm’s conduct.

“The fact that I have so many individuals who have not received any of their claims, that are still navigating denials and delays, who are actively running out of [living expense payments] and … facing housing insecurity — it makes me deeply concerned,” Pérez said.

Pérez, along with Sens. Ben Allen (D-Pacific Palisades) and Sade Elhawary (D-Los Angeles), in April pressed Lara to defer rate hikes until State Farm General’s claims practices could be investigated. “This was a big priority for us.”

Pérez said she would seek answers to the market conduct exam as part of a Senate inquiry into the insurance department’s handling of those complaints, along with scrutiny of the department’s discipline of a compliance officer who criticized State Farm’s handling of claims.

State Farm General, an offshoot of national insurance giant State Farm Mutual, contends it has been financially sinking as seasonal wildfires morph into catastrophic urban conflagrations that destroy towns.

In mid-2024, the company asked to raise home premiums by nearly $1 billion. Lara secured an agreement that State Farm Mutual lend its California affiliate $400 million, but the insurer would not agree to cancel plans for dropping 11,000 more policyholders.

The settlement allows State Farm to avoid a public hearing that would have forced the disclosure of solvency records, mass non-renewals and other information it said would help competitors.