May 3, 2008

Assembly hopefuls debate taxes

Candidates for Mullin's seat tackle deficit

By Will Oremus / Daily News Staff Writer

Property taxes and the state budget deficit dominated a Friday morning debate between the three Democratic candidates to replace Gene Mullin, D-South San Francisco, in the state Assembly.

The debate, taped at a studio for future broadcast on the Peninsula TV politics show "The Game," brought out some concrete policy proposals from the candidates, who are jockeying for position ahead of the June 3 primary.

Two Republicans, Catherine Brinkman and Elsie Hernandez-Gufler, are also vying for the seat, but their primary is drawing less attention because the district typically votes Democratic.

All three Democratic candidates on Friday opposed Gov. Arnold Schwarzenegger's plan to close a $20 billion budget gap without raising taxes. But they differed on how much to compromise.

Richard Holober, board chair of the San Mateo County Community College District, reinforced his position as perhaps the most liberal of the candidates by saying he would hardly support any cuts at all.

"There really is not a whole lot of waste in California government," Holober said. Instead of cutting education and other programs, he suggested, "We should be increasing our revenues" by raising taxes and fees.

Jerry Hill, a San Mateo County supervisor, agreed that the state should reinstate vehicle license fees and add a severance tax on oil, bringing in a combined $6-8 billion annually. But he said those hikes would go only about halfway toward resolving the deficit, meaning cuts would need to be made as well. He suggested a 50-50 balance between cuts and revenue boosts.

Millbrae Mayor Gina Papan joined Holober in saying she would prefer tax increases to spending cuts. But she was less rigid in her stance, saying her experience at the state level as a deputy attorney general has taught her that the Democrats can't just push through the policies of their choice.

"It's got to be a give-and-take," she said. "The Republican minority has sworn to no new taxes. ... And the Democrats, thankfully, are holding the line" on opposing big cuts. "We've got to reach a balance."

Pressed by co-moderator Mark Simon, who also serves as special assistant to SamTrans CEO Mike Scanlon, both Hill and Papan struggled to name specific programs that they would consider cutting. Holober objected to the premise of the question, since he believes cuts aren't the answer.

A discussion of Proposition 13, the controversial 1978 state ballot measure that capped property taxes, elicited a similar mix of agreement and nuanced differences among the candidates.

"Prop 13 is a third rail ... but I think we need to touch it," Hill said. While he would leave the restrictions on residential property tax unchanged, he would look at closing loopholes that allow corporate property to change hands without being re-evaluated for tax purposes.

Holober was perhaps even more adamant that corporations need to shoulder a bigger share of the property tax. When Prop 13 went into effect, he said, they were paying about 60 percent statewide, while homeowners paid 40 percent. Now those proportions are reversed.

If elected, Holober said, he would find a way to end the corporate "shell games" that keep assessed valuation down.

Papan broke from her fellow candidates, warning that changes to Proposition 13 could hurt businesses at a sensitive time.

"We have to be realistic" about the effect on California's fragile economy, she said. "We cannot just say, 'tax, tax, tax.'"

The debate was the first in a series of two that will each be televised on Peninsula TV, Channel 26, several times in the coming weeks. The first airing of Friday's forum will be Sunday at 6:30 p.m., while the second debate will be taped on May 19 and air starting on May 20.



E-mail Will Oremus at woremus@dailynewsgroup.com.