TAX NEWS - June 2010

California Tax: Nobody Likes a Tax Hiker

California's former GOP Assembly Leader Mike Villines is paying for breaking ranks with his party and agreeing to a package of higher taxes championed by Democrats.

In February 2009, California's GOP Assembly Leader Mike Villines broke ranks with his party and agreed to a package of higher taxes championed by Democrats in the state legislature. The immediate reaction was negative: He was forced to give up his leadership post and the tax increases were overwhelmingly rejected by voters in a statewide vote three months later.

But Mr. Villines also won plaudits from liberal elites and corporate leaders who favored the tax hikes. He collected hefty campaign contributions from big business groups and used the money to launch a candidacy for the soon-to-be vacant job of Insurance Commissioner, a statewide office. Just last month, he traveled to Boston to collect the John F. Kennedy Profiles in Courage Award for breaking with his fellow Republicans.

But everything came crashing down for Mr. Villines Tuesday when GOP primary voters turned thumbs down on his candidacy. He narrowly lost to Brian Fitzgerald, an enforcement attorney for the Insurance Commissioner's office, who spent less than $5,000 on his campaign. Of that sum, more than half was spent on filing his candidacy papers and another $1,075 went for a 43-word statement in the California Voter's Guide.

Mr. Villines, whose own campaign war chest topped out at $1.1 million, was the victim of an under-the-radar effort by conservative bloggers and activists who reminded primary voters that Mr. Villines had taken the Americans for Tax Reform pledge and then broke it. "Mike Villines was another of the sell-out Republican votes on the massive tax increase that crushed what was left of our state's economy last year, after signing a no-new-taxes pledge," wrote GOP Congressman Tom McClintock to his supporters. "Liars don't belong in government."

It may be going too far to say voters were calling Mr. Villines a liar on Tuesday night. But few apparently thought his caving in to pressure for higher taxes was an exercise in "courage." He will now be able to admire the JFK award on his mantel from his new position as private citizen.

As for Mr. FitzGerald, he sounds like a breath of fresh air. As part of his bare-bones campaign, he posted the following message: "I've been asked why I don't do mailers. . . . . Those who don't support me are the types who can't recall what happened five minutes ago and don't get what the Hell I'm talking about."