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A fee by any other name is a tax

Or so says a new law approved by California voters on Nov. 2.

Dictionary-and-thesaurus Proposition 26 reclassifies most Golden State regulatory fees on industry as taxes. But the action is more than just a name change.

By being deemed a tax, a measure now will need a two-thirds vote via public referendums or by government bodies before they can be enacted.

When the charges were fees, only a simple majority was necessary to enact or change the charges.

Apparently, the practical effects of the fee-to-tax change weren't that important to most voters. The ballot initiative was passed by a 53 percent to 47 percent margin.

But post-election, lots of folks are worrying about just how wide-ranging the new law's ramifications will be.

The Los Angeles Times reports that "from the Capitol in Sacramento to the boardrooms of county supervisors and city councils, lawmakers and lobbyists are scrambling to assess the fiscal and political effects of the measure, one of the most sweeping ballot-box initiatives in decades."

California environmentalists say the fee-to-tax designation and its supermajority vote requirement make it nearly impossible in the current polarized political climate to increase industry fees for cleaning up air, water and toxic waste pollution.

A similar lament is coming from the state's health advocates regarding efforts to curb smoking and alcohol abuse.

One group, however, is not complaining about the new law. Attorneys.

Companies and interest groups are expected to head to court -- a lot -- to fight over what should be a fee vs. a tax.

"This poorly drafted initiative is virtually a full-employment act for lawyers," Bill Magavern, California director of the Sierra Club, told the L.A. Times.

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