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California Democrats divided over COVID-19 stimulus, millionaire tax to fund economic recovery

California attempting to dig itself out of a $54 billion deficit is causing a rift among state lawmakers mirroring a national reckoning on Democratic politics.

SACRAMENTO, Calif — They show up at county meetings. They post calls to action on Instagram. In the age of coronavirus, they organize car caravans and Facebook town halls.

For Crisantema Gallardo, the 29-year-old director of Central Valley youth organizing group 99Rootz, years of groundwork are coming to a head with a high-stakes battle over how to dig California out of a sudden $54 billion deficit. Her goal: tax the state’s millionaires and commercial landlords, then reinvest the cash in communities like hers.

“It’s the cool thing right now to be talking about budgets,” Gallardo said in a video interview from Atwater, where she was raised by undocumented parents who worked in the fields. 

Gallardo’s group is fueled by outsider energy and, of late, first-hand knowledge of communities ravaged by the pandemic. But 99Rootz has also joined a coalition of powerful labor unions and other left-leaning groups, the United Front, in campaigning for a new 1%-3.5% millionaire tax proposal, AB 1253, plus this fall’s “split roll” ballot measure to raise taxes on commercial property, Prop 15.

It’s a nightmare scenario for the state’s Republican minority and business groups, which have already added the proposals to lists of “job killers” and issued familiar warnings that rich Californians will simply leave for lower-tax states. But other Democrats also oppose the new wealth tax — let alone multiple new taxes — amid a recession expected to drag on until at least 2023. 

They argue that labor unions stand to disproportionately benefit from new taxes, and that the state’s already tenuous budget could be further derailed by major financial reforms. “We have an expression in campaign politics, which is pigs get fat and hogs go to slaughter,” said David Townsend, a Sacramento political consultant who runs a business-backed political action committee that works to elect Democrats. “You’re getting a little greedy when you’re trying to tax everything that moves for your own personal interest.”

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