CVIndependent

Sun08252019

Last updateTue, 18 Sep 2018 1pm

When Carol Dahmen discovered the CVS receipt draped across the counter of her Carmichael kitchen, she couldn’t resist pulling out her tape measure to document it.

Her husband had purchased one single prescription. The receipt, she discovered, stretched on to contain 11 coupons before topping out at an astonishing 4 feet, 8 inches—the height of Olympic champion gymnast Simone Biles.

“This receipt is ridiculous and unnecessary,” Dahmen tweeted, endorsing the idea of scrapping paper receipts for emailed versions.

California lawmakers are considering just such a proposal—a bill by Democratic Assemblyman Phil Ting of San Francisco that would make emailed receipts the default for businesses grossing more than $1 million beginning in 2022. Businesses breaking the rule could be fined $25 a day, and up to $300 a year. Customers could still get a paper receipt, but they would have to request one—which some would undoubtedly do, rather than share their email addresses with many merchants.

The state already bans single-use plastic bags and this year, and mandated that plastic straws be available by request only. If the default e-receipt bill passes, California would once again become the first in the nation to crack down on another ubiquitous product of modern existence.

“They’re wasteful, and they’re toxic,” Ting said about receipts. “Their lack of recyclability really makes them problematic.”

Receipts increasingly are made of thermal paper, and thus printed without ink. A chemical sometimes used to coat thermal paper, Bisphenol A (BPA), mimics estrogen and has been linked to cancer; in 2012, the U.S. Food and Drug Administration banned its use in baby bottles. Receipt paper now more commonly contains Bisphenol S (BPS), a replacement for BPA that some recent studies, including one from UCLA, indicate may be just as harmful.

Opponents say this is yet another hurdle for California small businesses, and a privacy concern for customers.

“It’s trying to reduce paper waste, and that’s commendable, but we just want to make sure that in the process, we’re not creating a big digital trail for everyone who goes into a drug store,” said Bennett Cyphers, a staff technologist at the Electronic Frontier Foundation, a nonprofit digital rights group. “If the business needs to collect some kind of contact information, what do they do with that data? It’s going to be a field day for data brokers, data about what people buy, and who’s buying what and when. We’d really like that not to be the case.”

Receipts account for millions of pounds of trash waste, and an estimated 9 billion gallons of water, according to Green America, an environmental group supporting the bill.

“We don’t really need to use that paper and definitely that water,” Ting said. “We can really save those resources for something else.”

Advocates say Ting’s bill is an easy remedy. “It’s tackling one of the lowest hanging fruit,” said Nick Lapis, director of advocacy for Californians Against Waste.

Others suggest the bill could go even further. Republican Heath Flora of Ripon said in a written statement the bill could apply to more than just businesses.

“I’m open to the idea of doing away with paper receipts, but right now, this bill only applies to businesses and not the state government,” he said. “We should also have a conversation about what to tell the folks who aren’t very tech-savvy, or who otherwise don’t have access to internet services.”

But some say the bill could burden businesses in more rural parts of the state. Just 59 percent of rural households have broadband internet access, according to a report by the Public Policy Institute of California.

“To do it electronically and mandate that for everybody is, quite frankly, going to be burdensome on business,” said GOP Assemblyman Brian Dahle of Bieber. “Every day, it’s something new with the labor code. Every day, it’s something new with the regulatory environment, and this is just one more add on, making it tough to stay in business in California.”

Dahle contends that counties in his district don’t have the infrastructure in place to rely that heavily on the internet. He said his wife ran a plant nursery, and while the business had internet, the connection was weak.

Data breaches might make customers hesitant to dole out their email. Prominent business chains such as Chipotle and Whole Foods have experienced data breaches, as did Target, impacting 41 million customers.

“Our emails have been shared with the world and I don’t like that,” Dahle said. “At the end of the day, there are a lot of us who don’t want the whole world having our email.”

For those hesitant to surrender their emails to every business they patronize, Ting said, customers could simply request paper receipts.

Other opponents say the bill would make it harder for customers to locate proofs of purchase.

“Unlike other retailers, we’re subject to this state law where we’ve actually encouraged people to bring in their own bags or not use bags,” said Aaron Moreno, the senior director of government relations for the California Grocers Association. “We need to have a way to tell whether someone has bought something.”

As other retailers go, CVS is easily lampooned for printing human-sized proofs of purchase—and not just by Dahmen, a political advertising consultant who isn’t working on Ting’s bill. Customers have shared countless memes about the practical uses they have discovered for their voluminous CVS receipts (an Ohio man unfurled one as a replacement for a missing strip on the vertical blinds in his bedroom) and obscure "facts" about CVS receipts (“the sun is approximately 8 CVS receipts from earth”).

While the company does allow customers to receive electronic receipts upon request, many customers are not aware of that option or may not want to use it.

Last year, a CNBC reporter put the CEO of CVS on the spot while pulling out her own voluminous CVS receipt.

“What are we going to do about this?” CNBC’s Bertha Coombs asked.

CEO Larry Merlo urged her to enroll in the company’s digital receipt program. Coombs said she already was. Merlo smiled, and said: “Point taken.”

CALmatters.org is a nonprofit, nonpartisan media venture explaining California policies and politics.

Published in Environment

California’s resistance began before there was a resistance.

When Gov. Jerry Brown unveiled his final budget on Jan. 10, it bookended eight years of a progressive march to reduce greenhouse gases, expand health care, grant more rights to undocumented immigrants and raise the minimum wage to $15 an hour. Along the way, voters have assented by passing temporary taxes on the rich—not once, but twice. The top marginal income tax rate is now 13.3 percent, the highest state income tax rate in the country.

In short, policies that are now labeled acts of resistance to President Donald Trump were alive and ascendant in California long before Trump won the White House. But the contrasts have become much more stark.

Instead of cutting taxes, the Democratic governor and his party’s legislative leaders have passed a gas tax to help pay for aging infrastructure. Instead of trying to shift government out of the healthcare marketplace, California is looking for a way to fund single-payer health care, including coverage for undocumented immigrants. Instead of criminalizing pot, the state is looking forward to collecting taxes on marijuana sales.

In the months between now and the June deadline for a final budget, the governor and the Legislature will hammer out details. The focus this year: what to do with an expected surplus of $6.1 billion—and there are definitely differing opinions all around. Republicans say return it to California’s 40 million residents as a nice tax refund. The governor's priority is to fill up the state’s rainy-day fund. Democratic legislators mostly want to spend it.

“We have a very different approach,” said Assemblyman Phil Ting, D-San Francisco, who chairs the Assembly Budget Committee. “Our focus, the people who we think need tax relief, are the working Californians who are making less than $25,000. That’s where we want to spend our money, making sure they have money to pay rent, to pay for food.”

Rather than giving out “huge corporate tax breaks and a huge tax break for the wealthiest in this country,” Ting has a long list of how he would like to spend that extra money, including:

• Increasing the state’s Earned Income Tax Credit, which puts money into the hands of the working poor.

• Expanding Medi-Cal health care for poorer Californians to cover all remaining uninsured residents, mostly undocumented immigrants.

• Expanding early education for 4-year-olds through preschool and transitional kindergarten programs.

• Increasing college aid.

• Expanding mental and social services to reduce the number of criminals who go on to re-offend.

As supportive as Brown might be of these Democratic aspirations, his administration is urging legislative leaders to proceed with caution. The state’s tax structure is more vulnerable than ever to the stock market gains and losses of its wealthiest citizens, and the governor said California must prepare for the next economic downturn, because a mild recession could wipe away at least $20 billion a year in revenues.

He also warns of uncertainty from Washington, D.C.

“There are certain policies that are radical departures from the norm, and California will fight those, whether it’s immigration or offshore drilling,” Brown said. “We don’t know what will happen. I wouldn’t want to portray a California-Washington battle, although there are some key differences, and we’ll espouse our values.”

Since Brown was elected to begin his second stint as governor in November 2010, the state has climbed out of the recession and enjoyed economic prosperity. The unemployment rate, which topped 12 percent, now stands at 4.6 percent. Since his return, California has added 2.4 million jobs, and hourly wages are up $4.76 an hour. The state, which carried a $25 billion deficit in his first year back, has enjoyed billion-dollar surpluses in recent years, and the state now has a rainy-day fund.

The governor’s proposed $190 billion budget is dominated by spending on education (29 percent) and health care (32 percent). Health care spending has been growing particularly fast since the state embraced the Affordable Care Act, also known as Obamacare. The act not only grew the marketplace for private health plans; it allowed states to expand their Medicaid health insurance programs for the poor.

Because California is among 30 states that expanded Medicaid, the federal government is paying at least 90 percent of the cost for newly eligible enrollees. That has allowed California to draw billions in extra funding from the federal government to bolster Medi-Cal, the state’s version of the national Medicaid program. As a result, the number of people without health coverage in the state has dropped to a historic low: from 17.6 percent in the 1980s to 7.6 percent in 2016. Today, one in three Californians is covered by Medi-Cal.

Public schools too have greatly benefited since the recession, with much of the extra spending on schools going to improve teachers’ salaries.

However, if the federal government doesn’t reauthorize the Children’s Health Insurance Program for 1.3 million children, that could add more than $850 million in costs to the state over two years.

Worse, if Republicans in Washington slash Medicaid funding in 2018, the state could lose between $25 billion and $50 billion, said Chris Hoene, executive director of the California Budget and Policy Center, a progressive think tank in Sacramento.

“The reality is California could not afford the scale of the cuts the GOP has been proposing,” Hoene said. “That’s going to put state leaders in a position of deciding who gets state services and how do they fund that.”

Other factors are straining the budget. For example, pension costs for public workers continue to be one of the fastest-growing liabilities—driven by lower investment-rate assumptions, higher health care costs and longer life spans.

Voters, too, could turn on Brown and lawmakers. Early polling suggests Republicans have a decent shot at repealing a gas tax hike that went into effect late last year. Brown said at a press conference Wednesday that he believes a repeal initiative could be defeated.

The Legislature’s nonpartisan budget analyst is also urging lawmakers not to commit to too many new spending programs.

“As it crafts the 2018-19 budget and future budgets, we encourage the Legislature to consider all of the uncertainty faced by the budget in future years and continue its recent practice of building its reserve levels,” the analyst wrote.

On the flipside, Republicans are calling for a tax refund, if not an outright repeal of state income taxes. They argue that California’s high taxes chase residents out of state.

“This surplus is a direct result of Capitol Democrats overtaxing hard-working Californians,” said Assemblyman Matthew Harper, R-Huntington Beach. “Rather than expanding an ever-growing list of government programs, our leaders should figure out a way to return that money to the people who earned it in the first place.”

Assemblyman Vince Fong, R-Bakersfield, said he plans to introduce tax cuts aimed at helping families and small businesses stay in California.

“As we see all too often now, we are losing families and small businesses to neighboring states that have tax burdens much lower than California’s high-priced tax code,” Fong said on Twitter. “We have an opportunity to change that.”

Brown dismissed the refund idea, saying it would only prompt service cuts to public schools and universities later. “If you want to budget responsibly, you need big surpluses in years that are good,” he said.

Still, there’s a growing sentiment that California may have to respond to recent changes in the federal tax plan, specifically a $10,000 cap on state and local deductions that will hit millions of households.

According to the state Finance Department, the average deduction for state and local income taxes alone is nearly $16,000 per return, while state and local property taxes average less than $6,000 per return. Because a portion of those taxes will no longer be deductible, it acts as double taxation for California taxpayers.

Senate President Pro Tem Kevin de León, who is running for U.S. Senate, introduced legislation Thursday to shield Californians from bearing the costs of the tax overhaul. The bill, dubbed Protect California Taxpayers Act, would allow taxpayers to make charitable deductions to the state and receive a dollar-for-dollar tax credit on the full amount of their contribution. By having residents donate to the state government as a charitable contribution, the contribution remains deductible on federal taxes.

“The Republican tax plan gives corporations and hedge-fund managers a trillion-dollar tax cut and expects California taxpayers to foot the bill,” de León said in announcing his legislation. “We won’t allow California residents to be the casualty of this disastrous tax scheme.”

Brown was particularly vocal against the GOP tax proposal, calling it a “tax monstrosity,” but the governor expressed reservations about whether the state could sidestep federal law.

“It looks interesting,” Brown said. “But two questions: Can it work? If it does work, can the Internal Revenue Service issue a regulation and completely subvert it?”

De León responded that he was confident it would work, because similar charitable deductions have already been given out for education-based contributions.

For now, state Democrats are in agreement about a common threat.

Whether it’s federal tax changes or entitlement cuts, the leader of the Assembly, Anthony Rendon, D-Paramount, said he’s most concerned Republicans in Congress and the Trump administration will take another swipe at liberal California in 2018. “We’re worried about the next shoe to drop.”

CALmatters is a nonpartisan, nonprofit media venture explaining California policies and politics.

Published in Politics