| By Sen. Megan Dahle California has its share of budget problems, and resolving them can be complicated, but I know one thing: The state shouldn’t balance its books on the backs of wildfire victims. That is why I am continuing a fight to ease the burden on those who’ve already suffered devastating losses to fires, and then face steep tax bills just when they see a dose of justice to cover their losses. Assembly Bill 429, which I am co-authoring with Assemblymembers Heather Hadwick and Tom Lackey, would waive the state income taxes on settlements stemming from the Dixie Fire, which destroyed Greenville and neighboring communities in Plumas County; the 2022 Mill Fire in Weed; and last year’s Park Fire. If you’re not a tax accountant, you’re probably shocked that the state would demand its cut from a payment after your house burns down, but the tax code has long treated settlements of litigation as income. If the power company or a timber mill start a fire and they later write checks to cover the losses, the Franchise Tax Board considers those payments taxable income. When thousands of victims of the Camp Fire in Paradise realized the settlements for their losses – already long delayed and only a fraction of their true financial costs – would be taxed, the outcry was enough to wake up Sacramento to this injustice. The Legislature has since waived taxes for payments from the PG&E Fire Victim Trust, as well as for other fires around the state. This is a just approach that helps families rebuild and communities recover. But then last year, Gov. Gavin Newsom ignored this precedent and vetoed two bills – which had passed the Legislature without a single vote in opposition – to relieve the tax burden for those who suffered losses in the Dixie and Mill fires, as well as the Bobcat Fire in Southern California. In his late September veto message, the governor tried to have it both ways. He wrote, “I wholeheartedly support the intent” of the bills but argued they should be included as part of the state budget, especially in a year of tough deficits. Given his strong support, it was reasonable enough to expect that the governor’s proposed budget in January would include that very tax relief. And his budget does include an exemption for wildfire settlements — but only for 2025 through 2029. He ignored Greenville. He ignored Weed. He ignored Bobcat. These communities and the good people trying to rebuild their lives in them deserve equal support – not a kick in the teeth from state government. January’s devastating fires in Southern California have drawn new attention to both the staggering losses that can hit a neighborhood in an instant – and to the long challenge of recovery. Both politicians and the news media pay more attention when Hollywood stars lose their beach-view Malibu homes, but I will not let anyone in Sacramento forget the needs of small mountain towns and the people who call them home. And I will continue to fight for fair treatment for the survivors of Northern California’s fires. |
