A highly controversial bill that would have broadly expanded local government powers of taxation has been shelved until at least 2012. Instead, Senate President Darrell Steinberg said during an interview that he, state democrats, and the Governor are hoping to work on a broadly supported bill that would incorporate the powers proposed in SB 23 x1, as well as incorporate concerns of the business community.

The bill, which had already passed the Senate, has been sent to the Assembly, but Steinberg said he has no intention of pursuing its passage.

The bill would have granted local officials to solicit the approval of voters for a variety of taxes, including cars and income tax. Recent polling showed that 60% of voters would be supportive of a more narrowly drawn power, limited to cigarettes, sugary drinks, liquor and oil extraction.

From the Los Angeles Times:

The top Democrat in the state Senate said he is shelving until 2012 one of the year’s most explosive legislative gambits: a proposed law to grant cities, counties and more than 1,000 school districts broad new taxing authority.

The bill, which has already passed through the state Senate, would have allowed local officials, with approval of voters, to enact new taxes on things including income, cars, alcohol and medical marijuana. Business and taxpayer groups mobilized against it, threatening to fight it at the ballot.

In an interview, Senate President Pro Tem Darrell Steinberg (D-Sacramento) said he was tabling his measure as Democrats and Gov. Jerry Brown work to stitch together a political alliance — that would hopefully include some of the business groups angered by his bill — to push for a statewide tax initiative next year.

Read the full article here.