- Associated Press - Saturday, May 2, 2015

SACRAMENTO, Calif. (AP) - His nicknames include Huggy, Herztie and Hugsberg, child-like monikers that when combined with his freshman status in the state Senate might make it seem Bob Hertzberg is a back-bencher.

In fact, the Democrat is a major California political player with more than four decades of experience.

The former Assembly speaker has returned to the Capitol after a 12-year hiatus, bringing his clout and deal-making experience. His mere presence stoked rumors of a challenge to the Senate leader though Hertzberg dismisses any rivalry.

He held a lucrative law career and traveled the world, but he said he missed serving.

“From a business and a political perspective, I’ve never stopped thinking about politics and public policy,” Hertzberg said, adding, “I’ve learned how important California is to the rest of the world. I really understand it. I’ve built relationships all over the place. And the biggest change is me.”

His opening proposal is an ambitious tax overhaul. It centers on expanding California’s sales tax to more services, while lowering the state’s 7.5 percent base rate to as little as 4 percent. He also calls for doing away with local add-on taxes.

It would generate billions of extra dollars that he says the state could use to fund schools, local government and the university systems while providing tax credits to protect the poor. He also wants to reduce the corporate tax burden on small businesses, which he says would encourage entrepreneurship.

His pitch is timely as Democrats who have a majority in the state Legislature look for revenue to replace Gov. Jerry Brown’s soon-to-expire tax, Proposition 30. The state has billions in surplus this year but still faces a challenging budget cycle because a complex education funding formula may force lawmakers to cut other programs.

Hertzberg’s plan reflects the San Fernando Valley Democrat’s penchant for big ideas. He was in the Assembly from 1996 to 2002, and was speaker during California’s energy crisis. He tackled environmental issues, consumer protection and college scholarships for low-income students, among other policies.

After leaving because of term limits, he returned to Los Angeles working for Mayer Brown, one of the world’s biggest law firms, on real estate issues. Hertzberg continues to work for another firm, Glaser Weil.

He played a behind-the-scenes role on redistricting, term limits, top-two primary and lowering the budget vote threshold while advising the reform groups California Forward and Think Long. He also advised former Gov. Arnold Schwarzenegger, a Republican.

Hertzberg, now 60, divorced and with two grown sons, said he has the time and energy to dive into tough issues. His legislative package also includes improving voter turnout and helping the poor.

There was initial speculation that Hertzberg would challenge Senate President Pro Tem Kevin de Leon, D-Los Angeles, for the leadership post. However, Hertzberg hasn’t made such a move, saying de Leon has been generous with his support.

“I think it’s probably a little frustrating for him,” said his brother, Gerry Hertzberg, of being a freshman again. “But he’ll figure his way around.”

It’s too early to tell how far Hertzberg will get with his tax plan, which he calls the Upward Mobility Act.

Democrats and Republicans agree that California’s tax system needs updating to help tame the boom and bust cycles of the state budget. In 1950, California generated about 60 percent of its revenues from the sales tax and 12 percent from income taxes, but now it’s the inverse, with two-thirds coming from income taxes, mostly from the wealthy.

Democratic Gov. Jerry Brown has not said whether he supports Hertzberg’s plan, but he expressed skepticism, saying people may not want to be taxed on their Pilates classes.

Republican friends worry Hertzberg’s proposal would increase the tax burden.

The last reform effort in 2009 was widely panned.

In trying to close a $42 billion budget gap, Schwarzenegger proposed extending sales taxes to cover things like rounds of golf, auto repairs, veterinary care and amusement park and sporting event admissions. He met resistance and it failed.

Hertzberg is treading slowly but said his tax reform is the best alternative right now. Other ideas have included splitting commercial from residential property tax, adopting an oil severance tax, or extending Proposition 30 in some form.

“Yes, we have to take it seriously because it’s Bob Hertzberg,” said Michael Coleman, a veteran tax analyst for the League of California Cities. “There’s a lot of need for this.”

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