The Speaker’s Scholarship Plan: Too Good to Be True?
There’s an old adage that if something sounds too good to be true, it probably is. When it comes to politics, it nearly always is. Say for instance a politician told you he could lower the cost of sending your kids to college by 2/3rds. You’d probably respond, “Great. What’s the catch?” Your caution would […]
New Tax Interpretation Aids Farm Solar Power
As an elected member of the California State Board of Equalization, I have the unique privilege of serving as a taxpayer advocate for the citizens of California. California is the only state in the nation that has an elected tax board that is directly accountable to voters. The five-member board on which I serve administers […]
Californians Should Get Another Vote on High Speed Rail
Imagine you found the house of your dreams. The price is $450,000. You sign papers only to later learn the sellers made a mistake. The price for the house is actually $1 million. Fortunately, under California real estate law, you can back out of the deal. But if you were a California voter buying a […]
Amazon Saga Did Little to Help State Finances
Gov. Jerry Brown recently signed compromise legislation aimed at avoiding a costly ballot fight between Amazon and in-state retailers. This compromise opens the door for Amazon to build distribution centers in our state that could provide thousands of jobs for out-of-work Californians. That’s very good news. But it’s hard to dismiss the nagging suspicion that […]
Protect Main Street: Keep Proposition 13 Whole
Give
Governor Jerry Brown credit. He’s smart enough to recognize that imposing
massive property tax hikes on California’s struggling job creators will hurt,
not help, our state’s economy. And he’s willing to take heat from members of
his own party for his stand.
On August 16, Los Angeles Mayor Antonio Villaraigosa gave a speech to the
Sacramento Press Club urging "progressives" to "start thinking and acting big
again" in order to "invest… in our economy." He challenged Governor Brown to
have "the courage" to "strengthen" Proposition 13, an important taxpayer
protection measure approved by voters in 1978.
Lest anyone be confused, let me translate: Mayor Villaraigosa has no intention
of "strengthening" the property tax protections in Proposition 13. Instead he
wants to strip away those protections for business owners, including Main
Street mom-and-pop businesses like hair salons, hardware stores and
restaurants.
According the Howard Jarvis Taxpayers Association, an organization that exists
to defend Proposition 13, prior to that measure there were no limits on
property tax rates and assessments. Taxpayers’ properties could be reassessed
50% to 100% in a single year and see their bills jump accordingly. As a result
many taxpayers lost their homes and businesses.
July Sales Tax Revenue Surpassed Budget Projections by Half a Billion Dollars
Tax revenues received by the State Board of Equalization last month exceeded projections.
Although I continue to remain deeply concerned about California’s economic recovery, I’m pleased to report that our state’s budget picture—at least when it comes to sales tax—isn’t quite as bleak as it might seem.
On Tuesday, the State Controller reported that sales and use tax general fund revenues for the month of July were $977.6 million, 12.5% below the Department of Finance projection of $1.12 billion.
However, BOE actually received $1.64 billion in July, more than half a billion dollars above the budget projection.
It’s really comparing apples and oranges to talk about the state’s budget picture without acknowledging every dollar we received last month.
A Victory for California’s Small Businesses
It’s not every day a government program becomes less burdensome for small business owners and entrepreneurs, but it can happen.
In my recent op-ed “A Qualified Mess,” I described the many problems plaguing the “Qualified Purchaser Program” — a use tax collection program targeting small business owners. I invited impacted business owners to send me their feedback via a survey on my website, and I shared this feedback with my colleagues and BOE staff.
I also joined small business owners and taxpayer advocates at a press conference urging reforms to this program. This NFIB-sponsored event was well-attended and led to stories by CalWatchDog, Capital Public Radio, The Orange County Register, The Sacramento Business Journal and others.
A Temporary Tax That Never Went Away
California taxpayers are celebrating a rare victory. Despite Democrat efforts to extend them, the sweeping “temporary” tax increases of 2009 have gone away. This is an uncommon treat, as many prior tax hikes sold as “temporary” are still with us today.
As Californians enjoy the benefits of this victory, this month also marks the 20th anniversary of a prior sales tax increase that is still with us. On July 15, 1991 Californians were impaled with a "temporary" sales tax increase of 1.25%. This measure was enacted by the Legislature to address the state budget shortfall during the early 1990s economic downturn.
Fast forward to June of this year. A 2009 sales tax rate increase of 1% was set to expire on July 1, 2011. Despite a vote of the people against extending this and other temporary tax increases, Governor Jerry Brown and Democrat legislators unsuccessfully sought a five year extension of these taxes.
A Qualified Mess
Two years ago, the California Legislature enacted an onerous
law requiring business owners dubbed "qualified purchasers" to register with
the State Board of Equalization for the purpose of reporting "use tax." Like
many bad laws, this one was cooked up in an attempt to help balance the state’s
budget. As you might suspect, it hasn’t worked.
I was serving as a senator at the time and voted against
this legislation. Now, as an elected member of the State Board of Equalization,
I’m seeing firsthand the mess this law has created.
The "Qualified Purchaser Program" was supposed to bring in
$200 million in new revenue during its first two years; so far, it has yielded
only a fraction of that total, barely covering related expenses, including new
staff and other program costs.
‘Tax the Rich’ Code for Taxing Job Creators
Years of overtaxation and overregulation have given
California the second highest unemployment rate in the nation. Even so some of
our state lawmakers still believe that punishing success is a recipe for job
growth.
Efforts by Assemblywoman Nancy Skinner (D-Berkeley) and
other Democrat legislators to increase taxes on high income earners will
actually punish California job creators and worsen volatile state revenues.
According to the Tax Foundation, California already has the
third highest income tax rate and one of the most progressive tax structures in
the nation. The top one percent of California’s income earners have incomes of
$500,000 or more per year and pay up to 50% of all income tax revenues received
by the state each year, according to a report by the non-partisan Legislative
Analyst’s Office.