The poor, unfortunate, disadvantaged tax agency

Gino DiCaro
Vice President of Communications for the California Manufacturers & Technology Association

Today, all Californians can rest easy knowing that the State of California’s tax enforcement and administration functions are split between two agencies.  The Franchise Tax Board (FTB), who administers the Personal Income and Corporation Tax laws, and the Board of Equalization (BOE), whose responsibilities include the administration of the state’s sales and use taxes, excise tax, special taxes and fees, as well as property valuation.

In addition to the BOE’s regular duties, the Board also serves as adjudicator of personal and corporate income and tax appeals after specific issues have exhausted the FTB’s administrative dispute process. Under current law, if the BOE denies the taxpayer’s appeal, the taxpayer may bring action in state court.  However, if the FTB’s original decision is overturned, the taxpayer has prevailed and the issue is considered resolved.

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Create California jobs through efficient, effective regulations and renewed commitment to economic development

Gino DiCaro
Vice President of Communications for the California Manufacturers & Technology Association

Today, in an open letter to the Legislature, more than 300 companies will support a campaign to expand the Legislature’s oversight of California’s government agencies and make the state more attractive to new investment and jobs. The employer community will announce a bipartisan agenda to ensure lawmakers have the independent economic analysis they need to make job creation a priority. Senators Rod Wright and Bob Dutton will join with representatives of the coalition in the Capitol at 1:30 p.m. to discuss the regulatory and economic development proposals.

We must understand the impact new rules and regulations will have on job creation. Recent trends, resulting in unaccecptable job and wage loss for California workers are alarming and unsustainable. Site Selection magazine has released new research showing, over the last three years, California averaged only 3.7 new or expanded industrial facilities per 1 million people, while the national average was 28.7. These results coupled with the fourth worst unemployment rate in the nation and an eroding manufacturing base requires a new perspective on California’s regulatory and economic development priorities.

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California does not need more tax penalties

Gino DiCaro
Vice President of Communications for the California Manufacturers & Technology Association

The LA Times’ Evan Halper wrote a piece on Monday, ‘Group fights plan to fine tax cheats‘, regarding a tax refund penalty provision buried in Senator Lois Wolk’s otherwise worthy tax relief bill SBX8 32.  The focus of concern in this bill is a controversial penalty on misclaimed refunds.  Whether or not one agrees with the policy of a refund penalty, it is important that controversial policies stay out of a federal tax conformity bill.  The conformity bill, over 100 pages, must have consensus or its demise is certain.

Typically, controversial provisions are passed outside the conformity bill process, which is why items like the Health Savings Account and the Research and Development Credit conformities have not been included in past omnibus conformity bills.

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‘Cool Cars’ embodies Sacramento’s ‘bumbling, well-intentioned, paternalistic nonsense’

Gino DiCaro
Vice President of Communications for the California Manufacturers & Technology Association

The California Air Resources Board (CARB) is looking to finalize its “Cool Cars” policy this Thursday (** this was corrected from original blog that said “Wednesday”**), once again putting regulation before reason and imposing knee jerk command-and-control mandates with no regard for economic impacts and, in this case, public safety.

Here’s the nickel tour:

CARB’s  “Cool Cars” policy was set up in 2009 as an AB 32 early action item to reduce the state’s greenhouse gas emissions by reflecting heat away from cars, thereby requiring less air conditioning and less fuel.

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Leadership on jobs growth emerging

Gino DiCaro
Vice President of Communications for the California Manufacturers & Technology Association

California has often claimed leadership on many big issues and movements.  It’s time for policymakers to claim leadership where it matters most — growing our job base.  A 12.4% unemployment rate, a $20 billion state deficit, a manufacturing sector that lost more than 607,000 jobs since the decline started, and a negative 5.97 public-to-private sector job ratio since 2001 leaves California in a stranglehold of deterioration.

Both parties introduced jobs packages in the last 24 hours that indicate the Legislature is now focused on leading us out of this mess with a policy environment that at least thinks of job impacts first.   Up until now, the employer, employee and unemployed communities in California were left wondering why California leads on everything but jobs and our economy.

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Why not California — MiaSole and Facebook

Gino DiCaro
Vice President of Communications for the California Manufacturers & Technology Association

California took more employment and innovation bruises this month with two announcements from companies producing the state’s favorite products – web technology and solar power.

Palo Alto based Facebook will build new facility in Oregon

Employing 200 people during construction and 35 full time employees upon completion

"The social media powerhouse confirmed Thursday that it has picked the economically depressed Central Oregon town for Facebook’s first company-owned data center, drawn to the region by reliable and affordable power, a favorable climate and tax breaks."

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Silicon Valley based MiaSole solar company will build manufacturing facility in Georgia
Employing potentially 1,000 workers

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Optimism (and employment) wanes for California’s future

Gino DiCaro
Vice President of Communications for the California Manufacturers & Technology Association

California plunged again last month in high wage manufacturing employment by 2,300 jobs.  The national media continues to single out California, using it as a narrative blueprint for how to overwhelm a once-thriving state economy, and almost dares anyone to bet on California’s recovery.

For these and many other reasons this legislative session could be the most important year of decisions in the state’s 160-year history.  Policymakers are no doubt giving lip service to ground zero — growing jobs and the economy —  but there is little precedent in California for climbing out of such a monumental hole.

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Can California afford global warming scheme?

Gino DiCaro
Vice President of Communications for the California Manufacturers & Technology Association

The California Air Resources Board policy team released its draft greenhouse gas cap-and-trade proposal last week.  According to the agency’s draft, a cost of $60 per ton of Co2 between 2012 and 2020 would total $143 billion over the first 9 years of the program.  The estimates for costs per ton of reduction range widely depending on the design of the program.  Some estimates reach as high as $200 per ton!  It is unlikely that industry and high-wage employers will be able to compete in global markets with these overwhelming California-only costs.  A program this costly should come with a valid economic analysis to show that California can grow its economy and add jobs while subject to these costs. So far we have not seen that proof.

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California awakening

Gino DiCaro
Vice President of Communications for the California Manufacturers & Technology Association

State policymakers are beginning to understand — or at least face the realities of — a fundamental reason for California’s job loss and now a 3-year $81 billion budget deficit.  Basically we pass laws and move on to new ones and call it success.  Texas on the other hand — a state that congregates its legislature in only odd years and requires a 2/3rds majority on every bill — created 70% of the new jobs in the United States in 2008 and has a $2 billion budget surplus this year. 

I offer the following 3-week timeline of completely independent events and tidbits — a syllogism if you will — as a picture of evolving realizations of California’s problem, as well as some minimal-cost concepts that are gaining traction. 

October 22

    » Treasurer Bill Lockyer testifies that two thirds of California bills shouldn’t see the light of day and begs the Legislature to recognize the severe degree of dysfunction as it pertains to California’s dire situation.

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Why Not California #10 – Colorado gets solar manufacturer

Gino DiCaro
Vice President of Communications for the California Manufacturers & Technology Association

Last week, German-based SMA Solar Technology announced it would open a manufacturing facility in Colorado, spend approximately $22 million on it’s first non-European site, and hire 300 to 700 Denver workers starting in 2010.  It should be noted that Colorado is listed among the top five states to do business according to Forbes magazine and CNBC.

It was rumored that many states were in the running for SMA — a company that makes components that integrate residential solar panels with electrical grids.  For a state with a “Million solar roofs” policy, I’d like to know what California did to court this company.   Why didn’t they receive the same treatment as Tesla motors with a sales tax exemption on capital equipment or something similar to attract their impressive operation?

Colorado has now landed at least 300 high paying manufacturing jobs that will contribute to its growth and emergence from the national recession, while California continues to pass environmental policies on the notion — not economic analysis or proof — that the environmental frontier exclusively creates jobs and helps the economy. 

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