Rev & Tax Committee Back the Wrong Solutions
Looking at the Controller’s report on revenues coming into the state you have to wonder what the Democrats on the Assembly Revenue and Taxation Committee were thinking as they embraced new business tax proposals yesterday. Revenue collection is below estimates in most tax categories. One of the few exceptions is the Corporation Tax.
The Democrats’ solution? Let’s kill that golden goose, too.
On a party line vote, the Democrats on the committee supported raising property taxes on business property and eliminating business tax breaks that were passed in last year’s budget negotiations.
The Goal is to Dismantle Proposition 13 – All of It!
Assemblyman Tom Ammiano’s AB 2492, scheduled to be heard today in the Assembly Revenue and Taxation Committee, would change the definition of change of property ownership under the law resulting in increased property taxes on commercial property. But, the ultimate goal for many of those supporting the bill is to change all of Proposition 13, including the homeowner property tax protections.
Ammiano made no secret of his desire to "nuke" all of Proposition 13 in a press conference held last week. The assemblyman admitted he was pursuing his bill to change the law on commercial property first because he needed to attack Proposition 13 "incrementally." The public employee unions, which support Ammiano’s bill, to my knowledge have not disassociated themselves from his remarks. Representatives of some of those unions appeared at the press conference.
Michael Milken Offers CA Small Business Advice at Governor’s Conference
The message that echoed through the meeting hall in Oakland at the second Governor’s Conference on Small Business and Entrepreneurship was that entrepreneurs and small business would lead the state out of its fiscal woes.
Small business is the engine of the economy, creates jobs, and will produce an economy to help overcome California’s difficult fiscal situation, many speakers said.
Governor Schwarzenegger, sitting in on a mid-day panel discussion on California’s economic recovery, asserted that, "Green tech is where the action is." Despite the recession, the governor said California continued to create jobs because of its emphasis on green technology.
Poizner Poll Shows Race Closing
Steve Poizner’s campaign released an internal poll showing Poizner closing to 10 points behind Meg Whitman in the Republican gubernatorial primary setting off dueling press conferences between the campaigns to discuss the meaning of the poll.
Poizner’s people emphasized momentum; Whitman’s people talked electability.
Let us talk about a wild ride until Election Day for those who revel in political horse races.
Redevelopment Decision Necessary Stopgap Measure
On top of the news that state revenue is falling short of what was anticipated by $3 billion, comes the decision from Superior Court Judge (and former state legislator) Lloyd Connelly that the state can shift $2 billion in local redevelopment funds to schools.
Redevelopment agencies will appeal the decision. But, if nothing else, Judge Connelly’s decision will force a hard look at the effectiveness and oversight of the redevelopment process and that is a good thing.
By declaring "blight" in communities, redevelopment agencies can use the power of eminent domain to seize property and develop the blighted areas while attaching the "tax increment" revenue to the redevelopment agency. The "tax increment" is the new property tax revenue that is the amount of taxes above what the property was paying when it was "blighted." The new revenue stays with the redevelopment agency and is not available for schools and other county government services.
World Problems Affect California Politics
Certain images and situations developing around the world recently directly and indirectly play on the politics in the nation-state of California.
Already involved directly in the governor’s race are the troubles of investment firm, Goldman Sachs. Meg Whitman’s stint on the Goldman Sachs board and her involvement in the financial process known as “spinning” has given fodder for the Poizner campaign to deliver sharp attacks. The Goldman Sachs saga has also touched Democratic candidate Jerry Brown for inroads the financial firm had with the City of Oakland when Brown was mayor, and Brown’s sister Kathleen’s working relationship with Goldman Sachs.
Expect to hear the name Goldman Sachs bounced around in campaign ads and mailers over the next five months.
The oil spill threatening the Gulf Coast states will undercut the effort to move forward with drilling at Tranquillon Ridge off of Santa Barbara. While Governor Schwarzenegger initially stated he would continue to pursue the goal of drilling at T-Ridge despite the spill, resistance clearly stiffened against the project because of the massive spill. The governor announced yesterday he was pulling his support for the T-Ridge project.
The Debate: As Charges Fly, The Answer to the Initiative Question Is….
The second Republican gubernatorial debate in San Jose yesterday featured relentless attacks from Steve Poizner, with Meg Whitman sticking to the script that has served her well so far. Whitman counterattacked, but Poizner had the sharper elbows.
Three times Poizner said the election was about character and asked Whitman, "Who are you, really?" in identifying Whitman as a supporter of Barbara Boxer and Van Jones. Whitman called Poizner a true engineer, as in engineering a new position for every office he runs for. Meanwhile, solutions to California’s many problems were few and far between.
Poizner Pitches to the Business Community
This may be the worst of times for California, but Republican gubernatorial candidate Steve Poizner says this is the best of times to run for governor. Speaking yesterday at the luncheon meeting of the National Federation of Independent Business Capitol Day, Poizner said the best time to achieve change is when facing a crisis.
Poizner told the business crowd that California dropped from the sixth largest economy in the world to the eight largest in the last decade. He said the reason is that California’s tax and regulation policies are driving job creators out of the state. One example, Poizner noted, was the need to acquire 25 permits from a dozen local government agencies to open a pet food store in San Diego. He proposed a one-stop permit shop to make it easier to start a business.
Members of the audience nodded in agreement as Poizner ticked off troubles facing business in California. He said that 3000 people leave the state every week and that California has lost one-million residents over five years.
Government May Not Be Trusted But Small Business Is
Gaining headlines with the release of the Pew Research Center’s survey last week was the fact that Americans don’t trust government. But buried in the survey numbers on the negative feeling Americans had about most institutions was a major exception – small business.
While the federal government garnered support from only 25% in the survey, large corporations achieved the same level of support, the media corralled 31% support, labor unions 32% and entertainment industry 33%, small business was sitting atop the survey at 71% support from the American public.
Support for small business crossed party lines. Over 70% of Democrats, Republicans and Independents look favorably on small business.
Is the Election about Meg or about $40 BILLION in New Taxes?
The labor unions continued the all out assault on Meg Whitman’s candidacy for governor with yesterday’s announcement that they are launching another campaign to attack Whitman’s record. This is on top of the already announced independent expenditure efforts backed by the public employee unions to attack Whitman and the childish histrionics of the Queen Meg campaign.
But the unions have an agenda of their own for California. That agenda’s bottom line is at least $40 billion in new taxes. The unions have been pushing a catalog of tax increases for some time now. The recent revelation of their "tax everything" plan was promoted at the end of a long march to the state capitol that ended last week.
Among the list of union tax demands are the following tax increase proposals listed in a Capitol Alert report: