How Good a Spending Limit?
Throughout the budget negotiations, Republicans were set on achieving a spending limit to prevent the crazy rollercoaster budget ride from paralyzing the state again. Despite fierce opposition from some Democratic legislators, public employee unions, and interest groups that support greater spending, a limit is part of the final package.
Specific details on the limit are not widely known, but someone with knowledge of the negotiations confirmed details of the limit so we can get a sense on how well it might work.
The limit is based on a 10-year revenue trend line. The budget limit for any fiscal year will be set using a mathematical formula that uses data points from the previous 10 years of actual revenues. Any revenues above the limit will be transferred into a rainy day fund. That fund will also receive an annual transfer of three percent of the general fund. Half of that general fund transfer will be used to repay education funding until a $9.2 billion debt is paid off.
One step closer to Football in LA and other Odds and Ends
It’s beginning to look like an NFL return to Los Angeles within the next two years is but a formality as the City of Industry Planning Commission has approved developer Ed Roski’s plan for a privately financed stadium and retail complex. The plan is now set to go before the Industry City Council in two weeks, where it will likely be approved. I wrote in greater detail about the project and its likelyhood of success this past June — CA will benefit overall as Roski and NFL move toward LA Stadium deal.
In related news – Citizens Against the Stadium, a group formed in opposition to the project in the neighboring City of Walnut, has initiated recalls of the city’s newly sworn in Mayor and a City Councilwoman for not publicly opposing the stadium project. Am I the only one who thinks it’s a bit crazy to see people opposed to a private investment likely in excess of a billion dollars into their local economy, particularly during a recession?
Some other odds and ends from the past week:
Read the Writing on the Wall
I just arrived at the office, and I’m dying to drink a Tropicana juice.
That’s because I drove past one of those big supergraphics on a building that everyone seems so upset about. It’s a big advertisement for Tropicana, and I succumbed. It’s in my head and I can’t get it out. I must drink one.
I’m sure I’m not alone. People all over Los Angeles are probably rushing out this very minute to drink one. At least, that’s one of the arguments against supergraphics; since they’re immense and convey such an overwhelming message, we weak humans just can’t resist. That’s probably true. I mean, have you ever been able to ignore a single commercial message? Just one? I didn’t think so. Those supergraphics must come down.
Now, I guess you could argue that Los Angeles has gang problems and school problems, and the recession is hurting everyone, so maybe we shouldn’t worry about supergraphics. But I for one am real happy that some of our elected officials are spending a good deal of time and energy on this menace.
Business Organizations Take Hit at Tax Commission Hearing
Members of the tax commission admonished representatives from four business organizations for not being helpful in their testimony before the commission at UCLA yesterday.
At the second public meeting of the Commission on the 21st Century Economy created by the Governor and the legislature to look at restructuring the tax system, representatives from the California Chamber of Commerce, California Taxpayers Association, National Federation of Independent Businesses and Council on State Taxation, a national organization that represents multistate corporations, told the commission that seeking certain tax changes was ill-advised. The business representatives were particularly concerned with applying taxes to services and taxing business property differently from residential property.
When their testimony concluded, Commission Chairman Gerald Parsky advised the business representatives to make strong recommendations on what to do to improve the tax system instead of simply stating what was not good to do.
Legislature Must Act on Budget Proposal
Now is the time to pass the budget! If this budget deal fails the costs of the delay will be tremendous.
Each day that passes puts more small businesses in California in harms way and we can not afford to have any more close their doors! All of us know that the job creators have and always will be from small business. No doubt the loss of many small business owners is the critical reason for the high unemployment rate and the poor economic climate in California.
Every day we receive calls from small business owners worried about their employees and keeping their businesses running. One Woman Business Owner in San Diego has fifteen employees and since the State has shut down construction jobs she is at her wits end trying to figure out how to make sure her business survives and keeps her employees. In addition she feels a strong responsiblity to make sure the employee families have food on the table!
The small business community is calling on all parties to put your differences aside and give us a budget! Forget the blame or if you need someone to blame – you can blame small business. We need this resolved so we can get about the business of creating jobs and growing the economy.