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.

Boalt Law School Dean Chris Edley was more blunt. Saying Parsky was not “edgy” enough, Edley told the panel, “We need more input from you on how the business community thinks we can solve the problem. We didn’t see that from you today.”

In attempting to narrow options to remodel the tax structure, commissioners spent a considerable time in discussing both service taxes and taxing business property differently than residential property. Given that discussion, it was not out of line for the business organizations to raise objections to what they saw as bad tax policy.

However, Parsky said he needed the business community to think about offering a comprehensive approach on tax recommendations as a whole that would not be harmful to the business community.

Anaheim Mayor Curt Pringle asked the panelists if their organizations would object to a revenue neutral position of dropping the sales tax rate but adding taxation to some services. He appeared dissatisfied with the responses he received from the panel. Panelists argued that a service tax might be volatile or that a tax on services was not reflective of the economy and might cause consumers to seek services out of state.

Santa Cruz County Treasurer Fred Keeley argued that transferring services out of state would be limited, noting that no one in Santa Cruz County would be taking their horse to Nevada to be groomed.

Attempts to get a response from the business panelists after the hearing were unsuccessful.

At its next meeting at UC Berkeley in March, the Commission will attempt to focus on major issues of interest as they move toward their mandated April 15 deadline to present recommendations to the governor and legislature on remodeling the tax system.