Author: Joel Fox

In response to Governor Jerry Brown’s announcement that he reached
a deal with Assembly Democrats and a couple of Republicans to pass a tax
plan involving the single sales factor for multistate corporations and tax
reductions or incentives for personal income taxpayers and small business,
Republican Senate leader Bob Dutton made a good suggestion. Examine overall tax
reform in a special session.

Dutton did not want the complex deal to be announced at noon
on one day and be passed by both houses of the legislature the next day without
adequate time for study and debate. As Dutton put it, "There
is nothing more complex than tax reform, and trying to jam through a proposal
on the last day of session without transparency or input from the public and
tax experts is irresponsible."

Using the deal as
impetus, the idea of discussing the deal with a broader goal of looking at tax
reform is worth consideration by the governor. Many experts believe the
California tax system was built for another era. Changes could be made that
would encourage business and entrepreneurship, which in turn, would produce
revenue for the treasury.

A panel at the Ronald Reagan Presidential Library prior to the Republican presidential debate focused on the problem for Republican candidates in California — the Latino vote.

Dan Schnur, head of USC’s Unruh Institute and the USC Dornsife/LA Times poll called the Latino vote President Barack Obama’s “life preserver” in the state. Referring to the recent poll he oversaw, Schnur said while Obama leads amongst white voters in California by a point or two, he holds more than a 2-1 lead with Latino voters giving the president a 15-point overall lead over a generic Republican opponent in the Golden State.

While Schnur argued that Republicans positioning on the immigration issue is hurting the party with Latinos, California Field Poll director Mark DiCamillo suggested Republicans face another challenge to capture the Latino vote — a difference in political philosophy. DiCamillo said Latinos look more favorably on government for help in securing education and health care. DiCamillo said Latinos generally share Obama’s vision of a more expansive government.

Michele Bachman said at the Republican debate last night at the Reagan Presidential Library that repealing Obama health care along with jobs would be the chief issues of the 2012 presidential election.

Of course, that might depend on who the nominee is. Don’t count out the issue of Social Security, which gained prominence when Texas Governor Rick Perry called it a “Ponzi scheme” and a “monstrous lie” to younger Americans.

Former Massachusetts Governor Mitt Romney jumped on Perry’s comments, declaring, "Our nominee has to be someone who … isn’t committed to abolishing Social Security but who is committed to saving Social Security."

The Social Security debate will remain prominent. Even the former president responsible for Social Security is getting into the debate. The Franklin Roosevelt Presidential Library in New York currently has a special exhibit titled, “Our Plain Duty,” FDR and America’s Social Security.”

This piece was co-authored by Teresa Casazza, President of the California Taxpayers Association

The effort to raise more than a billion dollars in new taxes
by forcing some corporations to use the  single sales factor apportionment formula –
even though the formula may not accurately determine how much income is taxable
in California  – violates a number of
taxation principles, and only serves to enhance California’s reputation as a
bad place to do business.

State legislators and the governor are trying to create a
billion-dollar tax increase on some corporations by passing SB 116, which will
end corporations’ ability to choose between paying their state taxes through a
single sales factor or through a formula that includes property, payroll, and
sales factors.

Just two years ago, the Legislature agreed to change to the
optional tax plan to encourage business growth in the state. When an effort to
repeal the new law was placed on the ballot by initiative last year, the people
rejected the repeal effort, agreeing with taxpayer groups that said the
initiative would reduce job opportunities for Californians.

Seventy
state parks are scheduled for closure because of budget cuts, which has
promoted a couple of bills now before the governor to find alternative ways to
keep the parks open. In a larger sense, this move to save the parks might be a
roadmap on delivering government services and saving taxpayer money.

AB 42
by Assembly member Jared Huffman would allow non-profit organizations to take
over the operation of parks that are threatened to close. Currently, the
Department of Parks and Recreation are in charge of the parks. AB 42 would
allow the Department to enter into an operating agreement for an entire unit in
the state park system or a portion of the park, with the non-profit having the
ability to develop, maintain and improve the park.

SB
386 by Senator Tom Harman goes a step further. The measure allows for an
individual or other party to enter into negotiations with the Department to
operate and maintain a park that is scheduled to close.

Both
bills open the door for increased use of public-private partnerships to run
functions of the state that previously were the purview of state authorities
and state workers. In fact, the latter issue is one of concern for public
unions who have raised opposition to the bills.

With Democratic legislators moving toward passing a bill to move June ballot measures to November, a counter move is being contemplated to mount a referendum against such a bill if it is signed by the governor.

This morning, Jon Fleischman reported on Flash Report that SB 202 is the likely vehicle to receive the "gut-and-amend" treatment and carry the language to move initiatives to November.

I am told by a attorney specializing in the field of election law, if a referendum on the expected legislative action qualifies for the ballot, that would freeze the implementation of the new law and all the initiatives that were due to appear on the June ballot would appear on the ballot. Those measures include both the Stop Special Interest Money initiative and the Amazon tax referendum, which appear to be the target of the public unions and Democratic lawmakers.

At the end of last week, President Barack Obama ordered the
Environmental Protection Agency to defer new, strict standards on ozone
emissions. The lack of job growth brought about the decision. If the need for
jobs trumps the implementation of new environmental regulations for the
president, does the same apply to California and our governor?

While the Obama Administration claimed the decision to hold
off the regulation change was based on a need for updated scientific input,
many commentators could not help noticing the announcement came on the heels of
statistics that showed no job growth. A Wall
Street Journal editorial stated flatly that the zero jobs growth "lies at
the center of this (the regulation deferral) startling and welcome decision."

Governor Jerry Brown has pounded the job creation drum of
late, announcing a new jobs czar. However, he is also conducting the green
energy symphony. Meanwhile, California is due to start rolling out regulations
for greenhouse gas controls in 2012 under AB 32, the Global Warming Solutions
Act.

Amazon.com has put forth a plan to avert the referendum to
overturn a new tax law that is ready to qualify for the next election. The
proposal probably falls into the "too-little-too-late" category for Amazon’s
political opponents to avoid a ballot battle. History of a similar referendum
from many years ago indicates the ballot fight will be hugely expensive.

First, to the negotiations: Amazon has asked for a two-year
suspension of the tax law requiring online, out-of-state retailers to collect
sales tax while Congress works on a national solution to collect taxes across
state lines. The company also offered to set up distribution centers in
California, which could create up to 7,000 jobs.

The initial response to the proposal from opponents lead by
the California Retailers Association is that the deal is unacceptable.
President of the association, Bill Dombrowski, said, "We don’t think it’s a
serious compromise."

"The lady doth
protest too much, methinks."

Hamlet, Act III, Scene
II

On the heels of the California Taxpayers Association releasing an excellent monograph on Understanding Proposition 26, the measure passed by voters last year to clarify what is a tax and what is a fee, the legislature is attempting to pass a tax on gasoline, which would require a two-thirds vote, as a simple majority vote "charge." SB 791 by Senate President Pro Tem Darrell Steinberg "would authorize a metropolitan planning organization, subject to majority voter approval, to impose, for up to 30 years, a regional transportation congestion reduction charge on purchasers of motor vehicle fuel."

In Section 1 of the bill, from paragraphs f thru l, the author describes how this charge is not in violation of Proposition 26’s requirement for a two-thirds vote.

Seven paragraphs arguing the measure is not a tax! Methinks the Senator protests too much.

The oft-quoted phrase from the pen of Shakespeare is
defined as one can "insist so passionately about something not being true
that people suspect the opposite of what one is saying."