At the Milken Institute’s State of the State conference today, California Treaurer Bill Lockyer said he would join with Senator Dianne Feinstein in opposing the governor’s proposal to use the lottery to help fix the budget hole. This propsal was part of the budget deal. If defeated in next year’s special election, another five billion dollar hole will appear in the budget.
Threatening businesses that have made donations in the Proposition 8 campaign on gay marriage has become a weapon used by both sides in the debate. Opposing Proposition 8, Californians Against Hate, created specifically to draw attention to donors who contributed to the measure, organized boycott efforts against some business contributors as reported in the Wall Street Journal and elsewhere. ProtectMarriage.com, a leading group supporting Prop 8, announced it will publicize any business that donates against the measure unless that company also makes an equal donation to the Yes side. Rest assured, that publicity is intended to be negative.
Asking consumers to be political activists with their dollars is not a new phenomenon. Some have argued it is a good way for people to become active in politics. University of South Carolina history professor Lawrence Glickman argued in a 2005 Boston Globe piece that, “The fact that so many Americans are not only ardent consumers but avid consumer activists suggests that they see consumption not only as a private pleasure but as a public good.”
Conventional wisdom has pegged California as a fiscally conservative, socially liberal state. Whether that’s true or not will be measured by the results of a number of statewide ballot measures on November 4.
If Californians are truly fiscally conservative then the bond measures on the November ballot don’t stand a chance. How in heaven’s name can fiscally conservative voters support $16-billion in bonds when the California economy and the national economy are in meltdown mode?
These general obligation bonds have first call on the state treasury. In other words, the bond obligations must be met before a dime is spent on other state functions. So while it is technically true, as every bond ad screams out: THIS PROPOSITION ____ (fill in the blank with Props 1A, 3, or 10) WILL NOT INCREASE TAXES, bonds put pressure on the general fund because they reduce available tax revenue needed for day to day state responsibilities.
California Forward, the non-profit group seeking to create a more responsive, representative and cost effective government held a session on the California budget in Sacramento Friday entitled, “Just How Bad Is It?”
One of the panelists was outgoing Legislative Analyst Elizabeth Hill who has been in the thick of the budget battles for over twenty years. Here is some of the thoughts and wisdom dispensed by Hill as she leaves her post:
If you listen at about the two-minute mark of the video embedded in the N.Y. Post article
of Senator Barack Obama discussing taxes with Joe Wurzelbacher, probably now known forever as Joe the Plumber, you’ll hear Joe suggest a flat tax to the candidate.
Senator Obama replies that he is open to the flat tax idea but thought it would take too high of a tax rate to get the needed revenue.
A decade and a half ago, another Democratic presidential candidate rode the flat tax idea a long way in the nominating process, much further than most pundits thought he would go. That candidate was Jerry Brown, California’s current attorney general.
And, perhaps the once and future governor?
Is the flat tax still an idea Brown would promote in a gubernatorial campaign?
Wall Street’s loss appears to be California’s gain. At least temporarily.
With stocks taking another nose-dive yesterday, investors gobbled up California bonds at a faster rate than anticipated. With their set interest rate, even California bonds backed by our shaky economy seemed preferable to the stock market rollercoaster.
These instruments are known as revenue anticipation notes. Given all that is going on with the state economy, can the state be sure it will receive the anticipated revenue? Yesterday, the Department of Finance revealed the state’s unemployment rate increased to 7.7% for August and the General Fund fell $923 million below expected revenue forecast in the 2008-2009 budget act. Investors are betting on the odds that governments rarely go belly up and are relying on the fact that government has the power to tax.
I was right in the middle of the Sesnon Fire below the hills in the northern San Fernando Valley. Returning from a trip to the East, smoke billowing from the hills just north of my house. Evacuations called for just blocks away. The cars packed, pictures off the walls, reinforcements brought in … my sons and friend. Many of my walking and hiking areas burned to black. Then we waited to see the how the fires turned, flowed or jumped in the dried hills.
In the dark of the night the bright blaze on the hillside had a hypnotic effect, both strangely stunning and scary at the same time.
The fire burned down to Sesnon Blvd. I call one of my race walking courses the Sesnon Loop. I’m up there all the time. Had the fire jumped that road houses would have surely gone up in flames. The firefighters made a stand here, pushing back the flames. They were on top of the fire immediately, letting some of the dried brush burn down so they would not have to come back and fight the fire in that spot again, then applying water to the fire and putting it out.
For the past few weeks, one evening a week, I have been attending the FBI Citizens’ Academy in Los Angeles learning about the inner workings of the FBI. Among the programs the FBI has set up is InfraGard in which the Bureau works with the business community and others to share information in hopes of thwarting attacks against physical and cyber infrastructure in the country.
InfraGard is a government/private/public sector alliance. The program is designed to allow businesses, academic institutions, local law enforcement and the Bureau to combine knowledge and share information and intelligence to prevent hostile acts against the United States. In other words, the FBI is asking members of the community to use their expertise and be the eyes and ears in protecting America.
There are four InfraGard chapters in California: San Francisco, Sacramento, Los Angeles and San Diego. Each center covers wide areas of the state. You can find info on the local chapters here.
The California Taxpayers’ Association has released a second edition of Dave Doerr’s California’s Tax Machine, an up-to-date history of how California taxes its citizens. Doerr, chief tax consultant at Cal-Tax since 1987, started working for the Assembly in 1959 holding many positions, including chief consultant to the Assembly Revenue and Taxation Committee. The new edition, a year in the making, includes new information on the Davis and Schwarzenegger administrations’ tax policies along with updates on some of the historical material included in the 2000 first edition.
Doerr hopes any new tax commission set up by the Legislature or the governor reads through the book before beginning work. “You can’t really begin to fix things unless you know how they went wrong and what the problems are and how they developed. Then they start to see how they can get out.”
Doerr’s 800-page volume begins with the Spanish Rule in California but quickly gets into the tax policies of today and how they developed over the years. If one tax issue has stood out over time for Doerr, it has been trouble with the property tax starting in early statehood and running right through the Proposition 13 tax revolt. Doerr noted that a referendum in 1859 to split California in two was driven in large part by the heavy property tax burden in the southern part of the state. The issue of two Californias was transferred to Congress but was lost among rising tensions of the coming Civil War.