Schwarzenegger/Feinstein Water Bond is Worthy of Consideration

Joel Fox
Editor and Co-Publisher of Fox and Hounds Daily

Water is the lifeblood of California and action needs to be taken to ensure we will have enough water to satisfy the needs of the people and to keep the economy humming. The water bond plan put forth by Governor Arnold Schwarzenegger and Senator Diane Feinstein yesterday is a good proposal worthy of consideration.

California has experienced drought-like conditions for a number of years. In addition, the nearly 50-year old state water infrastructure did not anticipate a population of 38-million people and more.

Improving the water project is one of the crucial improvements the state must undertake – and soon. Conservation is part of the plan but will not be enough to satisfy water needs.

Make no mistake about it, water is vital for economic activity, and not just for farms and corporations but for small businesses and to maintain many jobs. Without adequate water supplies, construction jobs, housing, fishing and other business projects cannot go forward. That’s the way Governor Pat Brown saw it when he put forth the California water project in 1960.

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Odds and Ends – July 10, 2008

Chandra Sharma
Political Communications, Redistricting and New Media Strategist

A few Odds and Ends from this past week:

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Government agencies find creative ways to raise local taxes

Michele Steel
Orange County Supervisor (2nd District) and Former California State Board of Equalization Member

California is in the midst of its annual budget stalemate. The super-majority vote required is all that stands between higher taxes and the taxpayer. Now we settle in to the war of attrition between tax and spend liberals and the few remaining fiscal watchdogs in the Legislature.

So while we play this waiting game, government engages in substantially more creativity at ways to raise taxes then it spends trying to find ways to live within its means. Local tax proposals range from taxing text messages to taxing air. It just never stops.

The City of Sacramento is concerned too many of us aren’t using our home phones. It wants to tax text messages as a means of raising revenue. As if teenagers aren’t expensive enough. Parents will get stuck with a bill for their electronic communications.

The L.A. County Metro Transportation Authority would impose a “Climate-Transit tax”. Another tax would be added to gasoline and the revenue spent on public transportation to combat roadway congestion and global warming.

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Restrict the power, eliminate the money

Writer and Political Commentator

Once again with the California State Legislature and Governor
Schwarzenegger failing to uphold their promises, their duty and the
law, the nation’s largest, most important and most poorly run state
is operating without a budget. The law requires the Governor’s
signature on an approved budget no later than July 1. For the
sixteenth time in the past twenty years, Sacramento has missed the
deadline. With no agreement in site, maybe we’ll beat the 2002-2003
record of no new budget until September 5.

In the meantime, while ineffective and petty politicians play around
with our money, California’s credit rating drops, vendors go unpaid,
and state government is unable to effectively plan because they don’t
know what their budgets will be. Private businesses and residents
hold their breath to see which programs are cut, which loopholes are
closed, which taxes are raised, how much money is borrowed, and how
many creative ways can we mortgage our kids future against our failures.

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A Budget Proposal Tower of Babel

Joel Fox
Editor and Co-Publisher of Fox and Hounds Daily

California operates in a Tower of Babel when it comes to discussing the state budget. When one side does not understand the words and phrases of the other the budget mess is impossible to solve.

Yesterday, the Democrats conference committee released a budget plan that proposes tax increases of $8.2 billion. In the press release issued with details of the plan the Democrats claimed:

The Conference Committee budget is a balanced approach. It closes tax loopholes and rolls back tax breaks for corporations and the wealthy.

Balanced? There is nothing about spending cuts in that paragraph, only raising taxes.

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Let the Sun Shine In

Loren Kaye
President of the California Foundation for Commerce and Education

Readers of this blog already know that the legislative Budget Conference Committee voted along party lines to recommend a nearly $10 billion tax increase to provide most of the fill for a $15 billion budget deficit.

While a $10 billion tax increase may seem shocking, the sheer amount is the least of it. After all, surely noone believes that anything close to that amount would eventually be adopted by a bipartisan vote of the Legislature. More disturbing, though, is the direction that the tax increases are headed:

First, about one-fifth of the revenue increases are really just accelerations or gimmicks, which would create a $2 billion hole in next year’s budget.

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It’s a Start, but Small Businesses Need to Hear More

John Kabateck
NFIB State Director in California

When Senator John McCain delivered the keynote address at the National Federation of Independent Business 2008 National Small Business Summit last month, he did much more than speak to several hundred interested small business owners. He pushed the concerns of a significant voting bloc to the forefront of the presidential campaigns. In fact, both Senators McCain and Barack Obama have spent much time specifically addressing the number one issue among small businesses—healthcare. And it’s about time.

Recognizing that healthcare costs have become unmanageable for many entrepreneurs, Senator McCain said, if elected, his administration would introduce healthcare reform that would provide hardworking Americans more options and expand portability of coverage.

Senator Obama, who was invited to speak at the summit but did not attend, responded to Senator McCain’s remarks by reiterating that small businesses need more options to access quality, affordable healthcare coverage. We also know both candidates recognize that implementing health information technology and addressing an inequitable tax structure should play a part in any comprehensive reform package.

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It’s Prop 13’s Fault—Property Taxes are UP in L.A.

Joel Fox
Editor and Co-Publisher of Fox and Hounds Daily

Everything in California is Proposition 13’s fault – how many times have we heard it? But here’s one time it’s true. Property taxes went UP in Los Angeles County last year … and its Proposition 13’s fault! That’s what the Los Angeles County Assessor Rick Auerbach says in releasing property assessments for the county. In fact, the property tax increase exceeded expectations. While 5% was predicted, property taxes actually climbed 6.9% this year. Here’s a short piece about it in today’s Los Angeles Times.

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4th of July in 2008

Rex Hime
President and CEO of the California Business Properties Association

Ramblings of a 4th of July. It was a beautiful day – sun shining, gentle breeze, clear blue skies, surrounded by family and friends, some I had known for 50 years and some for a few weeks. Lots of food and drink, kids running, swimming, yelling, chasing, and there I was trying to take it all in. Smiling, hugging, shaking hands, laughing, chatting it up –- about the kids, about the weather, about politics… Always back to politics.

Although many of us really do care about what is going on in the world our country and in our state, the sad fact is that not enough pay close attention –- and for politicians that is probably a good thing, because who knows where they would fall on the issues. Does their vote even matter anymore, anyway?

Well, not in California where politicians have so stacked the deck that elections really don’t matter, and if you are the incumbent and you aren’t at the end of your term limited term you will have a free ride over and over again. Now some might say that should be good because all the pressures of elections and campaigns are gone – ha! A Democrat or a Republican running in a safe seat still raise campaign dollars like there is no tomorrow – and they don’t spend any more time dealing with the issues of governance – just the political issue of the day since they all want to be on the cover of Newsweek. So one has to ask what is going on in our Capitol?

Why no solution to the water crisis facing the state, why no budget resolution, yet 5,000 new laws are proposed every year. Why is there no civil discourse on the critical issues facing education, transportation and the environment? Why are there only lines in the sand and barriers – and worst of all, those who seek to find resolution are considered outcasts and minimized.

Jefferson, Franklin, Adams, Hancock are all spinning in their graves. Changing reapportionment, a part time legislature, a two year budget… These might be some good first steps, but remember that first step is always the hardest and most of us would rather just laugh, eat a burger and down a coke than really try to change the system!

A sad commentary on a day that saw people of action taking steps that changed the world.

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Sales Tax on Digital Downloads Still a Terrible Idea

California State Board of Equalization Member

Charles Calderon (D-City of Industry) got a lot of attention after introducing a bill that proposed digital content be subject to the sales and use tax. The label, “I-Tunes tax,” stuck, and the bill (AB 1956) was defeated in the Assembly Revenue and Taxation Committee, whose Chairman is the same Charles Calderon. What has not gotten as much attention is that Calderon has used the special session to re-introduce the same bill as a special session bill, so we need to rehash what is so brazen and wrong about the proposal, ABX3 22.

Under the State Constitution a bill to create a new tax or increase an existing tax is the prerogative of the Legislature. Calderon’s bill would bypass this restriction by mandating the Board of Equalization draft a regulation declaring that digital content is tangible personal property subject to tax. I believe Calderon’s argument is that in this bill the Legislature is not enacting a tax increase, but is ordering the BOE to take actions that will result in a tax increase. This transparent gimmick to avoid the Constitutional impediment to higher taxes caused my colleague on the Board, Betty Yee (D-San Francisco), to say at a public meeting that she is offended by Calderon’s proposal. It is a cynical hijacking of our process which exists for the benefit of the public, not legislators who cannot win in the Legislature.

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