Archive for the “California Budget” Category
Controller John Chiang discusses his decision to halt paychecks for all 120 state lawmakers after they failed to come up with a balanced budget by the June 15th deadline, during an interview with the Associated Press in Sacramento, Calif., Tuesday, June 21, 2011. Chiang said that he found the plan passed by Democrats on a simple majority vote last week was not balanced and therefore lawmakers did not meet the requirement for getting paid under Proposition 25, passed by the voters in November
Well, it will really hit the fan now about the California budget
. It will be donkey against donkey.
California lawmakers must forfeit their pay as of mid-June because the budget they passed last week — which Gov. Jerry Brown vetoed less than 24 hours later -– was not balanced, the state controller said Tuesday.
Since last week, Controller John Chiang, a Democrat, has been pondering whether to pay lawmakers. They passed budget legislation on June 15, meeting their constitutional deadline for only the second time in a quarter-century, but their plan relied heavily on accounting schemes to paper over the state’s deficit. In his veto message, Brown said he could not sign such a plan.
Chiang, who issues the state’s paychecks, said Tuesday that it wasn’t sufficient to keep their pay coming.
Voters approved a law last fall that empowered legislators to pass a budget with a simple majority vote but also threatened to strip them of pay for every day the blueprint is late. The measure makes no mention of approving a balanced budget, but other laws on the books dictate that state budgets be balanced.
Chiang’s decision is widely expected to spur a lawsuit, and lawmakers had begun questioning his authority over their pay even before he made his decision.
Yeah, here come the lawsuits and the California supreme Court will ultimately decide the issue. But, if I were the Democrats who hold an overwhelming majority in the Assembly and the State Senate, I would get busy and pass another budget – one that is balanced.
But, then again, the majority Dems would have to vote for unpopular cuts in spending and they don’t really want to do that.
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It is hard to say since California Proposition 25 language in the bill (tax increases requiring a 2/3’rds super majority) makes for some legal incongruity and the fact that Governor Jerry Brown vetoed the enabling California Budget bill .
Here is the bill.
ABX1 28 (Blumenfield)
State Board of Equalization: administration: retailer engaged in business in this state.
The Sales and Use Tax Law imposes a tax on retailers measured by the gross receipts from the sale of tangible personal property sold at retail in this state, or on the storage, use, or other consumption in this state of tangible personal property purchased from a retailer for storage, use, or other consumption in this state, measured by sales price. That law defines a ?retailer engaged in business in this state? to include retailers that engage in specified activities in this state and requires every retailer engaged in business in this state and making sales of tangible personal property for storage, use, or other consumption in this state to register with the State Board of Equalization and to collect the tax from the purchaser and remit it to the board.
This bill would further define a retailer engaged in business in this state as a retailer that has substantial nexus with this state and a retailer upon whom federal law permits the state to impose a use tax collection duty. The bill would also include specified retailers as retailers engaged in business in this state and would eliminate an exclusion.
This bill would include in the definition of a retailer engaged in business in this state any retailer entering into agreements under which a person or persons in this state, for a commission or other consideration, directly or indirectly refer potential purchasers, whether by an Internet-based link or an Internet Web site, or otherwise, to the retailer, provided the total cumulative sales price from all sales by the retailer to purchasers in this state that are referred pursuant to these agreements is in excess of $10,000 within the preceding 12 months, and provided further that the retailer has cumulative sales of tangible personal property to purchasers in this state of over $500,000, within the preceding 12 months, except as specified. This bill would also provide that a retailer entering into specified agreements to purchase advertising is not a retailer engaged in business in this state and would define a retailer to include an entity affiliated with a retailer under federal income tax law, as specified. This bill would further provide that these provisions would not apply if the retailer can demonstrate that the referrals wold not satisfy specified United States constitutional requirements, as provided.
This bill would also include as a retailer engaged in business in this state as a retailer that is a member of a commonly controlled group, as defined under the Corporation Tax Law, and a member of a combined reporting group, as defined, that includes another member of the retailer?s commonly controlled group that, pursuant to an agreement with or in cooperation with the retailer, performs services in this state in connection with tangible personal property to be sold by the retailer.
This bill would provide that the provisions of this bill are severable.
This bill would appropriate $1,000 from the General Fund to the State Board of Equalization for administrative operations.
The California Constitution authorizes the Governor to declare a fiscal emergency and to call the Legislature into special session for that purpose. Governor Schwarzenegger issued a proclamation declaring a fiscal emergency, and calling a special session for this purpose, on December 6, 2010. Governor Brown issued a proclamation on January 20, 2011, declaring and reaffirming that a fiscal emergency exists and stating that his proclamation supersedes the earlier proclamation for purposes of that constitutional provision.
This bill would state that it addresses the fiscal emergency declared and reaffirmed by the Governor by proclamation issued on January 20, 2011, pursuant to the California Constitution.
This bill would declare that it is to take immediate effect as a bill providing for appropriations related to the Budget Bill.
The lawyers will have to get together on this one but at first blush and with the solence coming from Amazon and Overstock.com, my bet is that the legislation is dead.
Thank goodness! I can keep my meager Amazon Associate status – at least for today.
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Posted by Flap in California, California Budget, California Economy, California Unemployment, Flap's California Morning Collection, Jerry Brown, tags: California, California Budget, California Economy, California Unemployment, Flap's California Morning Collection, Jerry Brown
A morning collection of links and comments about my home, California.
The big news in California today is the Jerry Brown veto of the California State budget yesterday. A budget passed over the objections and votes of the California GOP. In other words, Brown vetoed (the first such veto in California history) his own Democratic Party’s majority passed budget.
So, what is everyone concerned about in the Capitol today?
Why, it is whether California Legislators will get paid.
In the meantime, the California economy continues in a downward spiral and unemployment actually increased this past month.
No word on the ridiculous Amazon Tax, but I assume that it was vetoed with the California Budget veto yesterday. But, I could be wrong. How convenient for the Governor though.
On to the links…..
California loses 29,200 jobs in May, a blow to recovery
California’s economic recovery stumbled in May as employers shed 29,200 jobs from payrolls, a surprisingly large loss in a state that had been on the mend. The state’s unemployment rate still dropped to 11.7%, from 11.8% the month before, according to numbers released this morning by the federal Bureau of Labor Statistics.
The numbers follow a slate of bad economic news throughout the country. The nation added just 54,000 jobs in May, and its unemployment rate grew to 9.1%. The previous three months, it had added an average of 220,000 jobs a month. Home prices have dropped in California and the nation to surprising lows as sales slow.
California has the second-highest unemployment rate in the nation, after Nevada, although Nevada’s unemployment rate dropped significantly in May, to 12.1% from 14.9% the year before.
California had added an adjusted 14,900 jobs in April, after cutting a net 11,600 in March. It experienced five straight months of job growth from October through February.
“We do know that the picture is not terribly rosy,” said Johannes Moenius, an economist at University of Redlands.
Brown’s big budget bet
Gov. Jerry Brown’s veto of the new state budget Democrats passed this week represents a gamble that California’ deadlocked Legislature can find its way to a bipartisan solution that has evaded it all year.
Brown, in his veto message, blamed Republicans for refusing to go along with his proposal for a special election at which voters would be asked to ratify the extension of about $10 billion in taxes due to expire at the end of this month.
Brown also slammed his fellow Democrats, indirectly, by describing the budget they passed as filled with “legally questionable maneuvers, costly borrowing and unrealistic savings.” He noted that it would leave the state’s books unbalanced for years to come and add billions of dollars of new debt to the California’s already overburdened balance sheet.
But Brown’s rejection of the budget does not guarantee he is going to get anything better from the Legislature in the days and weeks ahead.
Republicans remain opposed to new taxes, and even to extending the temporary taxes that are about to expire. Democrats remain opposed to making the kind of spending cuts that would be required to balance the budget without those taxes. There appears to be very little middle ground.
Los Angeles Dodgers and Los Angeles Marathon: Judge extends McCourt talks, deal might be close
Superior Court Judge Scott Gordon on Thursday rescinded his finding that Frank and Jamie McCourt were at an impasse in their settlement talks, and he set a hearing for later today to determine if a deal had been reached. “I think we are close,” said Jamie’s lawyer Dennis Wasser, according to AP. “Hopefully, we can get it done tonight.
Dan Walters: If California legislators get paid, vetoed budget is giant charade
That presumes, of course, that the Democratic budget somehow put pressure on Republicans. In fact, it may have had the opposite effect of increasing their leverage on Brown to make concessions to get his centerpiece, an extension of expiring sales, income and car taxes, on the ballot.
A complicating factor is that Steinberg, Pérez and public employee unions really don’t want the fall election that Brown seeks on taxes, fearing – with good reason – that voters would reject them.
Still another is the new state law that strips legislators of salaries and expense checks, about $400 per day each, if a budget is not passed by June 15.
Controller John Chiang has appointed himself the law’s enforcer. Legislative leaders contend that Wednesday’s budget action complies, but Brown’s declaration that the budget was unbalanced gives Chiang grounds to stop the paychecks if he wishes.
Chiang was waffling Thursday, saying he wants “to complete our analysis” before deciding whether to pay lawmakers at the end of the month.
If Chiang pays legislators, the rejected budget will look like a giant charade by Democrats to evade the law.
Non-Californians at UC campuses get summer subsidy
A taxpayer subsidy that out-of-state students enrolled in the University of California system have been receiving for years is under scrutiny as the schools search for extra revenue.
During the regular school year, nonresidents pay up to three times as much as students from California, bringing the universities a few hundred million dollars. But partly due to measures taken to boost summer enrollment, they are spared from paying higher fees for summer classes.
“It seems out of sync,” said Steve Boilard, director of higher education policy for the Legislative Analyst’s Office.
Enjoy your morning!
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I am returning Senate Bill 69 and Assembly Bill 98 without my signature
Brown announced the veto in a press release Thursday. “Unfortunately, the budget I have received is not a balanced solution,” his statement said. “It continues big deficits for years to come and adds billions of dollars of new debt. It also contains legally questionable maneuvers, costly borrowing and unrealistic savings. Finally, it is not financeable and therefore will not allow us to meet our obligations as they occur.”
Read the governor’s official veto message here.
The plan contains higher taxes, billions of dollars in delayed payments to schools, and various accounting maneuvers to balance the books. Brown had previously warned that he would not sign a budget containing such accounting gimmicks.
Democratic leaders in the Assembly and Senate said the plan they passed Wednesday was crafted without input from the administration.
It is unclear whether state lawmakers will receive their paychecks in the wake of the veto. Under a law passed by voters last year, legislators lose pay if they fail to send the governor a budget by June 15. Lawmakers said Wednesday they believe the budget they passed meets that test, but Controller John Chiang, California’s chief financial officer, will decide whether to issue their paychecks.
Brown’s veto is the latest twist in a budget process that has been just as divisive and partisan as it was under his predecessor, Arnold Schwarzenegger.
The ball is back in the California’s Legislature’s court, which I am positive they do not appreciate, especially if the California Controller decides to withhold their paychecks.
The Democrats who control the Legislature will either have to make more cuts or make some sort of deal with the Republicans to raise revenue – but in return for something. The likelihood of a deal with the GOP is extremely unlikely.
Plus, the unions who own the Democrats don’t want a tax election before 2012, because they wish to use their campaign cash to win a 2/3’rds super majority in the Legislature at the November 2012 general election.
So, it is the Schwarzenegger years all over again = budget gridlock and accounting tricks. But, Brown vetoed THAT budget today – so, what is next?
All eyes and ears in the California Legislature today will be on California Controller John Chiang to see if they get paid.
Bet they move fast, if their paychecks are withheld.
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