Posts Tagged “Jerry Brown”
A new grass roots small business organization, the Coalition to Protect Small Business Jobs has formed to ask California Governor Jerry Brown to veto AB 28 X, the Amazon Tax Internet Sales Tax legislation. I have posted a copy of the bill here.
From the press release:
Calling AB 28X’s new tax burdens on Internet sales a direct threat to small business and Internet entrepreneurship, the Coalition to Protect Small Business Jobs urged Governor Brown to veto the e-taxation bill approved by the California Legislature Wednesday.
“Without adequate protections for small businesses, this bill and bills like it across the country would make it even harder for us to compete with big retailers on the web, our last frontier for a more level playing field,” said Terri Hartman, Manager at Liz’s Antique Hardware in Los Angeles.
The 1992 U.S. Supreme Court Quill decision prohibits states from forcing businesses to collect sales taxes unless the business has a physical presence in that state. Bills like the one approved Wednesday attempt to get around that ruling by broadening the definition of physical presence to include those without a physical presence in the state.
“Small businesses create two of every three new jobs, account for more than half of all private sector jobs, hire 43 percent of high tech workers and drive innovation in a host of fields,” said Jessie Womble, State & Local Public Policy Manager at CONNECT – a non-profit organization that links inventors and entrepreneurs with the resources they need to succeed. “Protecting their ability to flourish on the Web should be of paramount concern to everyone.”
More than 17,000 small businesses in California have written letters to their state legislators in opposition to this legislation.
“The irony of this bill is that instead of producing more tax revenues, this unfair new tax burden would fall disproportionately on small businesses and result in fewer jobs and fewer state and local tax revenues,” said Bill LaMarr, Executive Director of the California Small Business Alliance.
The State Board of Equalization has reported that already small revenue estimates for the measure are subject to “considerable uncertainty,” don’t fully represent the likely loss of personal income to Californians and businesses and would be subject to years of delay as a result of expected litigation.
“The revenue figures for AB 28X are uncertain at best and this bill represents exactly the kind of budget gimmicks that Governor Brown is trying to correct,” said LaMarr. “We respectfully ask Governor Brown to veto this legislation and request the legislature to adopt real measures that will protect small business entrepreneurs.”
More information is available at www.ProtectSmallBusinessJobs.com.
Opponents of this e-taxation legislation include the California Small Business Alliance, NetChoice, California Business Alliance, Silicon Valley Leadership Group, TechAmerica, eBay, TechNet, Orinda Taxpayers Association, CONNECT and more than 17,000 small businesses throughout California including, Act + Fast Medical, TransTech Systems, 7daysale4u, Hamilton Tools, MRO Warehouse, Jones Vintage Parts, Electronics Nexus, Transition IT, Hall’s Window Center, Seabreeze Books and Charts , Liz’s Antique Hardware, Mannequin Madness, Valley Network Solutions and The Sticker Station.
But, before Governor Brown has a chance to veto this bill, there may be some problems with this legislation which I outlined here.
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 .
So, it looks like now AB 28X may have to go back to the California Legislature for a re-vote.
It’s not clear if the bill will become law. It was part of the budget package approved Wednesday by the Legislature. Gov. Jerry Brown vetoed the main budget bill Thursday, and on Friday legislative staff members were determining whether the sales tax bill can still be legally sent to the governor separate from the budget, or whether lawmakers will need to vote on it again.
Brown told reporters in Los Angeles he believes the Internet tax is a “common sense idea.”
If he does sign the Internet bill, California could be in for a fight. Amazon and Overstock.com have threatened to sever ties with their California “affiliates” – thousands of businesses that earn commissions by referring customers to Amazon.
Amazon, probably the most aggressive opponent of the legislation, has already fired affiliates in several other states over similar laws, including two last week: Connecticut and Arkansas. It had no comment on this week’s developments in California.
However, should the legislature re-vote, pass the legislation and it is signed up Governor Brown (which is likely from his comments above), then Amazon and other retailers may sue anyway in either state court (the Proposition 26 requirement of increasing taxes by a 2/3rd’s super majority rule) or in federal court (the Constitutional Nexus issue.)
With the explosion in e-commerce, lawmakers in California and many other states have tried shifting the tax-collection burden from consumers to retailers – the same way brick-and-mortar transactions are treated.
Those efforts have been largely thwarted by a landmark 1992 U.S. Supreme Court decision involving a mail-order office-supply company. The court said retailers can’t be forced to collect taxes unless it has a “physical presence” in the state.
Nevertheless, several states have passed laws in the past few years forcing online retailers to collect tax. Lawmakers have attempted to get around the 1992 ruling by expanding the definitions of physical presence.
In California, with the legislation passed this week, that means subsidiaries doing business in the state. Amazon, for instance, employs 500 Californians at two subsidiaries in Silicon Valley, including one unit that helped design the Kindle electronic book reader.
California also says the retailer’s in-state affiliates constitute a physical presence. These affiliates are independent businesspeople who post links on their websites to Amazon and other e-tailers. When a customer clicks through and buys something from the e-tailer, they’re paid a commission.
Amazon and Overstock’s threats to dump their California affiliates, in retaliation for the tax legislation, has some of these affiliates rattled.
Ken Rockwell of La Jolla, who runs a photography website, said he earns much of his income from links to Amazon and other online sellers of camera equipment. If the bill becomes law, he and thousands of others would get cut off, he said.
“The only people who would get hurt are the people in the state of California,” Rockwell said.
Rockwell said he might move out of state as a result.
Well, I won’t be moving out of California because of the Amazon Tax, but can Californians really afford another costly expenditure of public funds paying lawyers to fight this for years in the courts?
What will likely happen is the bill will go back to the Legislature and pass. Then, Governor Brown will sign it into law. The law will go into effect on January 1, 2012, when Amazon and others will file their lawsuits. In the meantime, Amazon will close its two small divisions in the Silicon Valley (placing those employees out of work, at least in Califonria) and fire all of its Associates, including me.
And, the California budget will continue to be in a structural deficit with no increased internet sales tax revenue.
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Tags: Amazon Tax, Internet Sales Taxes, Jerry Brown
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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.
Wow!
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!
Tags: California, California Budget, California Economy, California Unemployment, Flap's California Morning Collection, Jerry Brown
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I am returning Senate Bill 69 and Assembly Bill 98 without my signature
Who knows?
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.
Tags: California, California Budget, California Legislature, Jerry Brown
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So, on to California Governor Jerry Brown for either his signature or veto.
For only the second time in 25 years a California spending plan was passed on time. One interesting part of that balancing act is an online sales tax, something lawmakers have been reluctant to approve in the past.
It seems like a no-brainer, the state needs money, so why not tax purchases online? We pay a tax when we buy the same products in the store. But critics say this tax could actually hurt some businesses in California. Those big online retailers, like Overstock and Amazon, have found a way around this law in other states. They just sever ties with businesses they deal with in the states with the tax. So companies that sell product to Overstock could lose Overstock as a client. This has put some small companies out of business.
The California state legislature needed to close a $9.6 billion deficit and this is expected to bring in $200 million a year in revenue. Some so called brick and mortar stores support this; they think it’s unfair that their product is taxed, but the same items online are not. The big question is do the benefits outweigh the possible side effects?
So, what happens next?
California Governor Jerry Brown can either sign the legislation, veto or allow it to become law. Brown has scheduled a 12 noon PDT new conference on the California budget and maybe we will know more then.
No word from Amazon or Overstock.com, but I bet their attorneys are preparing to file the lawsuits as soon as Brown makes his decision.
There will probably be a few court challenges.
One in federal court regarding the constitutionality of the nexus and the Commerce Clause. The other in California State Court regarding the imposition of a new tax without the 2/3′rds vote requirement of California Proposition 26.
Stay tuned…..and in the meantime, read this piece about yesterday’s legislative vote and what may portend for California.
Tags: Amazon Tax, California, California Budget, Internet Sales Taxes, Jerry Brown
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All eyes are on California Capitol today, as the the Legislature faces a 11:59 PM deadline to pass a balanced budget or have their own paychecks affected. Any odds at some sort of “balanced” budget will pass when legislator’s own bank accounts are on the line?
The answer is: YES.
Both the California Assembly and Senate have morning sessions this morning and the poop is that they will pass a majority vote “balanced budget.” Remember California Democrats hold overwhelming majorities in both houses, but lack the 2/3′rds super majority in order to raise taxes.
The California Legislature is facing an almost $ 10 Billion budget shortfall and is required by law to balance the books. Some of the proposals leaked out of the Capitol for the Democrat majority only plan include:
- Increasing the state sales tax by 1/4%
- Increasing car/vehicle registration fees by $12 each
- Imposing the “Amazon Tax” or internet sales tax collection requirements for online retailers who do not have a physical presence in California
- Charging rural homeowners a fee for firefighting services
- Cutting the budget of the California Court system by $150 Million
There are others, but the Democrats are floundering since most of the above will face certain court challenges or have no realistic ability to either cut spending or raise revenues. In other words, it is a SHAM and GIMMIC budget. Whether Democrat Governor Jerry Brown will go along with this Democrat majority only budget is uncertain.
Brown will continue to negotiate with the Republicans and hope for a better deal. The Republicans have no incentive to deal with the Governor unless some real reforms become reality – if even that.
So, on to the links:
Field Poll: Support Slipping for Jerry Brown, Tax Extensions
Gov. Jerry Brown still has public support for his tax plan, but the margin has slipped, and so has his public approval rating, according to a Field Poll released today.
The poll comes as legislative Democrats – frustrated by months of failed budget talks between Brown and Republican lawmakers – prepare today to take up a budget of their own.
Though Brown’s public approval rating has slipped just two percentage points since March, to 46 percent, many Californians who previously were undecided about Brown made up their minds against him. Thirty-one percent of voters disapprove of Brown’s job performance, up from 21 percent in March.
Fifty-two percent of registered voters surveyed said they would be willing to extend temporary tax increases to close the state’s remaining $9.6 billion budget deficit, a drop of nine percentage points from March.
Highlights of the Democratic budget plan
Highlights of the Democratic budget package that lawmakers plan to vote on Wednesday, according to Assembly budget staff:
TAXES AND FEES
$900 million –- Raise local sales tax rate by 0.25 percentage point
$300 million –- Raise annual car registration fee by $12
$200 million –- Require online retailers, such as Amazon.com, to collect sales taxes
$160 million –- Impose fee on residents in fire zones
CUTS
$500 million –- Cut spending on a local law enforcement program (could be offset by a vehicle tax hike, if GOP agrees)
$300 million –- Reduce spending on University of California and California State University systems by $150 million each
$150 million –- Reduce court spending
DEFERRALS
$2.85 billion –- Delay paying schools and community bills until the next fiscal year
$540 million –- Delay paying some UC bills until next fiscal year
OTHER
$1.2 billion -– Revive a new version of proposal to sell state buildings,and then lease space back
$1 billion –- Assume state wins lawsuit to take money from early-childhood programs
$800 million -– Additional unanticipated tax revenue
$750 million -– Cancel repayment of old school debts
$700 million -– Assume federal government will pay some Medi-Cal bills
Conservative heat to end redevelopment
Who would have guessed that California conservative icon Tom McClintock, the former longtime legislator from Ventura County and current congressman representing a district in Northern California, would step up at a critical time to give Democratic Gov. Jerry Brown a boost in promoting one of his controversial budget proposals?
The answer is, anyone who paid attention to McClintock’s position as a legislator on the issue of redevelopment. As a property rights advocate, he was a leading foe of redevelopment. Now he’s stepped up and released a You Tube video in which he calls on supporters to urge their state lawmakers “to abolish these rogue agencies.”
The video comes just as city governments and other redevelopment advocates are sounding the alarm about a potential vote in the Legislature on two developing bills to accomplish most of what Brown is seeking. One bill would abolish redevelopment agencies; the other would allow specific agencies to stay in business, but only if they agreed to turn over most of their current flow of property tax revenues to their local school districts.
Enjoy your morning!
Tags: California, California Budget, Flap's California Morning Collection, Jerry Brown, Tom McClintock
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A morning collection of links and comments about my home, California.
This week the California State Assembly and State Senate face a Wednesday constitutional deadline to pass a budget. California Jerry Brown is looking for Republican votes for tax extensions and so far has not obtained them.
California Governor Edmund G. Brown Jr. provides an update on state budget negotiations as the June 15 deadline for a balanced budget approaches.
The question everyone is asking: will a Republican legislature sell out their party and no tax increase pledge?
Now to the links:
Jerry Brown offers state budget update in new video
Gov. Jerry Brown said in an online video Sunday that he wants changes in pensions regulations and state pensions to be part of a budget deal, but he still lacks the support from four Republican lawmakers to place those reforms and billions in taxes before voters this fall.
Brown said his plan “will put California’s finances on a firm footing for many, many years to come…but what we don’t have are the four Republican votes necessary to put it to a vote of the people of California.”
He did not outline what those policy changes would entail, but said he was “really perplexed at why a package of this magnitude and this permanence … cannot be allowed for you the people to decide on.
Brown posted the video to his YouTube channel Sunday, just three days before lawmakers are constitutionally required to pass a budget, to give his budget status report to voters.
This year, for the first time, lawmakers’ pay will be docked if no spending plan is in place by Wednesday’s deadline.
Brown plans to hold a Capitol press conference Monday with representatives from many of the various groups that have backed his budget, and the idea of placing higher vehicle, sales and income tax rates before voters, along with changes to state pensions and a limit of future state spending.
GOP attacks bill that would ease local tax votes
Now that Republican lawmakers have voted against a renewal of expiring tax hikes, Democrats are turning to another, more complex way to generate revenue.
A bill proposed by state Senate President Pro Tem Darrell Steinberg and narrowly approved last week would dramatically expand the taxing powers of local governments, school boards and other jurisdictions.
But the bill, SB23-1X, would lead to such a complicated latticework of taxes that opponents say Steinberg is merely pulling a stunt to ramp up pressure against Republican lawmakers.
The Sacramento Democrat said his legislation would give public schools and law enforcement agencies a firmer source of funding if lawmakers don’t come up with one directly.
It would grant sweeping authority to local governments to raise money, with voter approval, through taxes on income, vehicles, alcohol, tobacco, medical marijuana, soda and companies that pump oil in California.
Steinberg introduced his local tax proposal on Friday, soon after the defeat in the Senate of the main bill to renew temporary increases in the statewide sales and vehicle taxes that will expire June 30. It passed, but with only the bare 21-vote majority needed. One Democrat voted against it and three others abstained.
The bill applies to counties, school districts, community college districts and county offices of education. Critics said it would create a logistical nightmare of inconsistent tax policies that likely would be challenged in court and with a ballot referendum seeking to repeal it.
Redistricting: Rohrabacher says he’s staying put
With the release of a round of redistricting maps Friday, I mentioned that GOP Reps. Dana Rohrabacher, John Cambpell, Ed Royce and Gary Miller could be playing musical chairs.
Rohrabacher may be busy in the Middle East, but he found time to make it clear he doesn’t plan to look for a new district to run in.
The latest drafts throw Rohrabacher, R-Costa Mesa, and Campbell, R-Irvine, into the same coastal district (“OCCOAST” on the map). Campbell could run for the proposed Orange-Rancho Santa Margarita district instead – but Dave Gilliard, the consultant for Royce, R-Fullerton, says that Royce has been looking for a home in Orange and considers that the heart of his district.
If Royce stays in Fullerton and the new district surrounding that city, he could face Miller, R-Diamond Bar, since proposed map eliminate the GOP-advantage in Los Angeles County portion of his district. I’d give Royce the edge in that race, since Miller doesn’t live in the county.
Here’s the statement that came last night from Rohrabacher’s camp:
Congressman Rohrabacher announced today that whatever the end configuration of the districts, he will be running in the area of Orange County that he has represented for many years.
“I share a bond both philosophically and personally with these people. This is the area where people want limited government and personal liberty, which is something we share. I am raising my family here and feel very comfortable with the values of the people of this part of Orange County and they feel comfortable with me.”
Rohrabacher believes there’s likely to be shifts in the proposed district lines between now and the election but points to his long standing relationship with the people of the area.
“However the districts are shaped, I’m sure that the candidates and the voters will use this as a way of getting to know each other better. So we end up with districts that are more equal in population and voters who are more fairly represented.”
Enjoy your morning!
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Tags: California, Dana Rohrabacher, Flap's California Morning Collection, Jerry Brown
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