• California Proposition 30,  Jerry Brown

    Californians Look at Who is Giving Big Donations to Raise Your Taxes

    Yes on Proposition 30 Website

    This is California Governor Jerry Brown’s pet initiative and he is calling in all of the special interests, business and labor to support his tax increase proposal.

    But, Californians should be aware that although this targets high-income taxpayers, the majority of the money raised for the State of California to spend or squander comes from the sales tax increase.

    Here are the details of the tax initiative.

    • Raises California’s sales tax to 7.5% from 7.25%, a 3.45% percentage increase over current law. (Under the Brown Tax Hike, the sales tax would have increased to 7.75%)[3][4]
    • Creates three new high-income tax brackets for taxpayers with taxable incomes exceeding $250,000, $300,000, and $500,000. This increased tax will be in effect for 7 years.[3][5][6]
    • Imposes a 10.3% tax rate on taxable income over $250,000 but less than $300,000–a percentage increase of 9.71% over current policy. The 10.3% income tax rate is currently only paid by taxpayers with over $1,000,000 in taxable income.[7].
    • Imposes an 11.3% tax rate on taxable income over $350,000 but less than $500,000–a percentage increase of 17.7% over current policy.
    • Imposes a 12.3% tax rate on taxable income over $500,000–a percentage increase of 24.39% over current policy.
    • Based on California Franchise Tax Board data for 2009[8], the additional income tax is imposed on the top 3% of California taxpayers.

    Estimated revenue from Proposition 30 vary from Jerry Brown’s $9 billion estimate to the $6.8 billion estimated by the non-partisan Legislative Analysts Office (LAO).[9]. The difference stem for the volatility caused by capital gains income from high-income earners, an issue in California’s tax system previously identified by the Legislative Analysts Office (LAO).[10]

    And look at who is contributing. Capitol Weekly has a story.

    And, Ballotpedia has a chart.

    California Teachers Association $1,523,724 1346049
    PACE of California School Employees Association $1,250,000 1346049
    American Federation of Teachers $1,200,000 1346049
    Service Employees International Union Local 1000 Issues PAC $1,053,218 1346049
    Democratic State Central Committee of California $1,041,855 1346049
    California State Council of Service Employees $1,000,819 1346049
    California Federation of Teachers COPE $800,000 1346049
    United Domestic Workers of America Operating Account $800,000 1343257
    California Hospitals Committee on Issues, Sponsored by CAHHS $500,000 1343257
    United Brotherhood of Carpenters and Joiners of America $500,000 1343257
    Educators and Working Families to Restore California $360,000
    State Building and Construction Trades Council of California $350,000
    American Beverage Association $250,000
    California Medical Association PAC $250,000
    California State Council of Laborers Issues PAC $250,000

    Let the television commercials fly on this tax the rich, I mean tax everybody, tax scheme, because the Democrats who dominate the California Legislature cannot practice fiscal restraint.

    I bet this initiative will pass and everyone this next year will be sending more of their hard-earned income to a state government which spends without end.

  • California Citizens Redistricting Commission,  California State Senate,  David Cruz Thayne,  Elton Gallegly,  Flap's California Morning Collection,  Jerry Brown

    Flap’s California Morning Collection: August 18, 2011

    A morning collection of links and comments about my home, California.

    Westlake Village man announces plans to run for new 26th Congressional District

    David Cruz Thayne, a former professional tennis player from Westlake Village, on Wednesday became the second Democrat to announce plans to run in the newly drawn 26th Congressional District, which covers most of Ventura County.

    Thayne, 40, is a tennis coach and the producer of two tennis-themed documentary films. He joins Moorpark City Councilman David Pollock as the only announced candidates in a district that is expected to attract considerable national attention. It is home to no incumbent and the partisan leanings of its voters are such that the candidates in last fall’s governor’s race were separated by only 1 percentage point.

    The district includes all of Ventura County except for most of the city of Simi Valley and a small slice of the city of Ventura. The city of Westlake Village is the only area of Los Angeles County in the district.

    It is likely the district in which incumbent Rep. Elton Gallegly, R-Simi Valley, will run if he chooses to seek re-election. Although his home is a few blocks outside the district boundary, Gallegly has represented much of the area for the last two decades.

    The incumbent congressman has made no announcement about his plans for 2012.

    California governor not interested in Prop 13 reforms

    Gov. Jerry Brown on Wednesday turned down a challenge from the mayor of Los Angeles to reform Proposition 13, saying he would prefer to focus his attention on bringing financial stability to California.

    Brown was responding to comments by Mayor Antonio Villaraigosa, who called on the governor and state lawmakers to think big in solving California’s ongoing fiscal problems. The mayor suggested the Prop 13 property tax cap be lifted for businesses and left in place for homeowners.

    Prop 13, however, is seen as untouchable by many politicians in the state because it is so popular with the electorate.

    During a speech Tuesday before the Sacramento Press Club, Villaraigosa urged the governor to convene a commission on tax reform and estimated that gradually lifting the Prop 13 cap for businesses could raise between $2.1 billion and $8 billion a year money the state could invest in education and lower property taxes for homeowners.

    Brown rejected the idea after making a luncheon address at Maddy Institute in Fresno.

    “I’m not planning to join (Villaraigosa), but I certainly welcome the debate,” Brown said. “I will focus my attention on ensuring financial stability and making the state more efficient.”

    Brown did not offer specifics beyond saying he plans to support a ballot initiative next year for new revenue. He also said jobs would come by generating confidence that California is on stable footing.

    One way he might do that is through infrastructure investment.

    Republicans take first step toward overturning new Senate districts

    A group of Republicans has taken the first step toward putting a referendum on the ballot that they hope will lead to the overturning of new Senate districts drawn by a state panel.

    Republican attorney Charles Bell asked the state attorney general in writing to prepare the title and summary of the referendum so that a petition drive can begin to qualify the measure for the ballot. The campaign needs to collect more than 504,000 signatures in 90 days.

    “The belief is that at least a number of the districts were not drawn in accordance with the [federal] Voting Rights Act and some provisions of the state Constitution concerning compactness and avoiding county splits,” said Bell, who is an attorney for the California Republican Party and the new campaign committee Fairness and Accountability in Redistricting.

    Bell said Wednesday he submitted the request on behalf of the campaign committee, which includes Orange County businesswoman Julie Vandermost. The referendum drive is being supported by the state party as well as the Senate Republican Caucus.

    Common Cause blasts referendum targeting new Senate districts

    The head of California Common Cause said Wednesday that a Republican-backed referendum drive to overturn new Senate districts is the work of “partisan insiders” and is attacking a plan that reflects the will of voters who approved an independent redistricting process.

    “This referendum is motivated by pure party politics, funded by incumbents who did not get the safe districts that they wanted,” said Kathay Feng, executive director of California Common Cause.

    Her organization was one of several that supported a 2008 ballot measure that created the 14-member Citizens Redistricting Commission, taking the job of redrawing legislative districts away from lawmakers.

    A referendum drive supported by the California Republican Party and Senate Republican Caucus has filed papers required before groups can begin collecting signatures to put the new districts before the voters.

    Enjoy your morning!

  • California,  California Budget,  Flap's California Morning Collection,  Jerry Brown,  Rick Perry

    Flap’s California Morning Collection: July 1, 2011

    A morning collection of links and comments about my home, California.

    Happy New Fiscal Year, California!

    It is a happy day for most California taxpayers as the California Sales Tax has decreased one percentage point and motor vehicle registration fees have decreased, as interim tax increases expire.

    It is not a happy day for hybrid automobile drivers since they will no longer have free rein driving in HOV – car poll lanes on California freeways.

    But, oh well, I don’t drive a hybrid but do buy products subject to the sales tax.

    California starts the new fiscal new year with a state budget which is unusual. But, alas, the budget is really a sham, full of gimmicks and slight of hand. But, hey, it passed California Democratic Controller John Chiang’s review and California Legislators will receive their paychecks. Just for your information, floor sessions are scheduled today so that our fair members of the California Assembly and State Senate can get their per diem for today and, of course, holiday pay for Monday.

    It is all about the money.

    With those happy thoughts it is onto the links:

    Jerry Brown signs budget after making more cuts

    California has a balanced budget for the fiscal year that begins today, after Gov. Jerry Brown on Thursday signed the spending plan to close what had been a $26.6 billion deficit when he took office in January.

    The governor used his line-item veto to cut an additional $23.8 million from the state’s $86 billion general fund. He also cut another $234 million of spending from bond funds, largely the high-speed rail fund, in a move that could jeopardize BART’s plan to replace aging rail cars. Money also will be blocked from reaching Muni and Caltrain projects.

    The governor also signed a bill, which is part of the budget package, that will take $130 million from cities across the state and could force some of those cities to disband.

    At a low-key bill-signing ceremony that was closed to all but a photographer, a TV cameraman and a radio reporter, Brown praised lawmakers for doing “an extraordinary job with a budget nobody really liked anyway.” He went on to say, “It really does put our fiscal house in much better shape, but we’re not finished.”

    Among the line-item vetoes the governor made in the general fund are a $22.8 million cut to courts. That money would have funded a part of the governor’s realignment plan to shift some inmates to county jails. The implementation has been delayed, and so court officials were expecting the cut.

    The governor saved nearly $2 million by eliminating the California Postsecondary Education Commission, which he called “ineffective,” and cut $200,000 from the budget for the Commission on the Status of Women. Because of complicated accounting, some of the money doesn’t fall under the veto total.

    Assembly Republicans celebrate ‘death’ of higher tax rates

    Your wallets will start feeling heavier tomorrow.

    That was the message from a handful of Republican Assembly members this morning as they applauded their resistance during budget talks to approving temporary tax extensions. The budget plan passed by the Legislature this week assures that those taxes will expire at midnight, which the legislators say will save the average Californian about $260 each year.

    “This is a great day for California,” said Assemblyman Tim Donnelly, R-Twin Peaks. “The death of these taxes is the rebirth of our economy.”

    As the legislators gathered in front of a pair of SUVs at Downtown Ford in Sacramento, Assembly Republican leader Connie Conway said that someone buying a $20,000 car this weekend would pay $300 less in taxes and fees than if they bought the car today.

    “We’ve held the line. We’ve not negotiated. We’re very happy that July 1st is coming,” said Assemblyman Steve Knight, R-Palmdale.

    Gov. Jerry Brown’s original budget plan required at least two Republican votes each from the Assembly and the Senate. It would have held steady the rates for income and sales taxes and vehicle license fees. Instead, all of those rates will drop under the spending plan that Brown is expected to sign into law today.

    Texas Gov. Rick Perry wows conservatives in the OC: “Heavy on candor, light on pander”

    Republican Texas Gov. Rick Perry was a whirlwind in the Golden State Thursday, racking up the miles, talking up his record — and meeting with potential supporters and donors.

    And he’s not even running for President — yet.

    Perry held a breakfast with San Diego insiders yesterday, and today hit Los Angeles, two events in Orange County and then flew to Sacramento.

    We checked in with Jon Fleischman, publisher of the popular GOP website FlashReport, who co-hosted a grassroots meeting of 60 Republicans in Newport Beach for Perry with OC GOP chair Scott Baugh. He said the Lonestar State gov’s initial reviews from party activists and conservative stalwarts were strong.

    “He was really, really impressive. He comes off as a very genuine — heavy on candor and light on pander,” said Fleischman. “Part of what we’re looking for is someone who has authenticity….who resonates, and has an ability to connect.”

    “He’s got a very strong record of accomplishment that will appeal to GOP voters,” Fleischman said. “This is someone who isn’t going to have any problem going into meetings with major donors and blowing people away.”

    So is he running? Bet on it, says The Flash.

    UC Berkeley out-of-state student enrollment soars

    The number of out-of-state students is soaring at UC Berkeley, with new figures showing more than a quarter of newcomers on campus – freshmen and transfer students – won’t be from California this year. That’s up from 23 percent last year, and 15 percent two years ago.

    More important for the campus, the nonresidents pay nearly three times the tuition of in-state students, and will bring in $80 million this year, up from $54 million last year, spokeswoman Janet Gilmore said.

    The trend is similar throughout the University of California, although Berkeley far outpaces other campuses in its zeal to bring in the lucrative outsiders.

    Across UC’s nine undergraduate campuses, 14 percent of the freshmen and transfer students who plan to enroll this fall are from out of state, up from 11 percent last year, and 9 percent the year before, according to figures released Thursday.

    Enjoy your morning!

  • Amazon Tax,  Internet Sales Taxes,  Jerry Brown,  John Chiang

    Amazon Cuts California Affiliate Ties Over Internet Sales Taxes

    Just like they warned the California Legislature and California Governor Jerry Brown. Here is the termination letter I just received via e-mail:

    Well, at least Californians were forewarned.

    Now, what about that assumption in the recently (last night) enacted California state budget? You know, the one that had the state realizing $200 million as a result of this tax.

    Since all of the Amazon Associates, like me are now out of a job, guess that really is a ROSY Scenario and an “unbalanced” budget.

    Over to you, California Controller John Chiang

  • Amazon Tax,  California,  California Budget,  Jerry Brown,  Lois Capps

    Flap’s California Morning Collection: June 28, 2011

    A morning collection of links and comments about my home, California.

    Yesterday afternoon Democratic Governor Jerry Brown and Democratic Legislative leaders announced a new agreement on a majority-vote California state budget. Here are the details:

    It maintains parts of the package Brown vetoed nearly two weeks ago:
    — $150 million cut each to University of California, California State University
    — $150 million cut to state courts
    — $200 million in Amazon online tax enforcement
    — $2.8 billion in deferrals to K-12 schools and community colleges
    — $300 million from $12 per vehicle increase in DMV registration fee
    — $50 million from fire fee for rural homeowners
    — $1.7 billion from redevelopment agencies
    — Higher tax receipts (now worth $1.2 billion from May and June)

    The new budget rejects some parts of that package:
    — $1.2 billion from selling state buildings
    — $900 million from raising a quarter-cent local sales tax
    — $1 billion from First 5 commissions
    — $500 million cut in local law enforcement grants
    — $540 million deferral to University of California
    — $700 million in federal funds for Medi-Cal errors

    And it adds the following:
    — $4 billion in higher projected revenues in 2011-12, with triggered cuts
    — 1.06 percentage point sales tax swap that redirects money to local governments for Brown’s “realignment” plan rather than to the state. Sales tax rate will still fall 1 percent on July 1.

    The $4 billion “trigger” plan bears some explaining.

    First, the plan requires Brown’s Department of Finance director, Ana Matosantos, to certify in January whether the $4 billion projection is accurate. She will use revenue totals for July to December and economic indicators to project the remainder of the fiscal year.

    The “trigger” cuts are essentially in three tiers, based on how much of the extra $4 billion comes in.

    Tier 0: If the state gets $3 billion to $4 billion of the money, the state will not impose additional cuts and roll over any balance of problem into the 2012-13 budget.

    Tier 1: If the state gets $2 billion to $3 billion of the money, the state will impose about $600 million of cuts and roll over the remainder into the 2012-13 budget. The $600 million in cuts include a $100 million cut to UC, a $100 million cut to CSU, a $100 million cut to corrections and a $200 million cut to Health and Human Services.

    Tier 2: If the state gets $0 to $2 billion of the money, the state will also impose up to $1.9 billion in cuts, including a $1.5 billion reduction to schools that assumes seven fewer classroom days. It also includes a $250 million elimination of school bus transportation (except for that which is federally mandated). Cuts will be proportionate to how much of the first $2 billion in revenues the state gets. State will also impose the Tier 1 cuts.

    Talk about gimmicks. This budget is all smoke and mirrors with assumptions that are not within the realm of possibility.

    Look at the Amazon Tax for example. Is there anyone who believes the state will capture $200 million in additional revenue when Amazon et. al. say they will cease their associate businesses in California if the law is signed. Plus, they plan to challenge the legislation in state and federal courts and what will that cost the State of California.

    So, the Democrats have made a deal that will hopefully get past the Democratic Controller John Chiang in order to restore the Legislators pay. But, in all reality, this budget deal is a sham based on wildly exaggerated revenue assumptions – a rosy scenario at the extreme.

    On to today’s links……

    Dan Walters: Will Democrats’ rosy-scenario budget work?

    When governors and legislators face seemingly big budget deficits, they often turn to gimmicks to balance income and outgo on paper.

    The most creative have been what Capitol cynics call “rosy scenarios.”

    The politicians conjure up some new source of revenue, swear it is legitimate and then use the projected windfall to close their gap.

    Former Gov. Arnold Schwarzenegger was an early advocate of rosy scenarios, such as assuming that the state could get as much as $1 billion from new gambling compacts with Indian tribes, or it could seize a half-billion dollars from punitive judgments in lawsuits.

    Later, he counted revenues from peddling the state’s workers’ compensation insurance business and state buildings. His rosiest scenario occurred last year, when his initial budget assumed that the federal government would give the state as much as $7 billion in extra cash.

    None of those funds materialized, but that doesn’t prevent Capitol politicians from dusting off another rosy scenario.

    Gov. Jerry Brown and Democratic legislators, whose hopes of winning Republican support for tax extensions vanished, ginned up a new budget Monday, just days before the 2011-12 fiscal year is to begin.

    Brown vetoed one Democratic budget, saying it was so gimmicky that Wall Street bankers would not give the state billions of dollars in short-term operating loans. And Controller John Chiang followed that by decreeing that since a balanced budget wasn’t enacted by the constitutional deadline of June 15, he’d cut off legislators’ salaries and expense payments as a new state law requires.

    Brown and Democrats went back to the budgetary drawing board, and a new rosy scenario emerged – that above-expectation tax revenue this year means the state will collect an extra $4 billion during the fiscal year.

    Brown ditches special election, plans more cuts

    Gov. Jerry Brown on Monday abandoned his plan to hold a special election this year on whether to renew expiring tax hikes and instead said he will balance California’s budget with a combination of spending cuts and a projected increase in normal tax revenue.

    Brown announced the latest approach at a news conference during which he was accompanied by the leaders of the state Assembly and Senate, both fellow Democrats. They agreed to pursue a budget for the coming fiscal year without support from Republicans, who had refused to accept an extension of expiring temporary tax increases, which had been the centerpiece of the Democratic approach.

    Brown had hoped to extend a series of tax increases that are expiring this week, but he needed two Republican votes in each house to bring the proposal before voters.

    After six months of talks with a handful of GOP lawmakers, Brown said he finally gave up on the idea Sunday night after receiving a text message from one of the lawmakers.

    “We had some very serious discussions. I thought we were getting close, but as I look back on it, there is an almost religious reluctance (among Republican lawmakers) to ever deal with the state budget in a way that requires new revenues,” Brown told reporters during a brief news conference.

    Instead, the Democratic leaders said they would pursue a ballot initiative to bring tax increases before voters in November 2012.

    Congressional Republicans launch TV spot against Democratic Rep. Lois Capps in midst of redistricting

    In some early fallout from the political upheaval expected under proposed new districts for California lawmakers, the campaign arm for House Republicans said it would begin airing a TV ad slamming Rep. Lois Capps (D-Santa Barbara) over her position on Medicare.

    “Congress is debating big changes for Medicare, and Congresswoman Lois Capps voted for the most extreme plan. Capps voted for the plan the media says would ‘decimate Medicare,'” the narrator says in the spot that the National Republican Congressional Committee said would begin airing Tuesday.

    Republicans see Capps as among the most vulnerable of the Democrats under the redistricting. Her district, derided as the “ribbon of shame” for its blatant gerrymandering, forms a narrow, 200-mile coastline band that runs from Oxnard to the Monterey County line. Under the first round of proposed new maps, her district would shift considerably and become less Democratic than currently.

    Enjoy your morning!

  • California Citizens Redistricting Commission,  Flap's California Morning Collection,  Jerry Brown,  Los Angeles Community College District,  Peter Foy,  Proposition 13

    Flap’s California Morning Collection: June 24, 2011

    A morning collection of links and comments about my home, California.

    The first from my friend Jon Fleishman who had this excellent video from Simi Valley neighbor and  Ventura County Supervisor Peter Foy of the Americans for Prosperity on the Los Angeles Community College District.

    Gov. Jerry Brown sees little progress on budget, but insists ‘I’m not giving up’

    Gov. Jerry Brown said Thursday he was increasingly skeptical that a tax deal could be struck before the July 1 beginning of the new fiscal year, as Democrats and Republicans heatedly blamed each other for the impasse.

    Brown, who issued a historic veto of Democrats’ budget plan a week ago, told a gathering of about 250 apartment owners and developers in San Francisco that he continues to seek GOP support for his budget plan, which includes a tax referendum in the fall.

    “I’m not giving up,” Brown said, even if he has grown less sanguine about the prospect of a legislative accord.

    Although state Controller John Chiang this week invoked a new law to halt lawmakers’ pay until there’s a budget in place, the renewed commotion in the Capitol has produced little progress.

    A critical sticking point is that Brown wants to extend sales and vehicle taxes — which Republicans oppose — until an election can be held. He needs the support of at least four GOP lawmakers for both moves. If he fails, the governor said, he will help gather signatures to place taxes on the ballot next year.

    “It will take the use of the initiative, in all probability,” he said, to restore California’s financial health.

    With talks slipping and time running out, Republicans held an unusual news conference outside the doors of the governor’s Capitol office to blame Brown and his labor supporters for the lack of progress.

    “The public unions and the governor have become the problem in this, not the Republicans,” said Sen. Bob Huff (R-Diamond Bar).

    In Wood Ranch, nobody planned for this Congressional district boundary

    When it comes to drawing a new congressional district, the phrase “close enough for government work” does not apply.

    And, for the moment at least, that’s a problem for residents of the master-planned community of Wood Ranch in Simi Valley.

    Under case law stemming from the U.S. Supreme Court’s landmark “one man-one vote” decision in 1962, congressional districts in each state must be drawn to make the population of each almost exactly equal.

    Under that formula, as the Citizens Redistricting Commission goes about drawing 53 new congressional districts this year in California, each one must have 702,905 people. A variance of one person is allowed.

    So where does Wood Ranch come in?

    In the draft map for a new congressional district that includes most of Ventura County, the commission moved Moorpark and Simi Valley to a separate district to the east. That arrangement would avoid splitting any city in the county almost.

    It turns out the commission needed to take 2,000 people from the combined Moorpark-Simi Valley population of 158,658 to make the numbers work out. To accomplish that, the commission drew a line down the middle of Wood Ranch Parkway.

    Simi Valley city officials and residents of Wood Ranch appealed to the commission to find its 2,000 people somewhere else.

    “The proposed boundaries fracture neighborhoods in Wood Ranch and place neighbors living on opposite sides of the street in different congressional districts,” wrote Mayor Bob Huber in a letter to the commission. “These divisions appear inconsistent and incompatible with the commission’s goal of respecting neighborhood boundaries to the extent possible.”

    Testifying before the panel at a hearing this week in Oxnard, Richard Olson, representing a Wood Ranch homeowners’ association, asked that the planned community be reunited.

    “There are 2,000 residents who have separated from everything,” he said.

    Jerry Brown says Proposition 13 could be tested if budget talks fail

    Gov. Jerry Brown hinted Thursday that if the budget talks with Republicans break down, the initiative fight that would follow would not be limited to Brown’s plans to raise sales, vehicle and income taxes. He said he expects labor groups to pursue changes to Proposition 13, tweaking the current caps on commercial property taxes, if no bipartisan deal can be reached.

    “I would expect there will be efforts to accelerate the reassessment of commercial property tax,” Brown said.

    During his remarks to about 250 apartment owners and developers at the Moscone Center on Thursday, he acknowledged some of his failures in budget talks, particularly over his proposal to eliminate redevelopment agencies.  “I wouldn’t be ready to write the obituary of redevelopment agencies,” he said. “They’re very powerful and they’re still alive and well despite my best efforts.”

    Enjoy your morning!

  • California,  California Citizens Redistricting Commission,  Flap's California Morning Collection,  Jerry Brown

    Flap’s California Morning Collection: June 23, 2011

    A morning collection of links and comments about my home, California.

    Questions abound over what’s next at Capitol

    Anticipating Gov. Jerry Brown’s next move on the budget is as beguiling as parsing the mutterings of an oracle on a snowy mountain top.

    Does he have any other surprises to spring on Democrats?

    Is he any closer to persuading a handful of Republicans to vote for tax extensions?

    The developments over the past week were stunning: Brown’s veto, the first in modern California history; then Controller John Chiang’s unprecedented decision to not pay legislators, declaring that the budget the Democratic-controlled Legislature approved was not balanced.

    Here are some other questions that beg to be answered as the Capitol tries to sort out what just hit it:

    Q What effect will Chiang’s decision to forfeit pay to legislators have on budget negotiations?

    A Legislators say they would never vote out of personal interest over principle, but for those who need to make payments on apartments in Sacramento as well as on their district homes, the financial crunch could be an effective motivator to get something done

    One could argue that legislators already voted for their financial interests by passing what many said was a get-out-of-town budget to meet the constitutional deadline, so the evidence of self-interested votes is already there.

    Q Despite all the gnashing of the teeth over Chiang exceeding his authority in judging whether the budget passed muster, will anyone have the guts to challenge his ruling?

    A Someone, undoubtedly, will challenge the ruling. But it’s at the risk of further disenchanting the public, which voted to punish lawmakers if they didn’t pass a budget on time. It would be in the Legislature’s best interest if they took their lumps and arrived quickly at a balanced budget.

    Q What if the Legislature approves a budget, Brown signs it, but Chiang rules it is not in balance?

    A Then, you might have a real constitutional crisis. But Chiang might as well open up his exploratory committee for the governorship.

    Q What’s Brown’s next move?

    A First he’s got to find a way to calm the emotions of angry Democrats, who felt betrayed by Brown’s veto and Chiang’s decision to withhold their pay. Brown started the healing process Tuesday by meeting with Democratic caucuses from both houses.

    Wednesday, his staff restarted discussions with Democratic legislative staffs on various budget alternatives, including one that would bypass Republicans with another straight majority vote.

    Q But wouldn’t that require an all-cuts budget that Democrats are reluctant to do?

    A Nobody said this was easy. Brown has to thread the needle so that he avoids any hint of gimmickry while minimizing the damage of finding an additional $9.6 billion to cut (on top of nearly $12 billion already).

    Democrats see real fight in California special election

    When Republican Craig Huey got into the runoff in California’s 36th district special election, it came as a surprise. An even bigger surprise: it looks like Huey might actually have an outside chance at winning.

    Before the May 17 “jungle primary” to replace retired Rep. Jane Harman (D) observers were expecting a race between two liberal Democrats, Los Angeles City Councilwoman Janice Hahn and California Secretary of State Debra Bowen. Instead, Huey came in second to Hahn thanks to low turnout and a fractured Democratic field. Both advanced to a run-off that Hahn seemed almost certain to win.

    Yet Democrats appear to be treating this race as a real fight. Hahn’s campaign went hard after a third-party web ad that depicted the Democrat as a stripper. Even after Huey personally denounced the video as racist and sexist, Hahn alleged coordination between him and the outside group that made it.

    “We’re fighting hard in that race,” House Minority Leader Nancy Pelosi told the Post Wednesday. “It’s not as easy a race, as overwhelming a race and Democratic seat as people like to think it is.” In reference to the anti-Hahn ad, Pelosi said, “It’s a contest, and they know that.”

    Redistricting forum draws plenty of opinions in Oxnard: Ventura County residents want no part of L.A.

    Saying that Oxnard and Simi Valley are “like oil and water,” a Ventura-based community organizing group presented alternative political district maps to a statewide commission on Wednesday that would politically sever Simi Valley from the rest of Ventura County in all legislative and congressional districts.

    The plan, presented to the Citizens Redistricting Commission at a hearing in Oxnard, was immediately backed by Supervisor John Zaragoza of Oxnard and Thousand Oaks Mayor Andy Fox.

    CAUSE, a group that advocates for the interests of low-income and minority residents of the Central Coast, presented detailed maps to make adjustments to draft Assembly district proposals released by the commission earlier this month. The adjustments would keep the populations of each district at the required level.

    The proposal — which CAUSE called the “Oxnard-Thousand Oaks unity map” — would resolve complaints that the commission’s draft plans split both cities into parts of two different Assembly districts. It would unite both cities and put them in the same district, which would include Camarillo.

    To accomplish that, the alternative would place Simi Valley in Los Angeles County-based Assembly and Senate districts. The commission already has proposed to do that in its congressional district maps.

    Christopher Lanier of CAUSE said the revised proposal would properly separate any part of Oxnard from any district that also includes Simi Valley. The two cities, he said, “are like oil and water.”

    Thousand Oaks Mayor Fox was less reluctant.

    “This process has in some ways pitted communities against communities,” he said. If any part of Ventura County is to be politically excluded, “it makes more sense to put Simi Valley and Moorpark with Santa Clarita.

    The commission will accept written testimony on its draft maps through Tuesday. It is scheduled to release revised drafts on July 12, before voting on final plans that must be submitted to the secretary of state by Aug. 15.

    California budget cuts slash monitoring of gang parolees

    While state prison officials plan to move tens of thousands of inmates to county jails in a highly publicized budget move, they began another money-saving effort last month: removing GPS tracking devices from hundreds of paroled gang members.

    Corrections officials had been monitoring about 950 gang members statewide through GPS, but budget cuts are forcing them to cut the number to 400 by July 1, said Oscar Hidalgo, spokesman for the California Department of Corrections and Rehabilitation.

    “We have to make some difficult choices,” Hidalgo said. “Obviously, during better fiscal times, we would work to increase those numbers once again.”

    The reductions, which are saving the state $6 million, include the removal of tracking devices from 40 of the 60 gang members monitored in Sacramento County. The cuts come at a particularly difficult time for local law enforcement agencies, especially the Sacramento Police Department, which is disbanding its gang unit next week.

    “We’re not going to have any gang detectives in a week,” Officer Laura Peck said, adding that the 14-member unit is being shifted to other duties because of impending layoffs.

    “Hopefully, the community is watching and the community can call us if they see any type of suspicious activity,” she said.

    Enjoy your morning!

  • California,  Flap's California Morning Collection,  Jerry Brown,  John Chiang,  Jon Huntsman,  Poker,  Tobey Maguire

    Flap’s California Morning Collection: June 22, 2011

    A morning collection of links and comments about my home, California.

    California Controller John Chiang decided yesterday afternoon that he would withhold paychecks from California Legislators since they did not pass a “balanced” budget by the deadline as specified by Proposition 25. Now, remember they did pass a budget which was quickly vetoed by Democrat Governor Jerry Brown. This budget was not “balanced” enough for the California Controller.

    Oh well – back to the drawing board.

    However, this is not stopping these same Legislators from soliciting campaign cash this week.

    Monday, Republican Sen. Bill Emmerson was looking to bulk up his campaign chest for re-election next year.

    Tuesday saw nine legislators making the restaurant rounds from Spataro to Chops to Esquire Grill and beyond: Democratic Assemblymen Marty Block, Das Williams and V. Manuel Pérez, and Sen. Curren Price; plus Republican Assembly members Dan Logue, Katcho Achadjian, Chris Norby and Diane Harkey, and Sen. Sam Blakeslee.

    Today, these lawmakers continue the quest: Democratic Assemblymen Ben Hueso, Sandré Swanson and Henry T. Perea and Sen. Noreen Evans; plus Republican Assemblymen Brian Jones and Don Wagner, and Sens. Doug LaMalfa and Mark Wyland.

    Who ever said these POLS would be starving with or without balancing the California budget?

    On to this morning’s California links.

    Tobey Maguire Sued Over Multi-Million Dollar Illegal Poker Game; DiCaprio, Affleck & Damon Involved

    Spider-Man star Tobey Maguire is among more than a dozen high-profile Hollywood celebrities being sued in connection with a mega-millions illegal gambling ring that ran high-stakes underground poker games, Star magazine is reporting exclusively.

    Maguire, 35, won more than $300,000 from a Beverly Hills hedge fund manager who embezzled investor funds and orchestrated a Ponzi scheme in a desperate bid to pay off his monster debt to the star and others, it’s alleged.

    An FBI investigation into Brad Ruderman, the CEO of Ruderman Capital Partners, uncovered how he lost $25 million of investor money in clandestine poker games held on a twice weekly basis in suites at the luxury Beverly Hills hotel, Four Seasons, and the Viper Room on Sunset Boulevard.

    Brown Plots New Budget as California Lawmakers Forfeit Pay for Being Late

    California Governor Jerry Brown has drafted a plan to pass a budget through the Legislature that sidesteps Republicans who blocked a previous effort, according to two people with knowledge of the matter.

    Brown’s proposal comes as legislators have been forced to forfeit pay for every day they fail to send a balanced budget to the governor past a June 15 deadline. He vetoed a spending plan sent to him by Democrats last week, saying it used legally doubtful maneuvers and one-time fixes.

    “I’ll be sharing some very specific ideas tomorrow,” Brown said to reporters as he left a meeting with Assembly Democrats yesterday. “There will be several ideas I’ll propose.”

    Timm Herdt: Brown can’t get 4 votes; how can he get 81?

    Legislators, Democrats and Republicans alike, know all that and they simply won’t swallow the bitter medicine that the grown-up Brown says is the only alternative if he doesn’t get the chance to ask voters to weigh in on extending current tax rates.

    From the legislators’ perspective, when compared to their other choices, the idea of muddling through for another year without solving the state’s chronic fiscal problems doesn’t seem like such a terrible option.

    Thus far, Brown hasn’t wavered from the plan he put forth in January. But the new fiscal year begins a week from Friday.

    “The next step is the governor’s,” Senate President Pro Tem Darrell Steinberg, D-Sacramento, said Monday. “If he wants to suggest a budget with significantly deeper cuts to education, health care and public safety, we’ll take a look at it.”

    If Brown is forced to take that step, know this: It won’t be nearly as popular as his veto.

    Huntsman to hold California fundraisers

    Jon Huntsman, fresh off his campaign launch, will host three high dollar California fundraisers next week.

    The former Utah governor will be in San Diego on June 26th, and Orange County and Los Angeles on June 27th. Dinner with Huntsman will cost donors $1,000, while a VIP cocktail reception will cost the primary election maximum of $2,500. Huntsman is also soliciting high dollar bundlers to raise money on his behalf and offering them perks like a seat at the head table and extra VIP tickets for high dollar commitments.

    Enjoy your morning!

  • California,  California Budget,  Jerry Brown,  John Chiang

    California Controller John Chiang Says California Budget NOT Balanced and Refuses to Pay Legislators

    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.


  • Amazon Tax,  Internet Sales Taxes,  Jerry Brown

    California Coalition to Protect Small Business Jobs Urges Governor Jerry Brown to Veto Amazon Internet Sales Tax Legislation – AB 28X

    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.


    The Amazon Tax Archive