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Sep 06 2011

Flap’s California Morning Collection: September 6, 2011

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Avalon, Catalina Island

The California Legislature is in session today as it speeds to complete its business by Friday. There are about 300 bills which remain for consideration and disposition.

Floor sessions begin today at noon in the California Assembly and California State Senate.

The California State Senate’s Schedule is here and the Assembly is here.

Today in the news is same sex marriage and California’s infamous Proposition 8.

The California Supreme Court’s newest justice, Goodwin Liu, hits the ground running this morning with a high-profile issue: Proposition 8.

The high court is hearing oral arguments in San Francisco on whether state law gives sponsors of the same-sex marriage ban the right to defend it in a case now pending before a federal appellate court.

U.S. District Judge Vaughn Walker of San Francisco struck down the voter-approved measure last year as unconstitutional. State officials, including Gov. Jerry Brown and Attorney General Kamala Harris, have declined to appeal. Another federal judge has since rejected the proponents’ argument that Walker’s decision should be overturned because he didn’t disclose that he is gay and in a long-term relationship.

Since interest is so high in the Perry v. Brown case, the California Channel will broadcast it live on its local cable channels and stream live online at calchannel.com. The proceeding starts at 10 a.m. at the Earl Warren Center, 350 McAllister St.

The legal wrangling on same sex marriage will be back and forth with the attorneys making a ton of money until the Supreme Court of the United States puts the issue to rest. I am afraid it will be quite a few years before the issue is resolved.

I say get on with it and make a decision – one way or another.

Also, in the news today is AB 155, the Amazon Tax bill.

The New York Times had a good precis on the California internet sales tax issue yesterday.

Opposing Amazon are traditional retailers as big as Wal-Mart and as small as the neighborhood bookstore — the few that are left. “Amazon is killing our business in bricks-and-mortar stores,” said Bill Dombrowski, head of the California Retailers Association, which was the driving force behind the original law.

Amazon easily collected the half-million signatures necessary to put the issue on ballots next June. Since people will in essence be voting on whether to pay an additional 8 or 9 percent when they buy online, Amazon could easily triumph among voters who are watching their wallets. Democrats in the Legislature responded with an urgency bill, a rare tactic used only a few times a year.

“We’re not doing this lightly,” said State Senator Loni Hancock, a Berkeley Democrat. “But it seems like Amazon doesn’t really care about the State of California or the people whose lives are affected by whether or not we have enough money for schools and roads and to keep the libraries and parks open.”

Any Californian who buys a book or a DVD player from Amazon is supposed to pay a use tax when filing state taxes. In practice, however, few do. For years, the issue has been simmering. Then came the withering recession, and the economic calculus changed.

In the two months since the law took effect, Amazon has declined to start collecting sales tax in California. Once it submits the signatures for the referendum and they are verified, the law will be suspended until the vote.

Senator Hancock and other Democrats say they have stopped shopping at Amazon. “This is getting pretty acrimonious,” said the California treasurer, Bill Lockyer, who said he was also boycotting the retailer. “It’s snarly.”

One has to wonder if Senator Hancock and California State Treasurer Bill Lockyer have paid their “use tax” to the State of California on their previous Amazon.com, Overstock.com et. al. purchases over the years.

Anyone have their tax returns?

Or, maybe California taxpayers should just call their offices and ask.

And, include California Democratic Assembly Speaker John Perez, along with Hancock and Lockyer.

Assembly Speaker John A. Pérez and other legislators join business leaders, including Bill Dombrowski of the California Retailers Association, to urge the Legislature to reject Amazon’s proposal to exempt it from collecting taxes for two years in exchange for distribution center jobs. Their news conference starts at 11 a.m. in the Capitol’s Room 317.

A few headlines for this morning:

Solorio: ‘I’ve Been Robbed’

Count Assemblyman Jose Solorio as another Orange County lawmakers who says he’s fallen victim to treasurer Kinde Durkee.

Meanwhile, the chief of staff to U.S. Rep. Loretta Sanchez says the congresswoman is in the “process of assessing the damage” after learning of Durkee’s arrest.

As first reported by the Orange County Register on Saturday, Durkee, a campaign treasurer for many California Democrats, was arrested by the FBI on suspicion of mail fraud. Durkee’s clients include at least 113 committees at the state level as well as federal clients, including U.S. Sen. Dianne Feinstein.

On Saturday, O.C. State Sen. Lou Correa, another Durkee client, told the Register that after speaking with the FBI about Durkee’s arrest he believes he has lost “hundreds of thousands of dollars” in campaign funds.

Solorio, a Santa Ana Democrat, sent an email to his supporters Sunday titled “I’ve Been Robbed. The FBI Has Arrested My Treasurer.”

“I wanted to reach out to you directly with the facts regarding the recent arrest of Kinde Durkee, the person I trusted as my campaign treasurer,” Solorio said in his statement to his supporters. “I hired her because she was regarded as a highly respected professional, and for decades, the treasurer for the campaigns of many prominent elected officials in the state.

“I received a call Friday afternoon by the FBI to be alerted that I and others are victims of a crime. In the coming days, you may read more about this developing story, but please know that with the help of my family, friends and supporters, we will eventually be able to recoup our losses and put this unfortunate incident behind us.”

Jerry Brown trying for last-minute bipartisan tax deal

Gov. Jerry Brown is pondering changes in the corporate tax swap plan he introduced last month in hopes of reaching a bipartisan accord before the Legislature adjourns for the year.

Although no final deal has been reached, the outline of a possible agreement began to emerge Monday. Like Brown’s original plan, it involves changing a 2009 law so that corporations could no longer choose which formula to use when calculating their state tax liability.

But instead of Brown’s original plan, which used the estimated $1.1 billion the change is expected to generate on new tax credits for businesses that hire California workers or buy new equipment, the new proposal would include more sweeping changes to the state’s business taxes.

Among the concepts being pushed by Republicans are tax cuts for corporations that pay personal income tax instead of corporate tax. The plan also includes reductions in the corporate tax rate for smaller businesses.

The state Board of Equalization would have some discretion to set the tax rates so that the amount in new tax credits is equal to the amount of revenue that the other changes are expected to generate.

Multiple legislative sources confirmed the bipartisan negotiations, but would not allow their names to be used for fear of damaging the fragile talks. Administration sources refused to confirm the details of the proposal.

It was unclear whether there was enough backing from Republicans or Democrats to get the revised proposal through the Legislature. Democrats have not yet signed off on the deal, and it was unclear whether an agreement could be reached before Friday, when the Legislature is scheduled to adjourn for the year.

Enjoy your morning.

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