Good Monday morning!
The California Legislature is not in session for a summer recess.
The California Assembly has adjourned until August 6, 2012 and the California State Senate is also in adjournment.
On to today’s California headlines:
The California Democratic Party has made its support of Gov. Jerry Brown’s tax initiative official.
The party’s executive board voted to endorse Proposition 30 at a weekend meeting in Anaheim. The measure would generate an estimated $8.5 billion in revenues assumed in the current state budget by temporarily raising income taxes on high earners and enacting a quarter percent hike in the state sales tax.
The board voted to oppose a rival tax initiative backed by civil rights attorney Molly Munger and the California State PTA. Proposition 38 would raise income taxes on a sliding scale for most Californians, sending the bulk of the revenues to schools and early childhood development programs.
The IRS is taking a new look at whether public pension systems qualify for tax deferrals, raising questions about nonprofit charter schools in CalSTRS and county systems using “excess” earnings to fund retiree health care.
Taxes on employer-employee contributions to pension systems and their investment earnings can be avoided until retirees are paid. But if the rules are not followed, the IRS can change the tax status and impose fines and penalties.
As public pension funding problems surfaced during the economic downturn, the U.S. Internal Revenue Service began encouraging retirement systems to seek compliance reviews and make voluntary changes.
Some large systems, such as the California State Teachers Retirement System, have not had full tax reviews in recent decades, relying instead on IRS approval of specific issues.
(The giant California Public Employees Retirement System and the University of California Retirement System did not respond to queries last week about the status of their tax compliance reviews.)
Last April, CalSTRS said in a letter to the IRS that a proposed new rule, aimed at excluding non-government employees from public pensions, could make more than 10,000 charter school employees now in CalSTRS ineligible for the retirement system.
Call it the bachelor or bachelorette party of tomorrow: you and your friends sipping cocktails aboard a futuristic train as it whips travelers across the desert to Las Vegas.
You might have to wait awhile, but it’s not such a long shot. Lost in the fractious debate over California high-speed rail is a separate, little-publicized plan for a second bullet train that would connect the Golden State with Sin City. Private developers are wagering on the Vegas train, hoping the Obama administration in coming weeks provides a record rail loan to kick-start construction on the $8 billion-plus train line that could someday connect to California’s much-debated high-speed railroad near Los Angeles.
The vision for the 150 mph party train is as audacious as the gaudy casinos, shows and night life that attract 1.5 million visits to Vegas from the Bay Area each year. Partyers could pay the equivalent of a pricey plane ticket and step onto the Las Vegas Strip in less than 1 1/2 hours from Southern California.
“Consider the train an extension of Las Vegas,” said project COO Andrew Mack. “We definitely want to create that type of environment where they can sit back and relax.”
The jagged foothills, withered pastures and a web of horse trails along the Santa Ana River give the state’s newest city a hint of the Wild West. Jurupa Valley’s money troubles, though, are pure modern-day California.
Jurupa Valley may be broke in a year, even though the city is so new that it has no permanent employees, no generous employee pension plan and runs City Hall out of a leased strip-mall storefront next to the Lucky Wok Chinese restaurant.
Without a financial rescue, the city will have to shut its doors, sending the mishmash of Jurupa Valley communities back into the ether of unincorporated Riverside County.Unlike San Bernardino, Stockton and Mammoth Lakes, California cities that have all reached the brink of insolvency in recent weeks, Jurupa Valley’s money troubles are not of its own making. They are Sacramento’s fault.
Enjoy your morning!