Category Archive: California Taxes

Apr 12 2012

Flap’s California Afternoon Collection: April 12, 2012

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Lombard Street, San Francisco, California

Good Thursday Morning!

The California Legislature is in session.  Today’s schedule is here.

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

On to today’s California Headlines:

FEC delays decision in Durkee embezzle case

The Federal Election Commission on Thursday raised sharp questions but came to no firm conclusion over Democratic Sen. Dianne Feinstein’s bid for greater fundraising leeway in the wake of embezzlement by her former campaign treasurer.

The punt will give the FEC more time to consider whether California politicians ripped off by former treasurer Kinde Durkee can solicit additional funds from individuals who have already reached their contribution limit.

“We’re all sympathetic to your client,” FEC commissioner Ellen Weintraub told Feinstein’s attorneys Thursday morning, “but it’s still a hard question.”

Though the commission’s legal staff had recommended rejecting Feinstein’s request, the commissioners during a two-hour hearing indicated they thought it was a close call. Several voiced concern over the potential “implications” for other campaigns of granting Feinstein’s fundraising request.

“We have to do some special thinking,” Commissioner Steven Walther said. “We’re in a tight spot, and we need to think this one out.”

Feinstein wants contribution limits be lifted following revelations that Durkee had embezzled millions of dollars from dozens of campaign treasuries. Feinstein’s campaign alone reported losing at least $4.5 million under Durkee’s scheming. The FEC’s reasoning will apply to other former Durkee clients as well, and will also be closely attended to by the state’s Fair Political Practices Commission.

Court: Managers don’t have to ensure lunch breaks

In a case that affects thousands of businesses and millions of workers, the California Supreme Court ruled Thursday that employers are under no obligation to ensure that workers take legally mandated lunch and rest breaks

The unanimous opinion came after workers’ attorneys argued that abuses are routine and widespread when companies aren’t required to issue direct orders to take the breaks. They claimed employers take advantage of workers who don’t want to leave colleagues during busy times.

The case was initially filed nine years ago against Brinker International, the parent company of Chili’s and other eateries, by restaurant workers complaining of missed breaks in violation of California labor law.

But the high court sided with businesses when it ruled that requiring companies to order breaks is unmanageable and those decisions should be left to workers.

The opinion written by Associate Justice Kathryn Werdegar explained that state law does not compel an employer to ensure employees cease all work during meal periods, instead saying the employee is at liberty to use the time as they choose.

“The employer is not obligated to police meal breaks and ensure no work thereafter is performed,” Werdegar wrote.

The court’s decision could greatly reduce the numerous class-action lawsuits surrounding the issue that cost companies millions of dollars in legal costs.
“The courts are making it clear that you have to create a system and a procedure that fully allows employees an opportunity to take breaks and meal periods, and if they do that they do not have to be Big Brother and individually monitor each employee to ensure that they’ve taken every bit of their breaks,” said Steve Hirschfeld, founder and CEO of the Employment Law Alliance, an employer-side legal trade group.

Deadly shooting revives concerns about USC’s neighborhood

It started as a typical evening for Ming Qu and Ying Wu, two graduate students from China studying electrical engineering at USC.

After a night at the library, Qu drove Wu to the house where she was renting a room less than a mile from campus. He double parked in front of the home early Wednesday morning to continue talking.

At around 1 a.m., a gunman approach Qu’s BMW and opened fire, killing both students in an attack that shocked USC and rekindled long-held concerns about safety around the university.

Qu attempted to run for help after he was shot in the head and was found collapsed on a nearby porch, police said. Wu was found shot in the chest, slumped over in the passenger seat of the car parked on a tree-lined stretch of Raymond Avenue just south of Adams Boulevard.

The students, both 23, were close friends who spent evenings chatting on the front porch of the house where Wu lived, according to police sources, who requested anonymity because the investigation is ongoing. But on Wednesday, it was raining, so police believe the pair decided to stay in the car, which friends said was a 2003 model that Qu bought for about $10,000.

Police suspect a lone assailant of carrying out the killings, but LAPD Capt. Andrew Smith said investigators had little to go on and are examining all motives, including that the gunman was trying to rob the pair. More than a dozen Los Angeles Police Department homicide detectives canvassed the area Wednesday, going door-to-door to search for witnesses and reviewing intersection cameras for clues.

USC, south of downtown Los Angeles, has long dealt with worries about crime in the neighborhoods around the campus. But in recent years, some of those concerns have eased as crime plummeted, the university expanded and some of those neighborhoods, such as West Adams, gentrified.


California senators call for a vote on Jerry Brown’s pension plan

California’s ranking Senate Republican and one of the GOP’s representatives on a special pension committee have fired off letters to Gov. Jerry Brown and their Democratic colleagues in the Legislature, calling for a key committee vote on the governor’s pension reform plan later this week.

Republicans have embraced Brown’s plan and put it word for word in two bills. Senate Republican Leader Bob Huff of Diamond Bar and Sen. Mimi Walters of Laguna Niguel on Tuesday signed the letters delivered to Brown and pension conference committee co-chairs Sen. Gloria Negrete McLeod, D-Chino, and Assemblyman Warren Furutani, D-Gardena, pushing for a vote Friday when the committee meets in Southern California.

They asked Brown to “join us to demand immediate legislative action on your twelve point pension plan, which we believe represents the first steps that must be enacted to get our runaway pension system under control.”

Molly Munger puts $2 million more into California tax measure

With just weeks left to gather the signatures needed to qualify for the November ballot, civil rights attorney Molly Munger has poured another $2.15 million into her proposal to raise income taxes to fund schools.

Munger, president of The Advancement Project, is the sole financier of the “Our Children, Our Future Measure.” The proposal would raise taxes on a sliding scale for almost all California earners, routing the revenues directly to school districts and early childhood development programs.

Supporters of Gov. Jerry Brown’s rival tax measure, which would temporarily raise income taxes on high earners and increase the state sales tax by a quarter percent, have tried to persuade Munger to drop her measure to avoid confusion and mixed messaging that could arise with more than one tax hike in front of voters in November.

The Munger camp must collect roughly 504,000 valid voter signatures by to make it on the ballot. They likely need to submit those petitions signatures to elections officials by mid-May to be certified in time for the 2012 election.

Enjoy your afternoon!

And, lastly, Dan Walters explains why the City of Los Angeles may have to declare bankruptcy.

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Mar 15 2012

Flap’s California Morning Collection: March 15, 2012

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Los Angeles Marathon Map at Race Expo

Good morning!

The California Legislature is in session. Today’s schedule is here.

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

On to today’s California headlines:

Dan Walters Daily: Jerry Brown paddles on the left

Brown’s revised plan would hike income tax rate on $500,000 earners

In a hairpin turnabout, Gov. Jerry Brown is seeking a last-minute change to his tax proposal, a move to capture the energy of the populist ire toward the wealthy while trying to clear the November field of competing measures.

Brown said he wants to revise his initiative to incorporate elements of the chief rival proposal, a move rife with risks that include a fast-approaching deadline and potential new opposition. In return, backers of the so-called millionaire’s tax are withdrawing their ballot initiative and putting their weight behind the governor’s new plan to boost the hit on the wealthy while easing Brown’s previously proposed sales tax hike that all voters would pay.

“This united effort makes victory more likely and will go a long way toward balancing our budget and protecting our schools, universities and public safety,” Brown said in a joint statement with the California Federation of Teachers, President Pro Tem Darrell Steinberg, D-Sacramento, and Assembly Speaker John Perez, D-Los Angeles.

A deal came together over the weekend, when Brown promised to make his tax hike more progressive.

“Our values and principles are clearly reflected in this new initiative,” said Josh Pechthalt, the president of the teachers union.

Brown’s revised plan would put a larger burden on individuals who earn $500,000 or more a year, raising their income tax rate by 3 percentage points instead of his earlier plan for a 2 percentage point increase, while reducing his sales tax hike proposal from a half-cent to a quarter-cent. Those earning $300,000 to $500,000 would also see more of a tax hike: a 2 percentage point increase, rather than a 1.5 percentage point hike.

The new proposal also is expected to extend the period of the income tax hike from five years to seven.


Higher community college fee plan in Santa Monica would be a first in California

Depending on your perspective, Santa Monica College’s plan to charge students four to five times the normal fee to add sections to oversubscribed classes  is either a brilliant idea to cope with its shrinking revenues, or a misguided strategy making it more difficult for low-income students to reach their academic goals.

Given the depth of the community colleges’  financial woes, and the fact that there are 112 of them around the state, it is surprising that more of these revenue generating ideas have not surfaced.  But the Santa Monica plan is now being discussed across the system, as every college struggles to reconcile increasing demand with shrinking resources.

“To some, it offers increased access,” said Paul Feist, a spokesman for the California Community College’s Chancellor’s Office, referring to the Santa Monica plan.  ”Others will argue that this is a move to privatizing public colleges.  We recognize that this debate is going on.”

The interest that the plan has triggered is reminiscent of San Francisco City College Chancellor Don Griffin’s idea in 2009 to sell naming rights of college courses for $6,000 a course.

When the City College’s  Board of Trustees heard of the plan, they nixed it.

Santa Monica officials say they have no choice but to come up with a creative plan to meet student needs and stay solvent.  Since the 2008-09 school year, the college has had to cut the number of courses its offers from 7,434 to 6,288 this year,  a drop of 15 percent.  If voters fail to approve a tax initiative this November, that figure will jump to 23 percent.  Currently the college is serving 500 full time equivalent students without receiving any support from the state to do so, officials say.

CalPERS ‘smoothing’ eases employer rate shock

CalPERS is planning a two-year phase in of a rate increase resulting from a lower earnings forecast adopted yesterday, continuing a “smoothing” policy that softens the impact of rising pension costs on deficit-ridden state and local government budgets.

Lowering the investment earnings forecast from 7.75 to 7.5 percent is expected to increase the annual state payment to CalPERS by $303 million, pushing the total to $3.8 billion.

Critics contend CalPERS and other public pension funds use overly optimistic earnings forecasts to “discount” or reduce future pension debt, concealing a massive “unfunded liability” and the urgent need for cost-cutting reforms.

But CalPERS says its earnings averaged more than the 7.75 percent target over the last two decades. The new forecast stays the course and does not change the basic average investments are expected to earn, 4.75 percent.

What the board lowered is the forecast for 3 percent price inflation, which when added to the basic 4.75 percent return totaled 7.75 percent. The new inflation forecast of 2.75 percent drops the total earnings forecast to 7.5 percent.

“Your proposal is driven by an inflation assumption that I just don’t buy,” board member J.J. Jelincic told chief actuary Alan Milligan at a committee hearing. “I do admire your courage for bringing it forward.”

Jelincic, the apparent lone “no” in a board voice vote, argued that the U.S. Federal Reserve and central banks in other countries have “flooded” their economies with money, a stimulus likely to lead to inflation.

Enjoy your morning!

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Mar 08 2012

Poll Watch: California Governor Jerry Brown’s Tax Increase Proposal in Trouble

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California Governor Jerry Brown addressing the California Democratic Party in San Diego last month

Jerry Brown’s tax increase measure for the November ballot is not polling well.

Even though most Californians think the budget remains a big problem, just a slim majority of likely voters say they support Gov. Jerry Brown’s proposed tax initiative for the November ballot, according to a survey released Wednesday by the Public Policy Institute of California.

Using the Democratic governor’s ballot title and summary for the first time, the poll found 52 percent of likely voters support temporarily raising the state sales tax and income tax on high-wage earners while 40 percent oppose doing so. Another 8 percent said they are undecided. That’s a drop from past surveys, which found majority support for his plan to temporarily raise taxes. PPIC found Brown’s proposal had 68 percent support in January, before the ballot language was finished.

Brown estimated that California faces a $9.2 billion deficit in the 2012-2013 fiscal year, which begins July 1, and has called for closing that shortfall with a near equal balance of spending cuts and the temporary tax increases he wants voters to approve in November. Most of the additional revenue from his tax initiative would go to K-12 education.

“A slim majority support Gov. Brown’s proposed tax initiative,” said Mark Baldassare, president and CEO of the Public Policy Institute. “Of those who plan to vote against it, most also say that their local governments have been affected a lot by recent state budget cuts and they would prefer to deal with the gap mainly through spending cuts.”

As I have said before, many of my friends in the Democratic stronghold of Los Angeles County feel the State of California must manage their tax money better and are leery of ANY tax increases. They say that all POLS claim an increase in taxes is temporary and then never repealed.

Also, the California economy is not well and people simply just don’t have the money to be spent on prisons and social welfare programs.

In many ways, California taxpayers are tired of being lied to and are tapped out. There is tax increase fatigue.

Brown’s measure may eek out a small victory in November, but with President Obama easily winning the popular vote some likely voters for this measure may never make it to the polls to vote.

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Feb 24 2012

California Field Poll: Millionaires Tax Out Polling Governor Jerry Brown’s Tax Increase Measure

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Today’s California Field Poll has the California Federation of Teacher’s initiative (Millionaires Tax Initiative) leading California Governor Jerry Brown’s tax measure.

Scott Lay has the summary at the Nooner.
  • CFT/Millionaires: 63% Yes, 31% No, 6% Undecided
  • Governor’s Brown’s plan: 58% Yes, 36% No, 6% Undecided
  • Munger’s tax initiative: 45% Yes, 48% No, 7% Undecided

The California Field Poll is here (PDF).

While Gazillionaire Molly Munger is also pushing a tax increase ballot measure, it is at the bottom of the totem poll. But, she has pushed some more campaign cash towards qualifying her initiative – some $750,000.

Frankly, I hope all are funded and qualify for the ballot.

Let the teacher’s unions and other leftist causes, including public employee unions thoroughly confuse the California voters enough that all three measures fail. This will be the best scenario for the California economy anyway.

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Feb 22 2012

California Poll Watch: Rival Tax Increase Measures Blocking Jerry Brown

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California Governor Jerry Brown speaks during the California Democrats State Convention Saturday, Feb. 11, 2012, in San Diego

Yeah, those rival two tax increases have thrown a monkey wrench into the California Governor’s plans, a new poll shows.

Gov. Jerry Brown’s political aides on Wednesday continued a public campaign to convince rival tax proponents to back off, releasing a poll summary that showed that none of three proposed ballot measures will pass if they’re all before voters in November.

Both Brown’s temporary tax hike — a half-cent rise in the sales tax coupled with increased levies on higher earners — and a proposed tax increase on millionaires sponsored by some unions score more than 50% on the poll. Brown’s measure is at 53% while the millionaire’s tax polls at 55%, according to a statement from Sacramento-based pollster Jim Moore.

The third proposed tax hike, an across-the-board income tax hike to fund public education pushed by civil rights attorney Molly Munger, lags with only 31% support.

But if all three appear on the ballot, the release states, none cross the 50% threshold. Brown’s wins 43% support, the millionaire’s tax 42% and the income tax 17%.

The survey of 500 registered California voters has a margin of error of 4.5 percentage points.

I have talked to many Democratic friends down in Los Angeles County and they are not voting for ANY tax increases.

Brown’s proposal is likely to fail anyway since after former California Governor Arnold Schwarzenegger’s many promises that increased or new taxes were temporary, they never seem to be.

By the way, I saw Arnold walking in Santa Monica on Sunday morning. I said good morning and he grumbled back the same.

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