PolitiCal

On politics in the Golden State

Category: taxpayers

Jerry Brown predicts California budget surplus by end of next year

California Governor Jerry Brown at a press conference Wednesday. Credit: Robert Gauthier / Los Angeles Times

After years of red ink, Gov. Jerry Brown said on Thursday that California’s $96.7-billion general fund is now poised to end next year with a surplus, thanks to years of deep budget cuts and billions in new taxes approved by voters last year.

Gov. Jerry Brown's proposed California budget, 2013-14

"We achieved the position we're in because of tough cuts ... and then the people voted for taxes," he said. "We broke the logjam by going to the people."

READ THE SUMMARY: Gov. Brown's proposed 2013-2014 budget

Schools will be the big winner in the governor's new spending plan, receiving $56.2 billion in state funds, an increase by $2.7 billion over the last year. That funding is set to jump to more than $66 billion by 2016.

The budget also dedicated an additional $350 million to the state’s public insurance program, Medi-Cal, to help implement President Obama’s healthcare law.

Brown’s budget predicts only the second budget surplus in the last decade, with an $851-million surplus projected at the end of the 2013-14 fiscal year -- if all his proposals are approved by lawmakers.

With Democrats firmly in control of both legislative houses and the governor’s office, and without what had become familiar multibillion-dollar deficits, this year’s announcement lacked the anxiety and urgency that had surrounded past budget unveilings.

Instead of railing against proposed reductions in popular programs, activists are now girding for long policy battles based on the ideas put forward by the governor on Thursday.

Those fights will play out in the Legislature over the coming months. While they include sweeping changes in how Sacramento spends its money, those skirmishes, too, will lack the drama over cuts to schools and health services that have dominated Capitol discourse for the better part of the last decade.

ALSO:

Gov. Jerry Brown details budget numbers at Capitol

California conservation chief faces grilling over fracking

Skelton: Brown correct to target federal control of prisons

-- Anthony York in Sacramento

Photo: California Governor Jerry Brown at a press conference Tuesday. Credit: Robert Gauthier / Los Angeles Times

California lawmaker proposes tax breaks for commercial space firms

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With California the focus of a growing private spaceflight industry, state Sen. Steve Knight (R-Palmdale) has proposed revising tax laws to make the state more attractive to employers.   

Knight, whose father was a test pilot, has introduced legislation to provide an exemption from  sales and use taxes for equipment or materials used to renovate or reconstruct properties used as space launch sites.

“We need to level the playing field before we irretrievably lose business to our competitors,” Knight said. “Without Senate Bill 19 we risk losing California’s vital aerospace industry to other states and countries that are more business-friendly to this and other industries.”

California’s Mojave Desert is home to several commercial space ventures that hope to offer space flights to paying customers, including  Scaled Composites and XCOR Aerospace Inc.

But Stuart Witt, chief executive of the Mojave Air & Space Port, warned in February that California risks losing aerospace firms to other states  if it doesn't become more business friendly.

In October, Gov. Jerry Brown signed another Knight bill that limited the legal liability of commercial space operators for death or injuries resulting from flights, provided that passengers have been informed of the risks and given written consent.

ALSO:

Lawmakers want to change Proposition 13

Rural counties seek bigger share of prison money

New Assembly members already eyeing seats in Senate

-- Patrick McGreevy in Sacramento

Photo:  Photographers snap pictures of WhiteKnightTwo and SpaceShipTwo outside the hangar at Mojave Air and Space Port IN 2011. Credit: Al Seib / Los Angeles Times

Clock is ticking for Gov. Brown's Prop. 30 [Google+ hangout]

Times reporter Chris Megerian will join city editor Shelby Grad at 1 p.m. for a Google+ hangout on Gov. Jerry Brown's tax initiative, Proposition 30.

A recent poll showed slipping support for the proposition, and the governor still has not settled on a central sales pitch for his tax-hike initiative, even though election day is fast approaching.

Republican leaders in the California Legislature are already planning their next steps if voters reject the measure next week.

VOTER GUIDE: 2012 California Propositions

From Times reporters Michael J. Mishak and Anthony York's weekend story on Brown's message behind Prop. 30:

On the stump, Brown emphasizes that most of the tax increases will affect only the wealthiest Californians. The campaign ads make little mention of that.

The mixed messages underscore the Democratic governor's struggle to persuade skeptical taxpayers to open their wallets and provide fodder for a well-financed opposition to plant doubt among voters. A recent USC Dornsife/Los Angeles Times poll showed support for the proposal slipping below 50% for the first time.

The shifting "creates uncertainty and makes voters head in the 'no' direction," said John Matsusaka, president of the Initiative & Referendum Institute at USC.

Californians have not approved a statewide tax increase since 2004, when they voted for a levy on those making more than $1 million to pay for expanded county mental health programs.

Brown has acknowledged the difficulty of selling new levies to voters, saying his campaign made a strategic decision not to mention the word "taxes" in its ads.

ALSO:

Authorities racing the clock to identify Arizona donors

If taxes fail, Republicans say they can help avoid cuts to schools

Proposition 30's backers and critics rally supporters in final week

Gov. Brown's Prop. 30 losing support, poll shows [Google+ Hangout]

Times reporter Chris Megerian will join city editor Shelby Grad at 10:30 a.m. for a Google+ Hangout on plunging support for Proposition 30, according to a new USC Dornsife/Los Angeles Times poll.

Gov. Jerry Brown's proposed measure would temporarily raise taxes on individuals earning more than $250,000 a year and impose a quarter-cent hike in the state sales tax. Brown has warned that billions of dollars will be cut from public schools and universities if Proposition 30 fails.

From an analysis by Megerian and the Times' Anthony York:

Support has plunged for Proposition 30, Gov. Jerry Brown's plan to raise billions of dollars in taxes, a new USC Dornsife/Los Angeles Times poll shows, with less than half of voters planning to cast ballots in favor of the measure.

Only 46% of registered voters now support Brown's initiative, a 9-point drop over the last month, and 42% oppose it. The findings follow a lackluster month of campaigning by the governor, who had spent little time on the stump and found himself fighting off attacks from backers of a separate ballot measure that would raise taxes for schools.

Although Brown recently launched a frantic push for votes, both proposals could fail. Tax measures rarely gain support in the closing days of a campaign.

Proposition 38, which would increase income taxes for most Californians to raise funds primarily for schools and early childhood education, sank 6 points in the poll and continues to lag behind Brown's. Just 28% of voters support Proposition 38, down from 34% in September.

ALSO:

Food labeling initiative draws most mentions on Twitter

Support plunges for Prop. 30, Gov. Jerry Brown's tax initiative

Two young Democrats square off over East L.A. Assembly district

Voters pick sides on Gov. Jerry Brown's tax plan

Tax poll graphic USEThe battle over Gov. Jerry Brown's proposed tax increases can be summed up by interviews with two Californians -- a 61-year-old retiree from Santa Cruz County and a 32-year-old mother of four from Riverside County.

The retiree is Tony Russomanno, who has stopped working after a successful business career. He knows Brown's plan would increase his taxes, and he's fine with that.

"It's important to give back," he said. "It's only fair."

Russomanno, a Democrat, scoffs at the warnings about rich people leaving the state if taxes go up.

“Where are they going to go? The Cayman Islands where their money is?" he said.

The mother is Tiffany Axene, who takes care of her small children and works at the family business, a health consulting company. A Republican, she won't vote for higher taxes.

“I’m just tired of seeing people who make money get taxed and taxed," she said. “It breaks my heart."

Brown's plan, listed as Proposition 30 on the ballot, would increase the sales tax by a quarter cent for four years and income taxes on the wealthy for seven years. If they don't pass, the governor said he would be forced to slash almost $6 billion in spending, with education bearing the brunt of the cuts.

The threat to public schools doesn't change Axene's opinion.

"They’re already cutting programs," she said. "What else is new?"

Russomanno and Axene were among 1,504 registered voters surveyed in a new USC Dornsife/Los Angeles Times poll, which showed Brown is holding onto shrinking support for his tax hike. Fifty-five percent said they favored the plan, down from 59% in May.

The poll also gauged how voters feel about the California Legislature, pension changes for public employees and a ballot initiative requiring special labeling for food with genetically engineered ingredients.

ALSO:

Activists launch grassroots campaign for Prop. 30

Poll shows close call for Gov. Jerry Brown's tax plan

Cal State system to hike tuition 5% if Prop. 30 fails

-- Chris Megerian in Sacramento
twitter.com/chrismegerian

Data for graph are from the September USC Dornsife/Los Angeles Times poll.

Jerry Brown calls ballot suit 'old-style politics'

Gov. Jerry Brown dismissed Molly Munger's failed lawsuit as "frivolous" on Monday and pressed forward with his own campaign for higher taxes, which will likely receive top billing on the November ballot thanks to a legislative change made during the final days of budget negotiations.

Brown's ballot initiative, which would raise the sales tax by a quarter-cent for four years and levies on the wealthy by one to three percentage points for seven years, has been under attack from the left and the right.

Munger, an attorney and liberal activist who is pushing her own tax plan, sued to prevent Brown's from getting placed higher on the ballot than hers. A judge rejected her case on Monday, but the conservative Howard Jarvis Taxpayers Assn. has discussed also filing suit.

"If they want to go to court, we'll fight them," Brown told reporters at an event in Oakland. "We beat down this one" -- referring to Munger's lawsuit -- "because it was totally frivolous and there was no justification."

He added, "It's old-style politics where you try to take $800-an-hour lawyers and try to bully people."

Brown defended the bill that Democrats pushed through the Legislature to give his tax plan top billing on the ballot.

"That is so important that it deserves the dignity of being ranked with other constitutional measures and bond issues," he said. "Not a mere statute, but a fundamental change in how the state operates."

The governor called the tax issue a "zero sum game," where voters have to choose between higher taxes or automatic cuts to education that could result in lopping three weeks off the school year.

"That case stands on its own," he said

ALSO: 

Jerry Brown's tax measure faces legal challenge

Rivals of Jerry Brown submit signatures for tax initiative

Wealthy California siblings crusade for divergent political causes

-- Chris Megerian in Oakland

 

Nonpartisan primary could put GOP tax pledge to the test

Grover Norquist
Among the fundamental facets of California politics being tested in Tuesday's nonpartisan primary is the strength of the GOP no-tax pledge.

At least five viable GOP contenders for the Assembly have refused to sign the pledge that has been sacrosanct for Golden State Republicans for decades.

The creation of more centrist districts and the end of the party primary system have given candidates — and special interests — an incentive to move toward the political middle. In several contests, the business groups that typically back the GOP have turned away from rock-ribbed conservatives, throwing their support to pledge-free Republicans.

For example, in the 74th Assembly District, business interests are backing Newport Beach City Councilwoman Leslie Daigle, who has rejected the pledge, over incumbent Assemblyman Allan Mansoor (R-Costa Mesa).

Just a few votes could change the dynamics in the Capitol. All of California's sitting GOP Assembly members and all but two Republican state senators have signed the pledge, which is issued, tallied and enforced by Washington, D.C., activist Grover Norquist and his group, Americans for Tax Reform. Republicans who violate it are targeted by a nationwide network of activists.

Gov. Jerry Brown, a Democrat, blamed Norquist and other conservative activists last year for torpedoing his negotiations with Republican lawmakers to place a budget-balancing tax increase on the ballot.

On Friday, Jon Fleischman, who calls himself the "self-appointed enforcer" of the no-tax pledge, listed a tally of non-signers on his conservative FlashReport website: 27. That list includes candidates running for Congress and the state Legislature. He wrote that the pledge has never been more important as Republicans in Sacramento face pressure to support taxes to help close the deficit.

"Unfortunately, it only takes a few, voting with all of the Democrats, to cause much mischief," Fleischman wrote.

He had a final message for non-signing Republicans as they entered the final days and hours of the primary: "Feel free to contact us with questions — and by all means if you are one of the candidates listed here and you either think you have been placed here in error, or would like to sign the pledge, just let us know."

RELATED:

Grover Norquist 'paralyzing Congress,' House Republican says

Centrist GOP candidates may offer chance to end California gridlock

Brown stymied by same budget dysfunction that plagued predecessors

--Michael J. Mishak in Sacramento

Twitter.com/mjmishak

Photo: Grover Norquist, president of Americans for Tax Reform, speaks at the Bloomberg Washington Summit in Washington, D.C., on Tuesday, May 1, 2012. Credit: Joshua Roberts/Bloomberg.

Refunds fill Californians' wallets but could drain state budget

California taxpayers had a good April -– they're getting more than $2.6 billion in income tax refunds. But that's bad news for the state’s bottom line, because accountants expected to pay out only $2 billion
California taxpayers had a good April -– they're getting more than $2.6 billion in income tax refunds.

But that's bad news for the state’s bottom line, because accountants expected to pay out only $2 billion.

The almost 30% gap, detailed in numbers from the Franchise Tax Board and Gov. Jerry Brown's Department of Finance, is exacerbating an already difficult month for California's finances.

Income taxes were 20% below expectations set by the Brown administration, and corporate taxes were about 10% below.

California has consistently paid out higher income tax refunds than expected in the current fiscal year, which ends June 30.  Refunds totaled $2.34 billion in March, 15% above projections.

H.D. Palmer, spokesman for the Department of Finance, said the state may simply be paying refunds faster than usual. That means a check that would have been sent out in May was already sent out in April.

Indeed, the nonpartisan Legislative Analyst’s Office said in a report released Tuesday that the state may issue fewer refunds in May, helping offset the jump in April.

RELATED:

S&P sounds alarm over April tax revenue

California's budget still mired in dysfunction, S&P says

What's in the envelope? Not enough tax money for California

-- Chris Megerian in Sacramento
twitter.com/@chrismegerian

Photo: Large boxes full of already opened and emptied envelopes sit at the Franchise Tax Board in Sacramento. Credit: Laura Morton / For The Times

Sherman to unveil ‘missing taxpayers’ owed refunds

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Before he won elected office, Rep. Brad Sherman was a CPA and a tax lawyer.  So the news conference he's scheduled to reveal the names of taxpayers owed millions in refunds seems right up his alley.

Sherman is fighting for his political career in an election contest this year that pits him against fellow Democratic Rep. Howard Berman for a newly drawn San Fernando Valley congressional district seat.

That may explain why he's going to publicly identify 4,176 Los Angeles County residents he says are owed more than $6.7 million in 2010 tax refunds that have gone unpaid because the IRS couldn't find them.  (Sherman's congressional staff hasn't yet explained how the boss located the taxpayers, three of whom have about $30,000 coming.)

Sherman plans to tell people how they can find out whether they are owed a refund and post the names he came up with on his website--just ahead of this year's deadline for filing federal and state tax returns.

After his  9 a.m. Saturday news conference at Pierce College in Woodland Hills, Sherman says he'll stick around a while to help  "dozens of local residents with free advice" in preparing their 2011 tax returns.

ALSO:

State senator wants school boards to have more power in abuse cases

Republican lawmakers take aim at teachers accused of sexual misconduct
 
Teachers' contracts hinder misconduct investigation in Los Angeles abuse cases

-- Jean Merl

Photo: Rep. Brad Sherman at a supermarket workers rally last fall. Credit:Al Seib/Los Angeles Times.

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