CALIFORNIA: Budget package stalls one vote shy

Sacramento Bee ^ | 2/15/9 | Kevin Yamamura, Steve Wiegand and Jim Sanders

[So Cal Rocket]

So the California Income Tax has been raised 5% for everybody?

If you mean that the tax rates have increased by 5% (eg., the 9.3% tax rate is now 9.765%) then the answer is yes. If you mean the tax rate is 5% higher than it was (eg., the 9.3% tax rate is now 14.3%) the answer is no.

It's calculated in for this year, or is it retroactive to 2008?

It's a "one-time" surcharge on 2009 taxes only. But we all know what happens with "temporary" taxes, don't we?

If they owe us money for 2008, will they pay interest on the IOU?

No.

Can we have our employers stop taking out CA state tax until the IOU is fulfilled?

Sort of. The strategy I'm using is that if the state owes me a refund for 2008, I'm going to apply it towards my 2009 taxes, rather than getting a refund (IOU). Then I'm going to lower my withhold on my paycheck until I've recovered what I was owed in a refund. Once I've "broken even", I'll change the withhold back to where I started.

[calcowgirl]

It lasts more than a year:

http://www.assembly.ca.gov/acs/Committee/C4/AsmBudgetFloorReport2008-09.doc

• $3.3 billion from a 5 percent surtax on Personal Income Tax liabilities, effective starting in tax year 2009. This surcharge would apply through tax year 2012 if the voters approve the proposed Budget Stabilization constitutional amendment. If the voters reject the amendment, the surcharge will expire two years sooner—applying only to tax years 2009 and 2010. Furthermore, if the federal revenue trigger is activated, the surcharge rate will be cut in half (to 2.5 percent).

[dalereed]

The way it was in our paper this morning was that if you owed 1 cent when you filed your tax return you had to pay a 5% penalty on the total amount of your tax.

What you paid in witholding or estimated doesn’t count.

[So Cal Rocket]

Thanks for the correction.

[calcowgirl]

Are you referring to the SDUT article that said “Taxpayers who owe money to the state at the end of 2009 would pay a one-time, 5 percent income tax surcharge, although it would drop to 2.5 percent if California gets its expected share of money from the federal stimulus bill. “

IMO, that is a bit misleading. The fact is, it doesn’t matter if you owe more at time of filing, or if you are due a refund. If you had taxable income, you’ll be subject to the 5% surtax.

I haven’t seen the actual words in the legislation, but that is the only way they could possibly come up with a $3.3 billion dollar estimate of increased revenues.

[calcowgirl]

No problem! Trying to follow the bouncing ball is a challenge, to say the least.

[ArmstedFragg]

Senate feed’s working for me now, maybe because the Assembly’s in recess.

[calcowgirl]

Below is the section of the Assy Report on increased Taxes, as of yesterday morning.

Summary of Revenue Solutions (Savings Over the 17-month Period)

The budget package includes $14.4 billion in temporary General Fund tax increases.

These taxes result in the follow savings over the 17-month period:

• $5.8 billion from a 1 cent increase to the State Sales and Use Tax, effective April 1, 2009 ($1.2 billion in 2008-09 and $4.6 billion in 2009-10). This tax increase is temporary and will sunset on June 30, 2012 if the voters approve the proposed Budget Stabilization constitutional amendment. If the voters reject the amendment, the rate increase will expire one year sooner, on June 30, 2011.

• $3.3 billion from a 5 percent surtax on Personal Income Tax liabilities, effective starting in tax year 2009. This surcharge would apply through tax year 2012 if the voters approve the proposed Budget Stabilization constitutional amendment. If the voters reject the amendment, the surcharge will expire two years sooner—applying only to tax years 2009 and 2010. Furthermore, if the federal revenue trigger is activated, the surcharge rate will be cut in half (to 2.5 percent).

• $1.4 billion from reducing the dependent credit allowed against the Personal Income Tax to the amount of the personal credit beginning in the 2009 tax year. The dependent credit reduction would apply through tax year 2012 if the voters approve the proposed Budget Stabilization constitutional amendment. If the voters reject the amendment, the dependent credit reduction will expire two years sooner, applying only to tax years 2009 and 2010. The personal credit applies to the taxpayer (and spouse), while the dependent may be claimed for children and other dependents. For 2008, the personal credit was $99 and the dependent credit was $309.

• $1.7 billion from increasing the Vehicle License Fee (VLF) from the current rate of 0.65 percent to 1.15 percent, except for heavy vehicles. Revenue from the portion of the increase to 1 percent will be retained by the General Fund ($121 million in 2008-09 and $1.2 billion in 2009-10) and revenue from the additional increase of 0.15 percent will be transferred to a new special account dedicated to funding local public safety programs ($82 million in 2008-09 and $502 million in 2009-10). The VLF rate increase will become effective for registrations beginning May 19, 2009 and expire June 30, 2013 if the voters approve the proposed Budget Stabilization constitutional amendment. If the voters reject the amendment, the rate increase will expire two years sooner—June 30, 2011. The 0.15 percent rate component dedicated to local public safety would end earlier if the funds are spent for any other purpose.

• $2.1 billion from a 12-cent per gallon increase in the excise tax on gasoline and diesel motor fuel, effective April 1, 2009. Of this amount, $250 million in 2008-09 and $1.8 billion in 2009-10 will offset General Fund debt service costs for transportation bonds. The fuel tax increase will expire June 30, 2013 if the voters approve the proposed Budget Stabilization constitutional amendment. If the voters reject the amendment, the increase expires two years sooner—on June 30, 2011.

[calcowgirl]

Cool! It’s working for me too. Thanks for the heads up.

Cogdill “Aye”, Cox “Aye”, Hollingsworth “Aye”, Runner “Aye” Strickland “Aye”...

What are they voting on? LOL. Hopefully NOT taxes.

[Drago]

State Senator Cogdill:
Capitol Office
Phone: (916) 651-4014
Fax: (916) 327-3523

Fresno Office
Phone: (559) 253-7122
Fax: (559) 253-7127

Ripon Office
Phone: (209) 599-8540
Fax: (209) 599-8547

Senator Roy Ashburn (Bakersfield area):
Capitol Office
Phone: (916) 651-4018
Fax: (916) 322-3304

Bakersfield Office
Phone: (661) 323-0443
Fax: (661) 323-0446

Assembly GOP Leader Mike Villines:
Fresno Office
(559) 446-2029
(559) 446-2028 fax

State Capitol
(916) 319-2029
(916) 319-2129 fax

---

Senator Cogdill has people working today (Sunday) in his Sacramento office...feel free to call, I did!! I plan on calling Villines’ Sacto. office next.

[Syncro]

Oops, they caught us watching and went into recess!

I think they are all headed to the monkey bars.

[ArmstedFragg]

Figures... we get it sorta working and they take a recess for an hour.

[calcowgirl]

They’re like cockroaches. When the light is upon them, they scatter. ;-)

[ArmstedFragg]

Must be another one of inter generational things. In my grade-school days we called them “jungle gyms”. Probably considered offensive now.

Unless you mean a certain interestingly decorated retail dispenser of on-sale alcohol beverages...

[dalereed]

I totally disagree!

[Syncro]

Monkey bars, Jungle Gym, sorta the same thing.

Favorite playground equipment of Present Obama The Chimp.

Disclaimer: democrats and liberals designated “Chimp” as the title for American Presidents.

[calcowgirl]

Thanks Drago.

Best add Dave Cox to the list. The lefties are out in force attempting to weaken the man. We should all call and give him our thanks and support.

Even the SacBee is directly recruiting folks to call him and urge him to be a turncoat.

http://www.sacbee.com/1095/story/1627268.html

Online Editorial: Call Sen. Cox and urge him to be a hero
Fair Oaks senator’s vote could save state from fiscal meltdown

Sunday, Feb. 15, 2009

As implausible as it may sound, a single vote by state Sen. Dave Cox, R-Fair Oaks, could determine if the Legislature saves California from going over a financial cliff.

Up until a day ago, Cox seemed grudgingly supportive of a budget deal ...

Cox needs to hear from his own constituents. If you live in the first Senate District - which includes Alpine, Amador, Calaveras, El Dorado, Lassen, Modoc, Mono, Plumas, Sierra and parts of Nevada, Placer and Sacramento counties - we urge you to call Cox’ senate office (916-651-4001) immediately. Urge him to seek a reasonable resolution of the budget crisis, and not shy away from making the tough, but necessary, choices.

[calcowgirl]

I’m not sure what your disagreement is based on. I’m looking at the numbers, and there is no way they can work if the tax is to be assessed only on any underpayment amount. That could never generate an additional 3.3 billion in revenue.

I believe the wording of the news articles, stating “end of year”, is simply referring to when the additional 5% is due and payable (as opposed to it being spread over the year.)

Time will tell. The actual bills should be available for viewing early next week on LegInfo.

[Mojave]

But when it comes to actual solutions for California, and what we can do about it, there are things to discuss. And electing liberal "Republicans" to office is no solution.

But [insert boogie man's name here] would be worse! Just because!!

[calcowgirl]

FYI, See page 30-31:
Personal Income Tax Surcharge

http://www.lao.ca.gov/2009/tax/revenues_0209/revenues_020609.pdf