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Gov. Arnold Schwarzenegger today denounced Proposition 25, which would lower the legislative vote margin for state budgets from two-thirds to a simple majority, and declared that it's a back-door attempt to make it easier to raise taxes. Schwarzenegger,speaking to a business group in Goleta, responded "absolutely no" when asked about his position on the measure, placed on the ballot by Democrats and unions, and then added, "I believe this is also...a majority vote for tax increases."

In an era of term limits, Senate President Pro Tem Darrell Steinberg is now the veteran budget negotiator among the four legislative leaders. Besides the concerns of the Senate Democratic caucus he leads, Steinberg must also consider impacts on state workers who live in his district.The Sacramento Democrat spoke with three reporters on a variety of issues last week after touring a middle school and job-training facility in North Sacramento. What follows is part of the conversation on pensions and the Democratic proposal to raise income and vehicle taxes in exchange for decreasing sales taxes. >Gov. Arnold Schwarzenegger says pension...

California still faces a $19.1 billion deficit. The budget is over a month late, no negotiated compromise is in sight, and worst of all, no serious minds in Sacramento are even considering long-term solutions. What we usually get instead are short-term gimmicks, the most recent one now has been presented as part of the Democratic proposal to balance the budget. Darrell Steinberg, Democrat and Senate President Pro Tempore (leader), is suggesting a tax shift. His proposal cuts the state sales tax rate by 1.75% and raises income tax rates and car license fees to offset the sales tax reduction. This...

"A year-old program granting movie studios tax breaks for filming in California has saved jobs and should yield two billion dollars in direct spending, Governor Arnold Schwarzenegger said. In a statement released Friday, the governor said the program was "creating and retaining tens of thousands of jobs and generating spending in California." "This is exactly why I fought so hard for tax credits in last year's budget," Schwarzenegger said. "Just the first two years of this incentive will generate two billion dollars in direct spending, with even more to come."

LOS ANGELES (AFP) – A year-old program granting movie studios tax breaks for filming in California has saved jobs and should yield two billion dollars in direct spending, Governor Arnold Schwarzenegger said. In a statement released Friday, the governor said the program was "creating and retaining tens of thousands of jobs and generating spending in California." "This is exactly why I fought so hard for tax credits in last year's budget," Schwarzenegger said. "Just the first two years of this incentive will generate two billion dollars in direct spending, with even more to come." The program, passed last year, allows...

When California faced a major budget crisis in the early 1990s, thanks to what was then the worst recession since the Great Depression, a Republican governor – Pete Wilson – and the Legislature enacted a big, albeit temporary, increase in state taxes. Despite the boost in sales and income taxes, however, state revenue continued to decline as the recession deepened, touching off years of political debate over causes and effects. Those on the right contended that by increasing taxes, Wilson and the Legislature depressed economic activity, thus causing a further decline in revenue. Those on the left argued that if...

In 2004, Gov. Arnold Schwarzenegger barnstormed around the state for Proposition 58, using an oversized credit card as a prop and vowing that it was time for the state to "tear up its credit card." Now Attorney General Jerry Brown has concluded that Assembly Democrats' plan to borrow billions to help ease the state's $19.1 billion deficit could be deemed illegal under that ballot measure if challenged in court. "We conclude that a court could reasonably determine that the proposed transaction violates Proposition 58," the attorney general's office said in a letter to Schwarzenegger's legal affairs secretary. Assembly Speaker John...

Half of California voters believe the state should close its $19.9 billion deficit mostly or entirely through spending cuts rather than tax increases, according to a Field Poll released Tuesday. That compares with 29 percent who said the state should use an equal mix of spending cuts and tax increases, or 13 percent who prefer balancing the budget solely or mostly with tax hikes. Field Poll Director Mark DiCamillo said that with the economy still in recovery and the state having passed tax hikes last year, "tax increases are just not that popular a notion right now." "You're asking people...

Leadership: Alaska's ex-governor asks a question we'd like answered: Why is California's current governor pushing the same policies in Copenhagen that helped drive his state into record deficits and unemployment? The movie series that made Arnold Schwarzenegger a household name involved cyborgs traveling through time to alternately try to destroy or save one John Connor, who would grow up to be the leader of the resistance against a race of machines that ruled the planet. Prominent in the series was his tough cookie of a mom, Sarah Connor. Another Sarah has taken the lead in another resistance against another group...

On Nov. 1, the government of the state of California began withholding from workers' paychecks 10 percent more than what it had been withholding. The Los Angeles Times described this move -- prompted by California's fiscal calamity -- as "a forced, interest-free loan" from taxpayers to the government. The Times explained to its California readers that "You'll be repaid any extra withholding in April. Those who would receive a refund anyway will receive a larger one, and those who owe taxes will owe less." The ostensible purpose of withholding is to better ensure that taxpayers actually pay the taxes they...

Reporting from Los Angeles and Sacramento - Starting Sunday, cash-strapped California will dig deeper into the pocketbooks of wage earners -- holding back 10% more than it already does in state income taxes just as the biggest shopping season of the year kicks into gear. Technically, it's not a tax increase, even though it may feel like one when your next paycheck arrives. As part of a bundle of budget patches adopted in the summer, the state is taking more money now in withholding, even though workers' annual tax bills won't change. Think of it as a forced, interest-free loan:...

As the end of California’s fiscal year approaches, the Governor and state legislators confront a $24 billion deficit. While Republicans and Democrats wrangle over how to address the gaping shortfall, some members of the press have started to look for a scapegoat for the fiscal train wreck. Many have blamed the California taxpayer’s only protection: Prop. 13, the 1978 measure capping state property taxes at 1% of a home’s assessed value. Perhaps the most egregious example of the finger-pointing is a recent piece from TIME’s Kevin O’Leary, moaning that “Before Prop 13, in the 1950s and '60s, California was a...

As the end of California’s fiscal year approaches, the Governor and state legislators confront a $24 billion deficit. While Republicans and Democrats wrangle over how to address the gaping shortfall, some members of the press have started to look for a scapegoat for the fiscal train wreck. Many have blamed the California taxpayer’s only protection: Prop. 13, the 1978 measure capping state property taxes at 1% of a home’s assessed value. Perhaps the most egregious example of the finger-pointing is a recent piece from TIME’s Kevin O’Leary, moaning that “Before Prop 13, in the 1950s and '60s, California was a...

Democratic legislators trotted out a stick-and-carrot approach to closing the state's budget gap Sunday night, negotiating with the governor on one floor of the Capitol while voting for a package of cuts and taxes on another. Majority Democrats in the Assembly were voting late Sunday on a $23.4 billion package of spending cuts, tax and fee increases, and accounting tricks designed to close a gaping hole in the budget for the fiscal year that starts Wednesday. Unlike last week's efforts, when at least some Republican votes were needed to pass the bills so they could take effect immediately, Sunday's package...

About this time every year, as the Legislature and governor wrestle over how to pass the state budget, somewhere, somebody blames Sacramento's stalemate - and the state of the California's mediocre schools and crumbling roads - on Proposition 13. The wail usually echoes unanswered for a simple reason: Thirty-one years after California voters overwhelmingly passed the law that fixed the rate of property tax increases and required a two-thirds majority of the Legislature to raise taxes and approve state budgets, polls show that Prop. 13 is as popular as ever.But this year, with California and the nation in the throes...

In a controversial simple-majority vote Sunday night, the state Assembly approved raising taxes on oil production and tobacco products as part of a Democratic budget proposal that closes most of the $24.3 billion budget shortfall through June 2010. But the plan met immediate resistance when a spokesman for Gov. Arnold Schwarzenegger vowed that the Republican would veto such an end run around GOP lawmakers. Bills containing new taxes normally require a two-thirds majority to be enacted. "He will veto any majority-vote budget fix," said Schwarzenegger spokesman Aaron McLear. "I think this shows that the Legislature is not yet serious about...

California State Assembly Speaker Karen Bass, a Democrat, did an interview with the LA Times. Thought you may enjoy her response to the following question: How do you think conservative talk radio has affected the Legislature's work? Bass' response: The Republicans were essentially threatened and terrorized against voting for revenue. Now [some] are facing recalls. They operate under a terrorist threat: "You vote for revenue and your career is over." I don't know why we allow that kind of terrorism to exist. I guess it's about free speech, but it's extremely unfair. Now that's a first. I know that politicians...

California cities will sue the state if its new fiscal budget includes "stealing" local gas tax funds, leaders for the League of California Cities warned today. "Our intention is to be prepared to file a lawsuit the day after the budget is signed," Chris McKenzie, the league's executive director, said at a news conference in the Sacramento Convention Center. "The (state) Constitution and statutes have never authorized the state to steal gas tax funds."

SACRAMENTO – More budget gridlock appears on the way as legislative Democrats say they'll push for a tax increase and the governor says he'll veto it. For weeks, Democrats crafted a response to Gov. Arnold Schwarzenegger's proposal to balance a $24.3 billion budget deficit. Democrats don't like the governor's plan to close more than 200 state parks and eliminate core welfare programs such as CalWORKS and Healthy Families. Instead, the Democrats who control the State Legislature have proposed dialing back the governor's suggested cuts and replacing the lost savings with taxes on oil and tobacco as well as surcharges on...

Here’s how the Cal Chamber of Commerce pencils out the increased costs to businesses:* $2.5 billion by requiring businesses to pay 20% strict liability penalty on top of existing penalties for underestimating  tax liabilities of $1 million+.  The extra penalty went into effect June 1. Businesses will tend to overpay their taxes giving the state an interest-free loan with no deadline for refunds. * $2.4 billion for additional sales and use taxes because of the 1-cent hike starting April 1. Businesses pay 40% of sales taxes, the chamber says. * $2.3 billion because of a requirement that  instead of paying...

SACRAMENTO — In a bid to avoid mass closures of state parks, Assembly Democrats on Monday offered a financial trade-off: Pay an additional $15 to register your car, and in return, the state will waive vehicle entry fees at all state parks for anyone with a California license plate. The proposal, outlined by Assembly Speaker Karen Bass, D-Los Angeles, is part of a sweeping budget plan Democrats aim to unveil this week and vote on as early as next week. ... But Bass said the majority party would also push for at least a handful of tax increases. In addition...

Tobacco and oil severance taxes are key elements of a revenue-raising package that will be unveiled today by Assembly Democrats. The package is scheduled to be discussed this afternoon in the Legislature's joint budget conference committee. The goal is to increase revenues by several billion to help bridge the state's projected $24 billion budget gap. Noreen Evans, chairwoman of the joint conference committee, said the goal is to pass some or all of the revenue-raising proposals. "The problem is that this economic crisis was caused by an enormous and rapid drop in revenues, so to ignore the need for new...

It's the Holy Grail of reformers and politicians, a seemingly oxymoronic two-word phrase that prompts cynics to sneer and fans the faint hopes of taxpayers: "Government efficiency." From the outset of his administration in fall 2003, Gov. Arnold Schwarzenegger's rhetorical arsenal has consistently featured calls for making California's government leaner, more responsive and more citizen-friendly. ...California's tax collection system has evolved as the state has added taxes to its revenue base.... An amendment in the 1879 state constitution created the Board of Equalization (BOE). Its four elected members (plus the state controller) were charged with "equalizing" property assessments. In the...

In covering California’s endless budget woes, the media are always quick to trot out tired clichés about the Golden State’s being ungovernable because its clueless residents want costly programs but balk at paying the taxes needed to cover them. Over the past month, writers for the New York Times have weighed in five times with veiled or direct condemnations of California’s constitutional requirement that tax increases be approved by two-thirds of state legislators. In a May 25 column, Paul Krugman endorsed this conventional wisdom and added a pot shot at the landmark 1978 California ballot initiative that capped the rate...

Could the flat tax come to California? Gov. Arnold Schwarzenegger said today that he would like to see such “radical” proposals come out of a commission now studying an overhaul of the state’s tax system. The governor told the editorial board of the Sacramento Bee that he hoped the commission would not be afraid to propose something like “a 15% straight tax.” “That’s the kind of radical, daring kind of a proposal that I want to see on the table so we can look at it and say, ‘Oh, let’s study this, maybe that is the way to go,’ ”...

To understand why the woes of California's economy threaten the nation's, we must understand the state's road to insolvency. The Age of Reagan did not commence with the Great Communicator's inauguration in 1981. For its real beginning, we need to go back to June 1978, when Californians went to the polls and enacted Proposition 13. By passing Howard Jarvis' malign initiative, California voters reduced the Golden State to baser metal. Under Republican Gov. Earl Warren and Democratic Gov. Pat Brown, California epitomized the postwar American dream. Its public schools, from kindergarten through Berkeley and UCLA, were the nation's finest; its...

The state's perpetual budget crisis and voters' rejection of five budget-related ballot measures last week have renewed the perennial debate over whether Californians are, to borrow a comparison from "The Three Bears," taxed too much, too little or just about right.Much of the positioning is ideological, and therefore immune to being affected by data and fact.Any level of taxation is too high to those on the political right, and no level is sufficient to those on the left. But for those who are less ideologically rigid, relative tax burden is significant because it shows where we stand vis-à-vis other states...

SAN FRANCISCO -- California Gov. Arnold Schwarzenegger, in his efforts to find funds to balance the state budget, has proposed borrowing $2 billion from municipal governments over the next fiscal year, a tactic that is rankling local officials up and down the state. Mr. Schwarzenegger is invoking a 2004 law that lets the state demand loans of 8% of property-tax revenue from cities, counties and special districts. Under the law, the state must repay the municipalities with interest within three years.

He promised to make it work by cutting 'waste, fraud and abuse.' It was never that easy. The real solutions are obvious, though. One: Eliminate, or at least loosen substantially, the two-thirds legislative requirement to pass a budget or raise taxes. This rule has allowed a tiny Republican minority to hold up all budget progress. Two: Remove legislative term limits. Three is the Big One: Revise Proposition 13. Prop. 13 is often described as a tax-cutting measure, but that scarcely does justice to the damage it has caused.

SACRAMENTO – Call it overhead. The state Air Resources Board plans to collect more fees from industries responsible for large amounts of greenhouse gases to recoup the administrative costs of implementing California's landmark climate change law. The proposed $50 million in annual assessments would nick Californians for about $1.50 a year after the costs are passed down, regulators estimate. The climate change program has been partly living on borrowed money for some time, tapping various state accounts to pay for 155 positions within the air board and for about 20 others assigned to different agencies. The additional staff, which includes...

Nancy Pelosi is watching California's Prop 1A intently. In only a hundred days and change, President Barack Obama has committed $6.5 trillion to waste, fraud, and abuse. That’s $6,500,000,000,000.00, which is more than all the costs of World War I and World War II combined. And you think it can’t get worse? Believe me, it can. Things have gotten so bad, that even in my home state of California a Republican Governor, Arnold Schwarzenegger, is urging support for a massive $16 billion tax hike which is deceptively masquerading as a measure to put a lid on out-of-control government spending. You...

Gov. Arnold Schwarzenegger painted a bleak picture today of what’s to come should budget-related state ballot measures fail next week. Fire stations will close, prisons will be forced to release inmates, schools will lay off more than 50,000 teachers, schools will be shut down for several weeks, and the state will have to borrow from local governments, Schwarzenegger warned.

The 'Plan B' scenarios if the special election measures are defeated continue to trickle out of the administration of Governor Arnold Schwarzenegger. This afternoon, a new one: the governor is prepared to propose a $2 billion suspension of the 2004 constitutional initiative protecting city and county revenues. Talk of suspending 2004's Proposition 1A comes on the heels of a meeting yesterday where Schwarzenegger aides told the firefighting community that voters rejecting the measures on the ballot in two weeks time would result in as many as 1,700 firefighting positions. One local government official on this afternoon's call said the plan...

"Unintended Consequences" would be the appropriate title for any history of California's fiscal politics in the latter half of the 20th century and the first decade of the 21st. Repeatedly, voters and those they elect to office have adopted policies that conflict with or even contradict previous decrees – and when those conflicts cannot be resolved, our response is often to add still another layer of mandates. The effect of that irrationality is a government finance system that simply cannot work, manifesting itself in perpetual fiscal crisis as politicians try, and fail, to reconcile competing priorities. A Sacramento judge's decision...

California collected just $7.34 billion in personal income tax payments in April, putting further stress on the state's budget. The state controller's office said the collections in April were down from $13 billion a year earlier. About a quarter of all income tax revenue is collected in April, the agency said. In addition, the dismal April means the state is falling behind the revenue forecasts incorporated into the budget deal adopted by the Legislature in February.

The state's perpetual budget crisis and the appointment of a commission to recommend changes in the state-local tax system have re-ignited a debate over property taxes that seemingly ended 31 years ago with passage of Proposition 13. The landmark 1978 measure imposed a tight limit on property taxes, which previously had been the chief support for schools and local governments, and had the indirect effect of shifting much of that burden, especially for education, to the state. Loosening Proposition 13 in some fashion would provide more money for local services and schools, ease the burden on the state and thus...

PRESIDENT OBAMA’S PROPOSED FEDERAL SPENDING WILL TOP $4 TRILLION this year, about 29 percent of GDP-exceeded only by spending during World War II. Then there are the Administration’s plans to add $1.9 trillion in new taxes. This heady sum can hardly come from just the so-called rich as he claims. In addition, the cap-and-trade carbon tax will demand another $648 billion and will hit anyone who consumes energy, which means everyone. The President tells us that the higher taxes and enormous public spending are necessary to pay for recovery and deficit reduction. One needn’t look too far to see how...

Gov. Arnold Schwarzenegger is selling access to a pair of social soirees at his Brentwood mansion to deep-pocketed political donors willing to hand over at least $100,000 for his political fund.Donors who cut six-figure checks will be able to sip cocktails with the celebrity governor and first lady Maria Shriver at their Southern California home this Thursday and dine again there early next month, according to the four-page fundraising invitation obtained by The Bee.The events represent the kind of access to the state's chief executive that makes government watchdogs wary. "These sums may be a small price (for donors) to...

I'll be posting pictures, as I receive them.

AN OPEN LETTER TO GERALD PARSKY, CHAIRMAN, CALIFORNIA COMMISSION ON THE 21ST CENTURY ECONOMY - SPLIT COMMERCIAL/RESIDENTIAL PROPERTY TAX ROLL UNDER PROPOSITION 13 April 13, 2009 The Honorable Gerald Parsky, Chairman Commission on the 21st Century Economy C/O Mark Ibele, PhD, Staff Director http://www.cotce.ca.gov/ Re: California Prop 13 Split Property Tax Roll Dear Chairman Parsky: I read with consternation that the Commission for the 21st Century has convened with the apparent agenda to undo the protections of Proposition 13 for commercial properties in California - http://www.venturacountystar.com/news/2009/apr/09/tax-panel-promises-to-think-boldly/ A split commercial/residential property tax roll would spell personal and financial ruination for me...

AN OPEN LETTER TO GERALD PARSKY, CHAIRMAN, CALIFORNIA COMMISSION ON THE 21ST CENTURY ECONOMY April 13, 2009 The Honorable Gerald Parsky, Chairman Commission on the 21st Century Economy C/O Mark Ibele, PhD, Staff Director http://www.cotce.ca.gov/ Re: Split Property Tax Roll – State of California Dear Chairman Parsky: I read with consternation that the Commission for the 21st Century has convened with the apparent agenda to undo the protections of Proposition 13 for commercial properties in California - http://www.venturacountystar.com/news/2009/apr/09/tax-panel-promises-to-think-boldly/ A split commercial/residential property tax roll would spell personal and financial ruination for me and many other small commercial property owners across...

DAVIS — The commission charged with recommending an overhaul of California’s tax system cautiously placed a toe on the third rail of state politics on Thursday, opening discussion of possible changes in property taxes and Proposition 13. “This commission does not just want to discuss easy issues. We’re going to discuss the property tax,” said Gerald Parsky, chairman of the Commission on the 21st Century Economy. The panel, created by Gov. Arnold Schwarzenegger and legislative leaders, has been asked to recommend changes in state tax policy in order to stabilize government revenues and align the tax system in an economy...

The California Teachers Association has deposited another $2.2 million into the campaign to pass Propositions 1A and 1B, bringing the group's total spending to nearly $5 million.

It seemed appropriate that a panel examining ways to overhaul the state's tax structure met Thursday in the academic confines of UC Davis rather than the politically charged Capitol. The discussion focused on the theoretical, from examining the merits of a flat income tax to considering a "split-roll" property tax system that treats commercial businesses differently from homeowners. The daylong meeting occurred largely in a political vacuum, for now ignoring the difficulty of getting such ideas through a divided state Legislature where special interests hold great sway. But Chairman Gerald Parsky said the state's current fiscal woes may allow for...

LOS ANGELES (Reuters) - Taking inspiration from a landmark 1970s tax revolt, a determined group of activists say the moment is right for another voter uprising in California, where recession-battered residents have been hit with the highest income and sales tax rates in the nation. And like Proposition 13, the 1978 ballot measure that transformed the state's political landscape and ignited tax-reform movements nationwide, they see the next backlash coming not from either major political party, but from the people. If the anti-tax crusaders can galvanize voter discontent, they hope to roll back the latest tax hikes, impose permanent, iron-clad...

As state budgeters look toward another multi-billion dollar budget deficit this summer, attorneys for the Legislature and Gov. Schwarzenegger have issued a new opinion reaffirming the legality of a plan passed by Democrats last December that raised revenues without requiring a two-thirds vote. The March 9 opinion from Legislative Counsel Diane Boyer-Vine, addressed to Gov. Schwarzenegger, reaffirms a 2003 opinion by her office that finds a bill that raises one tax and lowers another by an equal or greater amount only needs simple majority votes in each legislative house. “We think that a tax bill is not subject to the...

When they plugged California's $42 billion budget hole last month, Gov. Arnold Schwarzenegger and legislative leaders said everyone had to give up something to repair the state's finances. That sentiment did not extend to California businesses and corporations with significant operations in the state. All the tax hikes in the two-year budget plan _ a boost in the sales tax that took effect Wednesday and increases in the personal income tax and vehicle license fee _ fall squarely on the shoulders of working Californians.

California's Republican Gov. Arnold Schwarzenegger has generally declined to discuss his future after term limits end his tensure in the state Capitoln January, 2011. ... Schwarzenegger, a Republican who's been discussed as a potential opponent next year for Democrat U.S. Sen. Barbara Boxer said he's “not running for anything.” ... “Now I raised taxes, but I’m not running for anything,” Schwarzenegger said. “So I’m more comfortable with it because I’m not running for anything, because I know it’s the right thing. Even though I promised the people of California I’m not going to raise taxes, at the same time I...

(snip) The day the Legislature approved the budget package, California Republican Party Chairman Ron Nehring released a statement saying: “We vigorously oppose any increase in taxes. ... ” So why is the California Republican Party contributing money to support the tax increases? You read that right: Republican campaign dollars (as first reported by Red County) are going to support Budget Reform Now, the campaign for Propositions 1A, 1B, 1C, 1D, 1E and 1F, the measures on the May 19 special election ballot that were part of the budget package. Prop. 1A, which implements a state spending cap, is directly tied...

When California's voters slashed property taxes by passing Proposition 13 in 1978, cash-strapped local governments began looking for new ways to finance their operations. City governments developed especially creative – and sometimes too creative – ways of generating cash, including recruiting, often with lavish subsidies, major generators of sales taxes such as big-box retailers and auto malls. The problem with that strategy is that it was, and is, much like a dog chasing its tail, producing a flurry of activity but ultimately falling short of fulfilling city officials' hopes. A given level of personal income and consumer confidence will generate...