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  • Archive for the ‘Budget’ Category

    Jan 19


    Posted by Crystal Whitfield | No Comments

    The state Constitution requires the Governor to submit a budget proposal for the next fiscal each year by January 10, but this year the budget was released five days early due to someone inadvertently posting the document to the Department of Finance website.  So, the annual budget battle began with little fanfare in a hastily assembled press conference attended by Capitol reporters.

     Over the next few months this budget will be dissected, disconnected, taken-apart, reconfigured, lambasted, and in general go through the standard process.  So, we thought it only fair to start the discussion with the Governor’s own words.  In a message to the Legislature, here is how Governor Brown launched the discussion:

     When I came into office, California was facing an immediate $26.6 billion budget gap and future budget deficits of $20 billion a year.

    In January of 2011, I proposed a budget that combined deep cuts with a temporary extension of some existing taxes. It was a balanced approach that would have finally closed our budget gap. In the end, the taxes were not extended and massive cuts — totalling $16 billion — were enacted.

    The 2011 budget did, however, lay the foundation for fiscal stability. It cut the annual budget shortfall by three‑quarters — from $20 billion to $5 billion or less. It shrunk state government, reduced our borrowing costs and gave local governments more authority to make decisions.

    The budget that I am submitting today keeps the cuts made last year and adds new ones. The stark truth is that without some new taxes, damaging cuts to schools, universities, public safety and our courts will only increase.

    That is why I will ask the voters to approve a temporary tax increase on the wealthy, a modest and temporary increase in the sales tax and to guarantee that the new revenues be spent only on education. I am also asking that the voters guarantee ongoing funding for local public safety programs. This ballot measure will not solve all of our fiscal problems, but it will stop further cuts to education and public safety and halt the trend of double‑digit tuition increases.

    My budget plan also includes important reforms. It improves government efficiency and pays down debt. It reorganizes state government to make it more efficient and saves tax dollars by consolidating or eliminating functions. It restructures social service programs to better support working families. It gives substantially more flexibility and decision‑making to local school districts. The plan also calls for bold investments in our future: to assure a reliable water supply, build high speed rail and reduce greenhouse gas emissions.

    As California’s economy continues to slowly recover — and recover it will — our plan will provide fiscal stability and make California government more transparent and responsive to the people.

     I look forward to working with you in the coming year.


     Edmund G. Brown Jr.


     We hope California can get back on track and we hope to help the Governor and Legislature move in the direction of a responsible budget that will align spending with revenues, relieve burdens on the private sector that suppresses economic activity and job creation, and reform debt obligations that are unsustainable.  We look forward to the challenge and hope all of our members will be active and engaged in this fight.

    Sep 9


    Posted by Crystal Whitfield | No Comments

    As we’ve previously reported, the California State Supreme Court agreed in August to consider the petition by the League of California Cities and California Redevelopment Association seeking to overturn state budget bills AB1x 26&27. These budget bills call for the elimination of local redevelopment agencies unless the agencies agree to make a “ransom” payment to the State every year.

    The State of California’s deadline to reply is today, September 9th, and the Court has called for an expedited briefing schedule for all parties and is expected to hear oral arguments later this fall. The Court has also said it plans to rule on the merits of the case by year’s end.  For more information on the lawsuit, click here.

    Sep 2


    Posted by Crystal Whitfield | No Comments

    A last minute ploy by Amazon.com exempting it from collecting sales taxes for more than two years was met by firm opposition today from a host of California based businesses that support a level playing field for all retailers in California. 

    In exchange for a special two year “sales tax holiday,” Amazon.com offered to open six new distribution centers in California and claimed they would create thousands of jobs. As part of the recently enacted State Budget, online retailers must collect sales taxes in the same manner as traditional stores.

    A study released last year by the Taxpayer Advocate concluded that the un-level playing field created by giving out-of-state companies like Amazon a competitive advantage over California retailers was costing the state billions in lost economic activity and businesses in the state have urged policymakers to reject the deal. California retail businesses physically based in the state are losing $4.1 billion in sales in 2010 to online-only retailers, and by 2015 that number will reach $7.7 billion.

    Governor Brown seems to agree with our position, as noted in a Sacramento Bee story headlined “Jerry Brown signals thumbs down on Amazon proposal.” Click here to read the story.

    Jul 1


    Posted by Crystal Whitfield | No Comments

    In bad news, the budget “restructures” Redevelopment agencies in a way that many feel will be disastrous for local government and real estate alike.  Chris McKenzie, Executive Director, League of California Cities, said: “It is deeply regrettable that the Governor is choosing to ignore the State constitution and sign illegal legislation to eliminate redevelopment agencies. This is a smoke and mirrors budget that includes a phantom $1.7 billion in revenues from redevelopment agencies that will never materialize, ultimately triggering deeper cuts to other state programs down the line.” 

    For more information on what is happening with RDA’s and the potential lawsuit that has been threatened, visit http://protectourlocaleconomy.com/.

    Jul 1


    Posted by Crystal Whitfield | No Comments

    We applaud a significant piece of the budget the Governor signed, AB 28x, which ends special treatment for online-only retailers. This legislation helps close a loophole that until now has put thousands of California businesses at a competitive disadvantage against out-of-state, online-only retailers to avoid collecting sales taxes. 

    California’s brick and mortar-based companies have been trying to correct this unfair tax treatment for a long-time. We still hope that a national solution can be agreed upon, but in the meantime, states like California absolutely must act in this manner to protect taxpayers and job providers.

    We thank the Governor and Assemblymember Skinner and Senators Calderon and Hancock for their pragmatic leadership on this issue, and our members thank them for their dogged determination.

    Jul 1


    Posted by Crystal Whitfield | No Comments

    Brown signed the $86 billion spending plan a day before the July 1 start of the fiscal year.  The budget package is a combination of spending cuts, fee hikes and relies on higher tax collections that might never materialize. Under the plan, General Fund spending is at its lowest level since the 1972-73 fiscal year when measured as a share of the state’s economy. Cuts enacted will affect nearly every aspect of California government, from universities and state parks to in-home services.  Click here to get more information about the budget directly from Governor Brown.

    Jul 1


    Posted by Crystal Whitfield | No Comments

    Although we all wish the budget was passed on time because legislators toiling under the Gilded Dome of the Capitol were all working together for the betterment of the State.  The more likely cause is the voter’s passage of Proposition 25 last year. 

    That ballot measure deleted the 2/3’s majority vote needed to pass a budget and included a “sweetener” that docked legislative pay for not meeting the deadline.  No one in the Capitol thought that latter provision would ever actually be enforced.  However, when Governor Brown vetoed the budget originally presented to him on June 15 – the first time ever a budget had been vetoed – he emphasized the fact that it was not balanced, which set forth a chain of events that led to State Controller John Chiang withholding legislative paychecks.  Then negotiations began in earnest.

    And elimination of the 2/3’s majority vote also played a key role, in that no Republican votes were needed to pass the spending plan.  But it should be noted, that a 2/3’s vote IS still required for tax increases, so the majority party still had a difficult time coming together on a plan, because it reduced government spending much more than they would have preferred.

    Jul 1


    Posted by Crystal Whitfield | No Comments

    Let’s take a moment to celebrate the State of California passing an on time budget for the first time in what seems like forever.  Hurray.  And now for something completely different…

    Jun 24


    Posted by Crystal Whitfield | No Comments

    Just one week after Governor Brown vetoed a version of the budget sent to him by the Legislature that was deemed “unbalanced,” he has mentioned the specter of a split roll property tax as a way to balance the budget. 

    Yesterday the Governor responded to a question about efforts to change Proposition 13, which provides tax protections to both residential and commercial properties by stating that the “core of Prop. 13” is important to Californians and unlikely to be changed “anytime soon” (i.e. no changes to residential). But he said, “If the taxes are not extended, I believe there will be efforts to accelerate the reassessment of commercial property, or other efforts” (i.e. reach into your businesses pocket for more state revenue).

    This statement is clearly understood to mean that the failed budget talks could lead to an initiative fight that would not just be limited to Brown’s plans to raise sales taxes, vehicle license fees, and income taxes, but provide another opportunity for forces that have long sought to create a split roll to rear up once again.

    The Governor said he expects labor groups to pursue changes to Prop 13 that would make it easier to raise taxes on commercial properties.  Two years ago split roll initiatives were submitted to the Secretary of State, but ultimately abandoned in favor of another measure.  Those proposals, however, remain in the pipeline and could quickly start moving forward again.

    According to several recent studies, a split roll property tax would be devastating for our industry and harm the state’s prospects for economic recovery.  We hope the Governor’s comments were just “off the cuff” and not part of a more organized effort to raise your taxes in this manner.

    Jun 17


    Posted by Crystal Whitfield | No Comments

    Those of you who think the Denizens of the Capitol have lost the ability to move quickly, need only look to the budget maneuvers this week to see they still have some spring in their step, when they want.  On Wednesday, both the Senate and Assembly passed a state budget plan and nearly a score of “trailer bills” with only Democratic votes.  On Thursday, Governor Brown vetoed the budget bills, citing the fact that the plan was unbalanced and unfinanceable.

    A cynic might thing the Legislature simply took such quick actions to make sure they didn’t lose their paychecks; a realist might point to the Governor’s veto as proof of that.

    Another interesting quirk is that he only vetoed the main budget and not all the trailer bills.  So bills passed yesterday as part of this exercise on eliminating Redevelopment, passage of e-Fairness, and extended taxes, may (or may not) still be signed into law.

    The Governor’s veto message is very interesting and a good read for anyone that follows politics.  Click here to read the veto.

    May 20


    Posted by Crystal Whitfield | No Comments

    The battle for elimination of California Redevelopment continues, even after release of the Governor’s “May Revise.”  The Governor’s proposal for complete elimination of this funding remains as part of the plan, even though it has been met with stiff resistance by a broad coalition of local agencies, labor, business, affordable housing advocates, and even some environmentalists.

    We strongly support the Redevelopment program in California and are actively working with the California Redevelopment Association to push for reform – and continuation – of the program.  If you want to express your support for this measure click here to contact legislators directly by using the CAPWIZ tool on the CRA website.

    May 20


    Posted by Crystal Whitfield | No Comments

    On Monday, Governor Brown released his revised budget plan.  Known as the “May Revise,” this is an update meant to reflect the most current revenue numbers to the budget already submitted to the Legislature in January.

    According to the Governor’s office, the new budget still allows for a $10 billion structural deficit, but in the near term reduces by nearly $3 billion the amount of taxes needed to balance the budget for the coming year due to a slight uptick in revenues.  Since taking office in January, Brown and the legislature have cut spending by $9 billion and have taken other steps to reduce the deficit.

    With the new budget, the proposal to eliminate redevelopment remains unchanged.  However, the proposal to eliminate Enterprise Zones has been modified to allow for limited continuation of tax credits for new jobs. 

    Click here for more detail on the Budget.