In Jerry Brown’s California, you have two choices: Embrace the governor’s agenda, or become the object of ridicule.

In his State of the State address, Brown contrasted “declinists” who see California as a “failed state” with him and others who see “unspent potential and incredible opportunity.” The implication being that those who support his proposals are bold visionaries, while the rest of us simply lack courage and foresight.

The governor’s agenda includes tax hikes, a costly rail plan and burdensome energy policies aimed at spurring so-called “green jobs.” At its essence, it is a call for more public subsidies to fund more government programs.

What’s missing is a sense of reality. Our choice is not between utopia and dystopia, between courage and cowardice. Rather we must choose between wisdom and foolishness and between caution and haste. We must live in the real world, soberly evaluating each proposed policy on its merits.

Ponder the following questions:

• Why have California voters consistently rejected tax increases? Do they lack faith in our state?
• Why has support for high-speed rail plummeted in recent years? Have Californians become cowardly?
• Why did California’s unemployment rate rise higher than other states? Shouldn’t California’s rate be lower given our huge share of venture capital and successful startups, not to mention our inviting climate?

It isn’t that Californians lack faith in themselves, our state or the future. It’s that we’ve lost faith in politicians and government programs. We’ve been promised the moon time and again but end up with little to show for our significant tax investments.There are two competing visions of how to best spur job creation and California’s recovery. The first, espoused by Brown, would increase tax rates that are already among the highest in the nation, making our overall revenue picture even more volatile. In just four years, the governor’s plan would increase state spending by 30 percent, and California would take on billions in new debt to fund a dubious high-speed rail plan.

The second vision, shared by the majority of California taxpayers, would insist that government live within its means, doing more with less. State leaders would spur job creation by eliminating needless laws and regulations that make California uncompetitive with other states. Our tax policies would be smart and competitive.

Rather than creating jobs that survive only with ongoing subsidies, taxpayers would keep more of their hard-earned dollars. After all, it wasn’t the government that created the success stories of Apple, Intel, Hewlett-Packard, Oracle, Qualcomm, Twitter, Facebook and others cited by Brown.

An obvious place to start would be to reform our tax laws to help stop the exodus of manufacturing jobs. Did you know that California is one of only three states in the nation that fully taxes both the input and output of the manufacturing process? According to the Milken Institute, a five-cent reduction in this tax would yield net tax revenue within three years and bring 500,000 jobs to our state within ten.

It should be a top priority.

Let’s put some faith in the people of California. Let’s help the job creators who are forced to comply with what even Brown admits is a “plethora of complex laws and regulations.”

California’s best years are yet to come. But the credit will go to the hard working citizens of this state, not higher taxes and more government programs.

As an elected member of the California State Board of Equalization, I have the unique privilege of serving as a taxpayer advocate for the citizens of California.

California is the only state in the nation that has an elected tax board that is directly accountable to voters. The five-member board on which I serve administers more than 30 tax programs and fees, including sales and use tax, tobacco tax, fuel taxes and timber yield taxes. My fellow board members and I hear appeals relating to these taxes and fees, as well as state personal income tax appeals that originate from the Franchise Tax Board.

Each day, my staff and I work hard to ensure that taxpayers are treated fairly when dealing with California tax bureaucracies. Whether the issue is a tax appeal or an audit, we want to see taxpayers treated with the respect they deserve.

The district I represent is comprised of more than 9 million Californians and more than half of the state’s land mass. The district spans much of inland California—from the Oregon border to Southern California—and includes the entire Central Valley. As you might suspect, tax issues impacting California farmers are of great interest and concern to me.

One of the issues my office has worked on this past year relates to the agricultural exemption for farm equipment. Current California law provides a partial sales and use tax exemption for equipment and machinery primarily used in agricultural activities. Farmers who purchase this equipment need not pay the state General Fund portion of the sales tax, but must still pay local sales taxes.

The definition of farm equipment and machinery is fairly broad and includes, among other things, agricultural heating and cooling equipment, livestock systems, irrigation systems and wind machines.

This seems straightforward enough, but someone must decide which specific equipment qualifies for the exemption, and which does not. The Board of Equalization makes these calls. Given the high cost of farm equipment, the financial impact of even a seemingly small decision can have a huge impact on taxpayers.

Here’s a real-life example: A growing number of California farmers are purchasing solar panels to help lower their irrigation system energy costs. Given that diesel generators receive a tax exemption, it came as a complete surprise when they were told that their new solar systems would not qualify for the same tax exemption.

This initial interpretation hinged on the fact that California law requires that these new solar systems be directly connected to utility distribution lines rather than to the irrigation systems they are purchased to power. Because there was no direct connection, farmers were initially denied the tax exemption.

Considering our state policymakers’ enthusiasm for alternative and renewable energy solutions, this interpretation seemed simply absurd.

It is at times like this that taxpayers need a friend they can call for help. When I learned of this issue, I directed the staff to take a closer look. Working closely with the impacted farmers and the California Farm Bureau, my office was able to provide additional information to bring about a more reasonable outcome for California farmers.

I’m pleased to report that the Board of Equalization staff has released an opinion clarifying that the tax exemption can be applied to solar equipment if the taxpayer can “demonstrate that the solar facility is specifically designed to provide power to qualifying machinery.”
Now that we’ve found a pathway to ensure this tax exemption is available, it’s important for farmers to ensure they will qualify for the exemption before they make a purchase. However, farmers who have already purchased a solar system and paid the full tax should be aware that they may file a claim for refund for up to three years after a purchase.

I look forward to working with staff, the Farm Bureau and other interested parties to ensure that this information is available in a clear and concise manner.

As always, my office stands ready and willing to assist taxpayers who encounter problems with the board or other state tax agencies. Please do not hesitate to contact me should you need assistance.

Imagine you found the house of your dreams. The price is $450,000. You sign papers only to later learn the sellers made a mistake. The price for the house is actually $1 million. Fortunately, under California real estate law, you can back out of the deal. But if you were a California voter buying a train instead of a house, you might be out of luck.

In November 2008 California voters narrowly approved – by a vote of 52.7 percent to 47.3% percent – Proposition 1A. The measure authorizes nearly $20 billion in state spending to establish high-speed train service linking Southern California counties, the Sacramento/San Joaquin Valley and the San Francisco Bay Area.

At the time, the entire project was expected to cost about $45 billion.

Proponents claimed funds from other public and private sources would cover the project’s remaining costs.

Tom McClintock, Jon Coupal and I co-authored the opposition ballot argument. We called the measure a “boondoggle” that “could cost $90 billion – the most expensive railroad in history.” We warned that no one really knew how much the project would ultimately cost.

After years of waste and mismanagement, California’s High Speed Rail Authority (CHSRA) has finally admitted what critics like us warned all along: “Building the entire system will take longer and cost more than previously estimated.”

In fact, the price tag for this risky transit gamble is now nearly $100 billion – more than twice the original estimate. The new number is greater than California’s entire annual state budget. To fund the entire project today, every Californian, including men, women and children, would need to write a check for more than $2,500.

Without those checks, existing funding will only be enough to cover the first phase of the project connecting Fresno and Bakersfield. Should additional funding materialize, Merced and San Jose will be the next stops.

Despite the uncertainty, the folks at CHSRA claim California voters still want to buy this train. At a recent press conference, CHSRA chair and former Democrat Assemblyman Tom Umberg said, “There are some things that do change – development changes, cost changes. But the will of the California voter, I believe, remains the same today…”

Mr. Umberg might believe California voters are still on board, but I’m not so sure. Much has changed since 2008. California’s unemployment rate has risen from single to double digits, the state’s budget has become much, much tighter, and our credit rating has been downgraded to the worst of any state in the nation.

Further, the deadly collision of two high-speed trains in China earlier this year has prompted new worries about the safety of high-speed rail and led to the recall of 54 trains, reduced speed limits and a moratorium on new projects in that country.

Finally, renewed concerns about our nation’s debt and overall government spending make the outlook for federal funding far less certain. Congressman Kevin McCarthy has introduced a measure that would freeze federal funding and require a thorough audit of the project. The measure, introduced last month, is being co-sponsored by nine other California congressmen.

Perhaps California voters support high-speed rail regardless of the cost.

If so, high-speed rail proponents shouldn’t fear a new vote on their new plan. If not, it would be a breach of contract – or as liberal columnist Tom Elias puts it – “a bait and switch” – to move forward with a costly plan that is little like the one Californians voted for three years ago.

As even Mr. Umberg admits, there are other options for improving California’s crumbling transportation infrastructure. One hundred billion dollars – or even a smaller portion of that number – could do much to improve the roads, freeways, ports and airports Californians use every day. The taxpayers who will foot the bill should make this call.

To that end, state Sen. Doug LaMalfa plans to introduce legislation putting the project back on the ballot. California taxpayers should support his effort and urge Gov. Jerry Brown, the Legislature and the CHSRA board to do the same.

• Do you have an idea that would innovate or improve the administration of tax and fee programs at the BOE?
• Do you have a solution to address an apparent disparity in the fairness of any BOE-administered law, regulation or administrative policy?
• Do you have a suggestion that would change the way the BOE does business in order to ease the tax compliance burden on small business?

I invite you to submit your ideas via my BOE website. I will select the best proposals for consideration by my fellow Board members. If necessary, I will also take your proposals directly to members of the Legislature for introduction next year.

Thank you in advance for your participation. By identifying unnecessary or redundant tasks, we can help the private sector redirect wasted time, energy and resources toward job creation and new investment in our state.

Please submit your proposal(s) here.

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Gov. Jerry Brown recently signed compromise legislation aimed at avoiding a costly ballot fight between Amazon and in-state retailers. This compromise opens the door for Amazon to build distribution centers in our state that could provide thousands of jobs for out-of-work Californians. That’s very good news.

But it’s hard to dismiss the nagging suspicion that while the “Amazon tax” saga created political intrigue and drew media interest, it has done little to move our state toward economic recovery.

The compromise measure, while welcome, provides only a short-term delay to a bad law that lawmakers approved as part of California’s budget this summer. The constitutionally questionable law was supposed to produce $200 million a year in revenue by forcing more out-of-state online sellers to serve as California’s tax collectors.

The law was doomed to fail from the start. It did not produce the revenue, or provide the level playing field, its proponents envisioned. Even so, it took a well-funded referendum effort to force lawmakers to negotiate a delay to allow time for Congress to act on the issue.

Absent a highly unlikely federal solution, we’ll be right back in the same mess in a year. The state of California will again be killing jobs, driving away investment and inviting costly litigation.

A recent survey by the Performance Marketing Association found that in just two months, the Amazon tax wreaked havoc on an estimated 25,000 California-based Internet affiliate businesses: 37 percent lost more than half of their income, 22 percent closed their businesses, and almost 32 percent moved or plan to move out of state.

Given Amazon’s plans to reinstate affiliates, some of these folks will soon get a new lease on life. But for the estimated 15,000 affiliates who don’t have ties with Amazon the news means they will be able to work for an additional year only if they are reinstated. There’s no guarantee that will happen.

Those who have already left California are unlikely to return. In early August, successful online entrepreneur Erica Douglass blogged “Dear California: I’m Leaving You. Here’s Why.” In her blog post, she describes several “examples of the crap” California’s government has put her through. She writes that the Amazon tax was the “final straw” that prompted her to relocate her business from San Diego to Austin, Texas.

Julia Wessels founded the website “The Frugal Find” as a hobby, but it quickly became a full-time family business based out of her and her husband’s home in Antioch. After losing 40 percent of their gross monthly income after the Amazon tax became law, they decided to move their kids and business to Oregon. In just four weeks they were gone.

These are just two of the many entrepreneurs who have decided to leave our state as a direct result of legislative malpractice. But each is a significant loss for our state.

Some might argue that the loss of these entrepreneurs is a small price to pay in order to achieve greater sales tax collection for the state of California. I disagree.

The only way to provide lasting revenue for our state’s budget problems is by growing our state’s economy and jobs. To achieve this end, we must provide a stable business climate that helps entrepreneurs like Erica Douglass and Julia Wessels stay, grow and thrive in California.

California now ranks a dismal 50th in net business creation; we have the second highest unemployment rate in the nation. If California’s leaders spent more time talking to job creators instead of attacking them, they might find ways to legislate without inflicting pain on Californian entrepreneurs in the process. A jobs deal with Amazon and other companies could have easily been reached months ago – without an Amazon tax.

California once was a land of opportunity. Unfortunately, high taxes and excessive regulations have driven California’s unemployment rate to record highs. Our state continues to chase out employers, entrepreneurs and even workers – just about anyone who can’t afford to fund ballot measures to repeal the bad laws and regulations that drive them crazy.

It’s a good thing Amazon is coming to California. Unfortunately, the Amazon compromise provides no model for our state’s future job creation efforts. By creating an uncertain future for entrepreneurs and investors, it will only reinforce the notion that job creators enter California at their own risk.

Give Gov. Jerry Brown credit. He’s smart enough to recognize that imposing massive property tax hikes on California’s struggling job creators will hurt, not help, our state’s economy. And he’s willing to take heat from members of his own party for his stand.

Last month, Los Angeles Mayor Antonio Villaraigosa gave a speech to the Sacramento Press Club urging “progressives” to “start thinking and acting big again” in order to “invest…in our economy.” He challenged Brown to have “the courage” to “strengthen” Proposition 13, an important taxpayer protection measure approved by voters in 1978.

Lest anyone be confused, let me translate: Mayor Villaraigosa has no intention of “strengthening” the property tax protections in Proposition 13. Instead he wants to strip away those protections for business owners, including Main Street mom-and-pop businesses like hair salons, hardware stores and restaurants.

According to the Howard Jarvis Taxpayers Association, an organization that exists to defend Proposition 13, prior to that measure there were no limits on property tax rates and assessments. Taxpayers’ properties could be reassessed 50 percent to 100 percent in a single year and see their bills jump accordingly. As a result many taxpayers lost their homes and businesses.

At a time when taxpayers are once again losing homes and businesses, there’s no sense in making the problem worse. The businesses we see when we drive down the street are survivors of the Great Recession, but that’s no guarantee they will be able to continue to keep their doors open and workers employed.

Yet Villaraigosa and others want to target these survivors. Apparently for “progressives” the definition of “progress” is to make California first in taxes and unemployment.

According to the Tax Foundation, Californians bear the sixth highest overall tax burden in the nation. Our state’s income taxes, sales taxes and fuel taxes rank at or near the top. Even property taxes aren’t particularly low — California ranks 14th — but without Proposition 13, they would be much, much higher.

Taking even more money from private taxpayers to “invest” in more government bureaucracy doesn’t grow our economy. Instead, it would shrink it. The taxpayer would have less money to spend, invest, and hire workers. And our state would end up with even higher unemployment.

The vast majority of jobs and investment in our state come from the private sector, not from government. In fact, public sector jobs and investments only exist because the private sector pays for them.

Like it or not, California is in a global competition for jobs. Many California businesses can no longer afford to expand. The cost of doing business in our state is already too high compared to other states. As a result, many taxpayers are leaving for greater economic freedom elsewhere. According to a recent study, California is experiencing a net loss in new business startups, falling from first in the nation to a dismal rank of 50th last year.

If our state’s leaders want more revenue for public sector investments, they need to attract more private sector investment. There are no shortcuts. Only a healthy, vibrant economy that creates jobs for Californians will produce tax revenue in abundance.

A good place to start would be for the governor and the Legislature to launch a comprehensive review of the costly regulations burdening private sector businesses. Commonsense reforms could free up millions of public and private sector dollars. A similar effort at the federal level recently found savings of $14 billion.

Big thinking is good, but bad thinking is not. If we truly want progress, we need to start viewing private sector taxpayers as a partner, not a piggybank. And if we truly care about Main Street, we’ll keep Proposition 13 whole.

I’m pleased to report that Senate Republicans yesterday held firm against an attempt by Democrats to strip California voters of their right to hold a referendum on the “Amazon Tax.”

AB 155 would have cemented the failed policy of AB 28X into law, but the measure fell five votes short of the required 2/3rds vote. In his floor speech, Senator Sam Blakeslee rightly described the measure as “an attempt to thwart the voice of the people.”

Opponents of the “Amazon Tax” have already collected more than enough signatures to force a referendum vote next year. And as I recently warned the Governor and legislative leaders, the $200 million they are counting on in “Amazon Tax” budget revenue is certain not to materialize this fiscal year.

Even so, the Governor and Democrat leaders have spurned an offer by Amazon.com to collect the tax in two years and voluntarily bring thousands of jobs to California in exchange for a repeal of AB 28X.

Republicans must continue to hold the line against the Democrats’ anti-democratic efforts. Yesterday’s vote on AB 155 is only the first attempt to undo the “Amazon Tax” referendum effort. Democrat lawmakers will likely continue to seek Republican votes until session adjourns this Friday and could bring the bill back at a moment’s notice.

In addition, Democrats are continuing to search for legal loopholes that would give the Attorney General or some judge an excuse to block the “Amazon Tax” referendum. That will be a tough sell, as even Legislative Counsel has already opined that majority-vote budget bills are referendable under Proposition 25.

But as is evident by the fact that the Democrats brought AB 155 to the floor for a vote, rational thinking isn’t exactly in abundance under the Capitol dome right now.