Sales Tax Hike Expires This Week!

From Katy Grimes at Calwatchdog.com:

Finally some good news! California’s 1% sales tax surcharge is set to expire Friday, July 1 making our sales tax 7.25 percent, down from 8.25 percent.
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“This is great news for overtaxed California consumers and retailers who bear the sixth highest overall tax burden in the nation,” said Runner. “In fact, all Californians have good reason to celebrate. A lower sales tax will help our state’s economy and help job creation.”

While the Legislature and Gov. Jerry Brown could pull a rabbit out of a hat and agree on a budget deal before July 1, Runner says that it’s already too late to extend the higher sales tax without causing serious confusion (the minimum amount of time necessary to notify retailers of a sales tax rate change is 15 days).

In May 2011 the Board of Equalization notified approximately 680,000 California retailers and out-of-state businesses that make sales in California that the statewide sales and use tax rate will decrease from 8.25 percent to 7.25 percent on July 1, 2011.

“Temporary taxes often have a way of sticking around—keep in mind that the 1991 ‘temporary’ 1.25% sales tax increase is still with us today,” said Runner. “It’s a good thing for California that this latest 1% tax hike goes away and stays away.”

According to a Board of Equalization estimate, California families will save an estimated $233 annually. Even so, Californians will still pay the highest statewide sales tax rate in the nation.

Well, it was almost good news.

Runner Urges Sale of Unpaid Tax Bills

From Reuters.com:

California should sell its claims to unpaid taxes to the private sector to raise money to bolster its finances, a state tax official said on Monday.
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“Selling aging debt is a common practice in the private sector and has also been used successfully by many local governments,” George Runner, a member of California’s Board of Equalization, said in a letter to Governor Jerry Brown and the legislature’s leaders.
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He estimates California agencies that collect taxes and fees have more than $20 billion in outstanding accounts receivable, either as active or written-off taxes they are owed.

If California were to sell claims to that money it would potentially have to do so at a deep discount, Runner said.

But something is better than nothing for the state’s cash-strapped government, Runner added: “You don’t get your full dollar value, but you are getting some money in the door as opposed to not getting any.”

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Read Runner’s press release

Flawed prison ruling will set felons free

As published in the Sacramento Bee:

Re “Don’t fall for scare tactics on prisons” (Editorial, May 25):

The Bee’s editorial accused me of fear mongering when I warned that the U.S. Supreme Court’s flawed decision on California prisons poses a threat to the public safety. Not true.

Gov. Jerry Brown plans to move thousands of prisoners to local jails. Unfortunately those jails don’t have the capacity to house new prisoners, and that’s unlikely to change in the short time frame provided by the court. The result will be the early release of many convicted felons with a history of serious crimes.

These felons may be labeled “nonviolent” but don’t let that fool you. Nonviolent offenders include commercial burglars, car thieves and drug dealers. Many plea-bargained to avoid tougher sentences and many have violent histories, including prior convictions for child abuse, domestic violence or assaulting a police officer.

These are bad folks. I doubt you want them in your neighborhood.

The Bee’s editorial board would have you believe that fiscal conservatives are to blame for California’s current prison problems – if those tightwads would just support higher taxes, California’s problems would be solved.

But they don’t tell you that Californians already bear the sixth highest tax burden in the nation. We already spend more per prisoner – about $50,000 a year – than any other state. Health care costs alone have soared to $18,000 per prisoner per year since the federal takeover of our prison health care system.

The court’s finding of overcrowding was based on the “design capacity” of our prisons, which assumes one prisoner per room. Most of our prisons were built with two beds per room; accordingly their operating capacity far exceeds design capacity.

Perhaps The Bee believes convicted felons should have private rooms and premium health care when many jobless Californians have neither. I don’t.

Given the outrageous costs of our current system, it shouldn’t cost a penny more to house prisoners in other locations. In fact, we should save money. But that won’t stop politicians and editorial page editors from claiming otherwise in an attempt to scare folks into supporting higher taxes.

There are solutions to reducing our prison population. For starters, we should demand that the federal government transfer the 20,000 criminal illegal aliens in our state prisons to federal prisons. After all, they’re only here because the federal government failed to safeguard our borders.

But as we look for solutions, let’s not fool ourselves into thinking a bad court decision that threatens public safety is anything other than that.

George Runner on Charter Local Edition

‘Tax the Rich’ Code for Taxing Job Creators

As published at Fox and Hounds Daily and FlashReport.org:

Years of overtaxation and overregulation have given California the second highest unemployment rate in the nation. Even so some of our state lawmakers still believe that punishing success is a recipe for job growth.

Efforts by Assemblywoman Nancy Skinner (D-Berkeley) and other Democrat legislators to increase taxes on high income earners will actually punish California job creators and worsen volatile state revenues.

According to the Tax Foundation, California already has the third highest income tax rate and one of the most progressive tax structures in the nation. The top one percent of California’s income earners have incomes of $500,000 or more per year and pay up to 50% of all income tax revenues received by the state each year, according to a report by the non-partisan Legislative Analyst’s Office.

The battle cry to ‘tax the rich’ is really code for taxing California’s job creators, including many small businesses that are struggling to survive. Rather than help California’s budget, higher taxes will reduce revenues and drive even more job creators out of our state or out of business.

The Tax Foundation also found that most small businesses pay their business taxes using individual rates, and California’s taxes on small businesses are among the most burdensome in the nation.

The California Taxpayers Association (CalTax) recently announced that Franchise Tax Board numbers show the number of Californians reporting million-dollar-plus adjusted gross incomes fell by 20.2% from 2008 to 2009. Reported income fell by 27.8% and the amount raised by the extra 1% tax on millionaires (enacted by Proposition 63 of 2004) fell 31.3%.

According to Caltax, the falling numbers are the likely result of a “combination of high-income Californians moving to states with a more friendly tax climate…and the impact of the recession on personal income.”

CalTax also noted that a taxpayer making $2 million a year can save nearly $200,000 a year simply by moving from California to Nevada.

To paraphrase Ronald Reagan, the Democrats’ view of the economy could be summed up in a few short phrases: If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidize it.

George Runner Interview on Prisoner Release

Raising Oil Companies’ Taxes Will Kill Jobs

As published in the Press Enterprise:

Ask anyone what he thinks about gas prices and you’ll likely get an earful. The average price of gasoline in California has risen to more than $4 per gallon — and, motorists are feeling the pain.

It’s easy to blame big oil companies for this problem, and many do. However, doing so does nothing to explain why Californians see roughly 10 percent higher costs on average at the pump than the rest of the nation.

Nor does it explain why we refuse to tap the oil in the ground beneath our feet, which would create both new jobs and revenues.

Not coincidentally, California’s oil production has dropped by almost 45 percent in the last 25 years, and our refining capacity has not kept pace with demand.

Limited production and refining capacity drives up the price we all see at the pump, especially given California’s unique fuel-blend requirements.

Furthermore, California’s fuel taxes are the highest in the nation. Californians pay a shocking 66.1 cents per gallon in federal and state taxes and fees each and every time they fill up their tanks.

Truckers pay even more — 76 cents per gallon of diesel. These higher costs hit small businesses and working families squarely in the pocketbook.

Wanting to punish oil companies, some are proposing a new type of tax on oil production called a “severance tax.” This proposal would take the going rate for a barrel of oil and apply a 12.5 percent tax to that value at the point it is produced.

But instead of punishing the oil industry, we’ll end up punishing ourselves. The result will be more lost jobs and less revenues.

In January 2009, the Law and Economics Consulting Group released a study on the effects of a proposed 9.9 percent severance tax.

The study found that 10,000 jobs would be lost almost immediately if the tax were passed. Additionally, many of the roughly 100,000 jobs closely related to the oil production industry would be placed in jeopardy.

Now, remember California’s oil production has plummeted by 45 percent in the last 25 years, which is bad enough. With a severance tax of 9.9 percent, much less the 12.5 percent that is currently being proposed, production would further decrease by upward of 80,000 barrels a day.

Driving this much production out of California would undermine California’s economic recovery.

It would hurt property-tax revenues, as well as sales and use taxes, effectively hamstringing whatever benefits severance-tax revenues might have provided.

Any short-term boost in state revenue would be immediately undercut by permanent job losses and a further weakening of industry.

Given that California’s unemployment rate now ranks higher than Michigan’s, it’s foolhardy to place any of our remaining jobs in jeopardy.

Alberto Torrico, a former assemblyman and one of the severance tax’s major proponents, argued that without the severance tax, California is “giving away the energy for free.” This is, of course, silly when the state already imposes a plethora of taxes and fees on both the industry and consumers.

For the seventh straight year in a row, a survey of CEOs ranked California as the worst state for business. Torrico’s tax proposal would ensure our state retains this dismal distinction for years to come.

don’t kill jobs

Driving more jobs out of California is not an option. It is bad policy for a state to devastate an economy already reeling under high unemployment rates with an onerous new job-killing tax.

Instead, we should orient our tax and regulatory systems to be jobs friendly. Doing so is the only way to speed California’s recovery and help hard-working families.

George Runner, R-Antelope Valley, is a member of the California Board of Equalization.

Runner Blasts High Court Decision

As published at Flashreport.org:

As the lead legislative intervenor challenging an August 2009 federal court order reducing California’s prison population, I am dismayed by the U.S. Supreme Court’s decision today in Brown v. Plata.

The decision to force California’s prisons to release 46,000 convicted felons is a historic attack on the constitutional rights of states and the liberty of all Californians.

By flooding our neighborhoods with criminals, the Court will make one of highest taxed states in the nation among the most dangerous as well, further tarnishing the California dream.

At a time when law-abiding Californians cannot find jobs, it’s hard to imagine how convicted felons will do anything other than return to a life of crime.

But at least Justice Kennedy can sleep easier at night knowing that none of these dangerous felons will be released in his neighborhood.

Less Government, Please

As published in the FlashReport:

Treasurer Bill Lockyer caused waves last month when he suggested that given Republican lawmakers’ opposition to higher taxes, their districts should bear the brunt of spending cuts. He said, “The people who want less government ought to be at the front of that line to get less government.”

Senate Democrat Leader Darrell Steinberg expressed openness to the idea, saying, “You don’t want to pay for government, well then, you get less of it.” He added that any district-targeted cuts should not hurt “kids or the vulnerable” but instead be limited to “convenience services that affect adults.”

Outrage to the proposal—appropriately so—came fast and furious.

Senate Vice-Chair Bob Huff said the proposal was “just nuts.”

Jon Coupal of the Howard Jarvis Taxpayers Foundation compared the idea to the strong arm tactics of an organized crime protection racket. He also suggested it might violate the equal protection guarantees found in both our state and federal constitutions.

Even the Los Angeles Times called the plan “ham-fisted and wrong.”

Mr. Lockyer’s point merits further consideration and a more thorough response.

Republicans do want less government. We believe our state’s fiscal problems are the result of too much spending, not too few taxes.

We believe that government spending doesn’t produce happiness. Instead we know that government spending can foster dependency, stifle entrepreneurship and fund wasteful bureaucracies. We also know that government programs tend to grow larger and larger yet often outlive the purpose for which they were created. Some even create more problems than they solve.

We Republicans question how it is that some states manage to do more with less and are also able to grow jobs. We ask why so many businesses are choosing to locate or expand outside California, and why our state’s unemployment rate is higher than nearly every other state. We’re also pretty confident we know the answers to these questions.

The evidence backs us up. According to the Tax Foundation, Californians bear the sixth highest overall tax burden in the nation. California’s income taxes, sales taxes and fuel taxes rank at or near the top. If not for Proposition 13, which protects homeowners by limiting property taxes, our overall tax burden would be far worse.

Despite the fact that California taxes and spends more than most other states, our schools and roads don’t reflect it. And a diminished private sector is forced to pay more to support state worker wages and benefits that exceed those of many private sector workers.

Contrary to conventional wisdom, increased government spending can actually hurt a state’s economy. A little-noticed 2010 Harvard Business School study found that increased federal spending in states with politically powerful leaders causes “significant retrenchment” by corporations, dampening investment and employment activity.

It’s not too much of a stretch to say that state spending could have the same impact.

Yes, less government can be a good thing.

The real problem with Lockyer’s proposal is that it doesn’t go far enough. If Republican lawmakers are asked to accept less tax dollars for their districts, they should get to determine where and how those dollars are spent.

They should be empowered to enact policy reforms they have long championed to help California’s struggling private sector create jobs, including less red tape, lower taxes, reduced energy costs and real tort reform.

They should be allowed to enact commonsense education reforms putting kids first by freeing teachers and locally-elected schools boards from Sacramento’s micromanagement and granting parents more control over their children’s education.

Public-private partnerships could boost these efforts and move California’s transportation system into the 21st century. They could also expand our state’s dismal water storage capacity and help with other infrastructure needs.

These reforms would revitalize areas of our state currently plagued by joblessness. Rather than flee California, businesses could relocate to more friendly terrain available only in Republican districts. Employers in other states might, for a change, see California—albeit only some parts—as an attractive place to do business.

If accompanied by real reforms, Lockyer’s spending cuts could be the best thing that ever happened to Republican districts. Economic growth and job creation would lead to lower unemployment; increased government revenues could be invested in local priorities or returned to taxpayers.

Mr. Lockyer, if less government truly means less government, then count me in.

Runner Responds to Governor’s May Revise

As published at Flashreport.org:

Overtaxed Californians will find little to cheer in the Governor’s revised budget proposal.

Despite the Governor’s concession to postpone higher income taxes for a year, he continues to push for legislative approval of higher sales taxes and car taxes this year.

And although the Governor dropped his effort to abolish enterprise zones—and the jobs they create—he continues to miss the big picture: Californians need jobs, not higher taxes.

Our best hope for new revenues isn’t higher taxes, but new jobs fueled by a recovering economy. Unfortunately, the Governor has yet to truly lift a finger in the fight for California jobs.