As your taxpayer advocate and elected member of the California State Board of Equalization, I'm fighting to protect your rights and bring about fair tax policies that help grow our economy and jobs. As always, I welcome your ideas about how we can work together to solve the problems facing our state.
Windfall Could Tempt Legislature to Repeat Past Spending Mistakes
We’ve all heard dramatic stories of lottery winners acquiring hundreds of millions of dollars only to declare bankruptcy a few years later. In fact, studies show 70% of all individuals who suddenly receive large amounts of money will lose it in a short period of time.
The cause of this problem is impulse spending by people who incorrectly assume they will never have to worry about money again. They spend as much as they want on whatever they want, making permanent financial decisions with their one time earnings.
This year, California essentially won the lottery when it comes to the budget. The Governor’s budget proposal shows nearly $20 billion more in revenues will be generated during the next fiscal year than was collected three years ago.
Years ago, during the Davis administration, California found itself in a similar situation. As Vice Chair of the Assembly Budget Committee at the time, I remember sitting in Governor Davis’s office as he personally promised to show fiscal restraint with the state’s large revenue windfall. As you may know, Governor Davis ultimately caved to pressure from other Democrats and authorized ongoing spending with those temporary revenue dollars.
Governor’s State of the State Provides Few New Ideas
I recently attended Governor Brown’s State of the State address. The Governor provided a good executive summary of where California is now but provided little direction for our future.
He outlined many of California’s problems, but did not propose tangible solutions.
I am pleased to hear Governor Brown’s continued calls for fiscal discipline. However, just as saving money in a rainy day fund is an important way to prepare for future economic downturns, additional water storage is vital to ensuring California is equipped for future droughts. I am disappointed Governor Brown did not provide a plan to deal with our current water shortage.
Governor Brown is a good cheerleader for California. The question is, will he stay strong when faced with a liberal Legislature that wants to increase government programs, taxes and regulations.
The State of the State address is available online to read or watch. If you have time to take a look, I’d be interested to know your thoughts.
Telephone Townhall for Small Businesses
On February 4 at 10:00 a.m. and February 19 at 2:00 p.m. I’ll be hosting two telephone townhalls for small business owners. These free events, co-hosted by the National Federation of Independent Business, will provide specific information to small business owners on how best to avoid common tax errors.
Small businesses play a vital role in our economy, but everyday owners face challenges with tax laws in the State of California. The laws can be complicated and owners can face stiff penalties and interest if deadlines and accuracy are not met. As their elected taxpayer advocate, I want to hear their concerns and answer their questions.
The telephone townhalls will inform small business owners about how to protect themselves from common tax traps such as missing records, successor liability, undercollection of tax, and invalid resale certificates. Information about these issues will help small businesses avoid making potentially costly mistakes.
If you’re a business owner or interesting in starting your own business, I encourage you to join me on one of these calls. Please register online at boe.ca.gov/townhall or by calling 916-445-3032. Individuals who pre-register will receive a telephone call at the start of the event inviting them to connect to the townhall.
Fire Fee Update
I recently sent a letter to Governor Brown urging him to restore full funding to CAL-FIRE and eliminate the confusing and controversial Fire Prevention Fee in the revised version of his 2014-15 budget proposal.
The fire fee was established during a time of crisis, when the state faced multi-billion budget deficits. While those budget deficits are gone, the fire fee remains, continuing to unfairly burden thousands of rural property owners throughout California.
The "fee" also places costs on CAL-FIRE and the State Board of Equalization while providing no additional fire protection for Californians – even with the state’s increased firefighting expenses this year due to dry weather and drought.
Restoring CAL-FIRE’s full funding, using existing revenue, will save the state the costs of continuing to administer, collect, litigate, and likely refund the inefficient fire fee.
The fiscally responsible thing to do is eliminate it.
In other fire fee news, the fire fee class action lawsuit faced one more judicial hurdle in November as the Sacramento County Superior Court held another hearing on the merits of the litigation.
According to the Howard Jarvis Taxpayers Association, the outcome of this hearing clarifies who will receive refunds if the fire fee is overturned. Unfortunately, the judge ruled that only those who filed timely petitions will be eligible for full refunds.
This means it is very important for property owners to protest every billing by timely filing a new Petition for Redetermination.
You can visit calfirefee.com for a complete copy of the ruling.
Q – What happens if a city imposes an additional sales tax on a specific category of goods sold in that city?
A - Under Revenue and Taxation Code Section 7203.5, BOE is required to terminate its contract to administer sales or use tax for a local government if that entity imposes a sales or use tax in addition to the Bradley-Burns Uniform Local Sales and Use Tax. Such termination of the contract for administration of the sales and use taxes would have significant negative financial implications for that local government.
For more information, see this BOE Special Notice.
In the News
BOE Resolves to "Zap" and Trash Tax Evasion in 2014 (4-Traders, 1/8/14)
Runner Response to Governor’s Budget (Placer County Online, 1/9/14)
Security Deposit Shakedown is Over (SCV News, 1/10/14)
George Runner: Windfall could tempt Legislature to repeat past spending errors (The Bakersfield Californian, 1/19/14)
George Runner responds to State of the State Address (Santa Clarita Valley Signal, 1/22/14)
Runner urges governor to stop fire fee (The Daily Press, 1/25/14)
Prop. 39 revenues disappoint after loophole closed (Cabinet Report, 1/27/14)