Lawmakers, educators and representatives of the homebuilding industry pushed back Wednesday against Gov. Jerry Brown’s proposal to end a long-standing state policy of issuing bonds to help pay for school construction.
Businesses have long complained about the gross-receipts tax, both because its rates are higher than in other cities and because it’s a tax on top-line revenues, before operating expenses and other business costs are factored in. Several major business groups have called for the elimination of the tax altogether, a stance supported by a special city committee two years ago. The say dropping the tax would drive business investment in the city.
With well over 300 billion vehicle-miles of pavement-pounding travel each year, our highways and local roads and streets are in sad shape. California not only has the nation’s worst traffic congestion but the nation’s second worst pavement conditions.
An extra $2 billion annually over five years would help fill the gap under Atkins’ plan, with about $1.8 billion of it flowing from a new fee on all drivers. Atkins said she has not yet determined how the fee would be assessed but estimated it would amount to roughly a dollar a week.
Tax proponents say that the November 2016 presidential election offers the last chance for a high turnout among voters who are likely to support a Proposition 30 tax extension before its sunset in 2018. Our most recent poll confirms this view.
Total state government revenue rose by 16.3 percent, from $1.9 trillion in 2012 to $2.2 trillion in 2013, according to the latest findings on state government finances from the U.S. Census Bureau.
California contains 12.2 percent of the nation’s population but its state government accounted for 13.8 percent of all state spending in the 2012-13 fiscal year, according to a new Census Bureau report.
While the prospects for tax reform in Washington are dim, as many as 20 Republican governors are moving forward with their own pro-growth tax-relief initiatives. This is on top of the 14 states, including Florida, Michigan, Ohio and Wisconsin, whose 2014 tax cuts will take effect this year.
A panel created by the Legislature to review state parks operations will report Friday that the Department of Parks and Recreation is underfunded and mired in outdated bureaucracy, and that the parks system is out of reach for many poor people in urban areas.
Significant new spending commitments could represent a failure of the state to heed the lessons of its past if they were to come at the expense of its budget reserve or rested on aggressive future revenue assumptions, the report says.
“California’s finances are roaring back,” the report said. “History would suggest, however, that any fiscal renaissance will be temporary.”
With that, the governor explained exactly why the idea of flattening income-tax rates will never fly. To make up for a 1 percent rate reduction in tax rates on the few with incomes of more than $300,000 would require a 1 percent rate increase on everyone else.
Business leaders say L.A.’s business tax rate is too high and puts local firms at a competitive disadvantage. Since taking office in 2013, L.A. Mayor Eric Garcetti has said he wants to reduce the tax to stimulate economic growth in the city.
The Master Plan for Higher Education in California, produced in 1960, was a visionary document for its time, but must be updated to reflect the changed economic, demographic and financial environment of the current century. California’s economic future will depend on the outcome.
The responses fell into two broad categories – anger that existing gas taxes and other transportation revenues had been diverted into non-transportation uses, and skepticism that the Department of Transportation could be trusted to do the needed work.