Kudos to CalTax for picking up on the Board’s reluctance to give up extra resources with regard to the new Flavored Malt Beverage regulation (link).

When we adopted the regulation last year, over my objections, the Board told the Department of Finance to expect $38 million in revenue for the fiscal year. As I warned repeatedly, it turns out the regulation is unenforceable and easily dodged.

The companies this regulation sought to punish simply changed the formula in their products so they no longer contain distilled alcohol. As a result, year-to-date, the state has collected only $6,000 of revenue. (Yes, that means our expert revenue estimates were off by 6,333%) To gear up to collect this tax we asked the Department of Finance for more money. Finance now understands how ridiculous this tax is and they want the BoE to completely withdraw the request. I agree with Finance. With a hemorrhaging state budget this should be a very simple decision to save the state money.

The BoE is asking for $1,328,000 (General Fund) in Fiscal Year 2009-10. Now that we… Read More

Today GOP Gubernatorial aspirant Meg Whitman gave the first of three major speeches she intends to make this week. With all of the politics taking place in Sacramento right now, I don’t really have much time to cover and analyze her remarks — right now. We’ll be able to pivot back to 2010 politics soon enough (Whitman conducted a couple of interviews with newspapers that are certainly worthy of commentary).

Whitman spoke today in the Silicon Valley (which she would know well) at the Tech Museum of Innovation in San Jose. I have attached below a link to her speech. If you’re following this primary, you should read it — as it is Whitman’s first major address as a candidate.

Ironically, I was last at the Tech Museum a couple of years back, to attend the swearing-in ceremony of newly elected Insurance Commissioner Steve Poizner. How poetic. (*Note,… Read More

Given that Senate Republican Leader Darrell Steinberg has lectured his colleagues to "bring their toothbrushes" as a statement of his willingness to "lock down" the State Senate until somehow, out of pure physical exhaustion, he can gather votes for his major tax increase (good luck) —members of the State Assemblyare well prepared if Speaker Karen Bass follows uses the same sort of strong-arm tactics the legislature’s lower chamber.

Assemblyman Bill Emmerson, an orthodontist by profession, has provided his Assembly colleagues with toothpaste and toothbrushes.

In a note with his small gift of hygiene products to his colleagues, Emmerson wrote, “I hope this small tube is enough to get you through these trying budget negotiations.”… Read More

This morning we praised Senator Cox as being one of 13 GOP Senators who are keeping every family in California safe from billions in new taxes. Now the word is that he is in heavily, unilateral negotiations to try and “strike a deal” — not good. Republicans united can move forward a no taxes plan, such as the one simply articulated by Steve Poizner today. Senator Cox, please help Republicans reject this plan!… Read More

Our esteemed editor Jon Fleischman posted a John Fund commentary on the state budget crisis, in which Fund mentioned speculation that Darrell Steinberg and Karen Bass might pass a tax hike on a majority vote.

I say: please, go right ahead. Not only would it be declared unconstitutional, but California voters would be presented with an enormous, purely Democratic tax hike.

I’m all for clarity, and in this case such a rash action by Bass and Steinberg would make it crystal clear to California voters that the Democrats are the party of higher taxes, the party of raiding working family budgets rather than restraining the state spoending spree.… Read More

EDITORIAL FROM TOMORROW’S PRINT EDITION OF THE WALL STREET JOURNAL

If you thought Washington’s stimulus debate was depressing, take a look at the long-running budget spectacle in California. The Golden State’s deficit has reached $42 billion, Governor Arnold Schwarzenegger is threatening to furlough 20,000 state workers (go ahead, make our day), and as we went to press yesterday Democrats who control the legislature had blocked lawmakers from leaving until they finally get a deal.

It’s sad to watch. The Golden State — which a decade ago was the booming technology capital of the world — has been done in by two decades of chronic overspending, overregulating and a hyperprogressive tax code that exaggerates the impact on state revenues of economic boom and bust. Total state expenditures have… Read More

I appreciate that Insurance Commissioner Steve Poizner has come out strongly against the budget deal with its $14 billion tax hike (although I cringed at his "they don’t have the guts to raise taxes on the rich" comment. Can we please not lend any credibility to progressive taxation?).

So why is Poizner headlining an event to raise money for Anthony Adams, one of the three Assembly Republicans who is voting to pile this mass of taxes on the rest of us?:

This tax hike isn’t an ordinary issue on which Republicans of good will can disagree. This is elemental. It goes to the heart of the Republican Party’s reason for being. It is a political Rubicon that shouldn’t be crossed without penalty.

One penalty is party luminaries should shun tax-hikers like Adams and refuse to raise money ffor them. I’d like to see Poizner put some teeth into his rhetoric and say, "Sorry Assemblyman Adams, but I can’t ask republicans to… Read More

The Lincoln Club of Orange County has sent a letter to the State GOP Legislative leaders and Senators Maldonado and Cox urging them to oppose the current budget deal.

See the link to the letter below.… Read More