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The Leonard Letter:
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Leonard Letter 6/29/2009
THE LEONARD LETTER
A weekly electronic newsletter about
California government, business and taxes
Bill Leonard, Member
State Board of Equalization
June 29, 2009
Find these stories online at: http://www.billleonard.org/
QUOTE OF THE WEEK
Guess which president said:
"Any man worth his salt will stick up for what he believes right, but it takes a slightly better man to acknowledge instantly and without reservation that he is in error."
See below for answer.
UNDER THE DOME
***Problem Solving by Delay***
Normally, half a loaf is better than none, but under the Capitol dome that kind of logic does not always work. Over the last few days the Democrats have offered a solution to the short-term cash flow crisis but not to the on-going problem of overspending. The Republicans are split, with some advocating the partial solution then returning to the issue of a long-term fix while others argue that the problem is so acute that we do not have the luxury of time to address the problem incrementally. Earlier I was on the side of those suggesting that we agree on what is offered and come back for more debate on the rest of the problem.
However, Senator Dean Florez (D-Shafter), who is Majority Leader, brought me up short. During the debate on Friday about the short-term measures, he argued eloquently that preventing the state from issuing IOU warrants was the most important item before the Legislature, and since everyone agreed that the proposed bills would cut spending enough to cover the cash gap, they should be adopted now. Then he shocked me with way too much disclosure of the Democrat strategy by saying that the structural deficit and the imbalance of the current year budget and next year's budget will NOT be resolved while he remains in office. He is termed out November 30, 2010. The Senate majority has no plans to resolve this endemic problem now and apparently do not plan on addressing it until at least 2011.
Wilson, Davis and Schwarzenegger have all tried versions of this wait-until-the-problem- goes-away strategy. It does not work. There have been times in the past where eventually we have grown out of the spending problems by a boom of economic activity. Given the state's anti-job and anti-business climate it is irresponsible to assume again that taxpayers will be the solution to the problem of spending. Delay is not the answer.
AROUND THE STATE
***More Thoughts on the Con Con***
Last week I participated in the New America Foundation's "California v 2.0: The Roads to Fundamental Reform." Everybody there knew this was a promo for the idea of a Constitutional convention. Panelists from the Bay Area Council, California Forward and the New America Foundation all are in favor of a convention. However, other than some general assumptions about gridlock, partisanship, governance failure, and political malaise, they did not present any specifics on what the problems are, or any proof that the Constitution has to be rewritten in order to solve these non-specific problems.
What struck me was that these foundations appear to have lots of money and want to spend that money doing good. Since people's opinions vary so widely on what would be "good," they have skipped over the definition of the problem and lightly passed over the proposed solutions in order to jump straight to "process." "Process" is fun to talk about when you have no stake in the outcome.
Reflecting distrust of the elective process, the Bay Area Council is proposing that we empanel a Gigantic Jury of 400 Californians who would be called and then tasked with rewriting the Constitution which would then be presented to voters for approval. Discerning voters will want to know who is the staff for this Jury, just like it is important to know who is the District Attorney who staff real Grand Juries. 400 Californians who yesterday were minding their own business and today carry all hopes of saving state government might choose to rely a lot on the staff experts. Even if the jury is unbiased, what of the staff?
I do not believe any of the proposals most frequently discussed by pro-Conventioneers (e.g., eliminating the 2/3 vote requirement to raise taxes; eliminating the 2/3 votes requirement to pass a budget; repealing term limits; increasing the size of the legislature and having multi-member districts; and establishing regional governments) would be approved by the voters if they stood alone. Perhaps the biggest difference between a legislature and a Constitutional convention is that a convention can vote trade. Vote trading, or log rolling, is where one group of conventioneers in order to get their idea into the package, agree to vote for someone else's idea that they are indifferent to. It is how we got the U.S. Senate sharing power with the U.S. House of Representatives. Or in today's controversies, I could see Cal-Tax supporting the same-sex marriage agenda as long as the anti-Prop. 8 delegates support a 2/3 vote on taxes and fees. I will scratch your back and then you scratch mine. Whether the voters ever approve any package of any kind is doubtful, but the plan is to call the convention in 2010, rewrite the constitution in 2011, and put it to the voters in 2012.
As I considered the idea of a convention, it seems important that the call instruct the Jurors on what the problems are that need solving and maybe even ideas on how to solve them. I have yet to see any language, but I believe that the drafters of the initiative to call a Constitutional convention by initiative owe it to the voters to announce why they think the Constitution needs to be revised and what revisions should be considered first. So far, this has not been done.
***Check Your Withholding***
Kudos to the Sacramento Bee for their reminder of an important change in state tax law enacted in February. This tax hike could cost a typical couple with two kids an extra $670 next April 15. The Franchise Tax Board is warning people that if they did not adjust their withholding, instead of a refund, they may owe money.
The tax changes, adopted by the Legislature in February, added 0.25 percent to California's personal income tax rates and reduced the tax credit by $210 for each dependent claimed on a tax form. The higher rate is retroactive to January. Even if your present withholding is correct now, companies did not receive the new withholding tables until April so you may not have had enough withheld earlier in the year.
Go to the FTB's Web site, www.ftb.ca.gov (search under "Individuals" and "Plan for next year"). You can also calculate your withholding rates using Form DE 4 at the Employment Development Department's site, www.edd.ca.gov.
For those who are making quarterly estimated tax payments the challenge is similar. FTB also has a web page of advice: http://www.ftb.ca.gov/professionals/taxnews/2009/0409/Estimated_Tax_Payments_Law_Change.shtml
MISCELLANY
***Celebrate with Independence Films***
As I was planning my Independence Day festivities I was thinking about which movies best demonstrate the cause of freedom that we celebrate on July 4th. The list of nominees was long, but here I recommend several, and it might take you longer than a hot Fourth to get through them all.
On Independence Day itself, watch two classics about the fight for American freedom: "1776" and "The Patriot." The first is a musical comedy written by a high school teacher who was searching for some way to teach his students what they saw as boring history. The resulting Broadway hit relives the reasons for the Revolution, the contentions in the colonies over economics and slavery, and way that colorful personalities changed the course of history. The second stars Mel Gibson and is just one of his fantastic films about the sacrifices, nobility and purpose of fighting for freedom.
For another terrific Mel Gibson freedom movie, check out "Braveheart." While there is room to be critical about its historical accuracy, the movie depicts a man willing to defend and die for his home, his family, his country. Gibson also stared in "We Were Soldiers," which is one of the few films that does not treat U.S. soldiers in the Vietnam was as murderers or lunatics. Instead, it delivers a much more accurate view of war in which men are willing to do their duty, not just for the cause of country, but for the life of their buddies next to them. Even voicing the rooster in "Chicken Run" gives Gibson the opportunity to espouse the natural call of freedom that beckons all mankind.
There are many, many "war" movies that make important points about fighting for freedom. I have written before about the best war films < http://www.billleonard.org/Vets_Day_Movie_Recos.php >, but among the highlights for this purpose: "The Green Berets," "Bridge on the River Kwai," "To Hell and Back," and "Tora Tora Tora."
To broaden the freedom theme, consider a few excellent films that examine the struggle against tyranny. "Amistad" shows slaves fighting for their individual freedom, but also deals with complex legal issues of conflicting nations' laws and the Supreme Court decision that granted these brave men their freedom. A more family-friendly version of resistance to totalitarianism comes in "The Sound of Music," which is lauded for its show tunes often at the expense of its true-life tale of escaping the Nazis. A classic of the Reagan-era, "Red Dawn" is kitschy, but makes the valuable point that America is not just a place, but an idea worth fighting for and that this is what the Cold War was about. "Exodus" is as example of people who would cross oceans for their freedom and with Israel in the headlines daily it is also a reminder that the fight for freedom never stops.
Freedom is not just the absence of tyranny; it also involves respecting the rights of others and the rule of law. Pull out the classic "To Kill a Mockingbird" to drive those points home. To emphasize the supremacy of private sector ingenuity over government bureaucracy, recall some laughs with "Ghostbusters." To remind yourself of the value of hard work and positive attitude, as well as to counter the negativity that has come to be associated with the word "greed," try "The Pursuit of Happyness." Bill Murray makes a viewer take another look at the crucial role of self-determination in the comedy "Groundhog Day," and shows us that no matter what your situation, you have the power to make yourself and those around you better. In "Gran Torino," Clint Eastwood takes on the political correctness that runs counter to freedom. Finally, the grand meaning of the freedom theme in "The Lord of the Rings" trilogy is best demonstrated in this exchange (chosen by Andrew Leigh in his write-up of the series for National Review's "The Best Conservative Movies"): Frodo laments, "I wish none of this had happened," to which Gandalf replies, "So do all who live to see such times. But that is not for them to decide. All we have to decide is what to do with the time that is given to us."
QUOTE OF THE WEEK ANSWER: Andrew Jackson
BOE AND LEGISLATIVE DATES
June 30- July 1, 2009 --- Board of Equalization meets in Culver City.
July 4, 2009 --- Independence Day
July 10, 2009 --- Last day for policy committees to hear and report bills (J.R. 61(a)(10)).
July 17, 2009 --- Summer Recess begins upon adjournment, provided Budget Bill has been passed (J.R. 51 (a)(3)).
July 21, 2009 --- Board of Equalization meets in Sacramento.
August 12, 2009 --- Board of Equalization meeting with county assessors.
August 17, 2009 --- Legislature reconvenes from Summer Recess (J.R. 51(b)(3)).
August 28, 2009 --- Last day for fiscal committees to meet and report bills to the Floor (J.R. 61(a)(11)).
August 30 - September 2, 2009 --- Board of Equalization meets in Sacramento.
August 31 - September 11, 2009 --- Floor session only. No committee may meet for any purpose (J.R. 61(a)(12)).
NOTABLE DATES/ HISTORY
June 29, 1767 --- The governor of Baja California, Gaspar de Portolà arrived in Alta California (now the State of California) with his “Sacred Expedition” designed to reinforce the Spanish claim to the territory. With the expedition also came a detachment of priests, including Father Junipero Serra, who founded the first mission in San Diego after he took sick and was left behind. Searching for Monterey Bay, Portolà failed to recognize it when he reached it, and thus continue wandering northward. The expedition traveled as far as San Francisco before turning back.
http://en.wikipedia.org/wiki/Gaspar_de_Portol%C3%A0
June 29, 1953 --- The City of Costa Mesa was incorporated.
http://www.ci.costa-mesa.ca.us/
June 30, 1910 --- Estelle Reel (R-WY), the first woman in the nation elected to statewide office and first woman confirmed by U.S. Senate to a federal post, retired after 12 years as U.S. Superintendent of Indian Schools.
http://nwda-db.wsulibs.wsu.edu/findaid/ark:/80444/xv76628
June 30, 1864 --- William C. Ralston organized the Bank of California in San Francisco. With initial capital of two million dollars, it soon came to be the premier financial institution of the West Coast and a crucial source of loans and capital for California entrepreneurs. However, Ralston over-speculated and was injured financially as the Comstock Lode, in which he was heavily invested, began to run dry. The bank was forced to close in 1875 after a run on its vaults. Ralston drowned the next day, apparently of a stroke, while swimming in San Francisco Bay.
http://www.zpub.com/sf/history/ralston.html
June 30, 1903 --- The City of Oxnard incorporated.
http://www.ci.oxnard.ca.us/Default.aspx?DepartmentID=22
July 1, 1991 --- President George H. W. Bush appointed Clarence Thomas to the U.S. Supreme Court.
July 1, 1775 --- San Juan Manuel de Ayala, captain of the San Carlos, entered San Francisco in a small boat, being the first European to sail upon the bay. The expedition named a variety of San Francisco Bay landmarks, including Alcatraz (Spanish for pelican), Angel Island and San Pablo Bay.
http://en.wikipedia.org/wiki/Juan_Manuel_de_Ayala
July 1, 1846 --- California Republic forces led by John C. Frèmont launched a raid against the San Francisco Presidio, spiking ten cannon. The raid, although somewhat petty, was part of the disorganized campaign of Bear Flag rebellion irregulars, who would soon be reinforced by American naval and ground units following the American declaration of war on Mexico.
July 1, 1863 --- The Union army took heavy losses on the first day of the Battle of Gettysburg, considered the pivotal battle in the American Civil War.
http://americancivilwar.com/getty.html
July 1, 1898 --- Theodore Roosevelt lead a group of volunteers known as the Rough Riders in their charge on San Juan Hill in Cuba at the beginning of the Spanish-American War.
http://www.loc.gov/rr/hispanic/1898/roughriders.html
July 2, 1853 --- Dancer Lola Montez married Partick P. Hull, at the Mission Dolores with the governor and mayor of San Francisco in attendance. It was the third marriage for Montez, who had engaged in previous liaisons with the likes of composer Franz Liszt, author Alexander Dumas and Ludwig I, King of Bavaria. The marriage with Hull quickly dissolved, but Montez by then was established in the California gold fields. Lola was the most famous of Gold Rush entertainers, known for her lurid performances of the pseudo-flamenco “spider dance.” She contributed to the colorful, if bawdy, culture of the Gold Rush, touring the Sierra and settling in Grass Valley. However, her appeal waned, and she died impoverished in New York at the age of 42.
http://www.abacom.com/~jkrause/montez.html
July 2, 1881 --- President James A. Garfield, waiting for a train in Washington, D.C., was shot by Charles Guiteau, a frustrated office-seeker. Garfield died of his wounds on September 19.
http://americanhistory.si.edu/PRESIDENCY/3d1d.html
July 2, 1862 --- U.S. Rep. Justin Morrill (R-VT) won passage of Land Grant Act, establishing colleges open to African-Americans, including such students as George Washington Carver.
July 3, 1986 --- At ceremony rededicating the Statue of Liberty, President Ronald Reagan honored immigrants from all nations who come “to build a new world of peace and freedom and hope.”
July 3, 1888 --- The City of Oceanside was incorporated.
http://www.ci.oceanside.ca.us/
July 3, 1873 --- The Los Angeles City Council passed the first franchise ordinance to D. V. Waldron to construct a street railroad in the city. The railroad was horse drawn, with trips every 90 minutes. The fare was ten cents. The railway would be running over 813 lines by 1921, but the rise of car culture in Los Angeles would dramatically reduce the demand for public transpiration.
http://www.erha.org/railwayhis.htm
July 4, 1776 --- The Continental Congress formally voted to approve the Declaration of Independence, in which the American colonies proclaimed their separation from Britain. They had voted in June to ask a committee to draft the document and had voted in the Committee of the Whole on July 2d to adopt the Declaration of Independence as amended.
http://www.loc.gov/rr/program/bib/ourdocs/DeclarInd.html
July 4, 1850 --- A small group of miners declared their boomtown an independent republic, the State of Rough and Ready. Founded in 1849 by a group of Mexican-American War veterans, and named after President Zachary Taylor (whose battlefield moniker was “Old Rough and Ready”), the town's population was swelled by hoards of miners during the Gold Rush. In the summer of 1850, as the debate over California statehood was mired in congressional controversy, E.F. Brundage published a manifesto for Rough and Ready nationhood. Despite a following of over one hundred people, Brundage's idea was appropriately laughed down. The end of the Gold Rush brought an end to the prosperity of Rough and Ready, and the Republic faded away into a ghost town.
http://www.aboutnevadacounty.com/cities/Rough&Ready/
July 4, 1933 --- Work began on the Oakland Bay Bridge.
http://www.dot.ca.gov/hq/esc/tollbridge/SFOBB/Sfobbfacts.html
July 4, 1867 --- Republican Party was established in Georgia with a radically-integrated state convention.
July 5, 1801 --- Birth of David Farragut, Tennessee-born Hispanic appointed by President Abraham Lincoln as the first U.S. Navy Admiral.
July 5, 1851--- A mob in Downieville lynched a woman suspected of murder, taking to an extreme the callous frontier justice prevalent during the Gold Rush. The woman, a prostitute of Mexican descent named Juanita, was executed after she killed a drunken miner who assaulted her. Although what little testimony given during the farce trial suggested that she acted in self- defense, the intoxicated mob was intent on a hanging and was probably motivated in a large part by anti-Hispanic prejudices.
http://findarticles.com/p/articles/mi_qa3736/is_200701/ai_n19434886/pg_15
July 5, 1852 --- The City of Santa Clara incorporated.
http://santaclaraca.gov/
GENERAL TAX INFORMATION
For answers to your general tax questions, call the Board of Equalization information center. Customer service representatives are available to help you from 8:00 a.m. to 5:00 p.m. Pacific time, Monday through Friday (except state holidays).
Toll-free number: 800-400-7115
TDD service for the hearing impaired
TDD phones: 800-735-2929
Voice phones: 800-735-2922
To reach the Taxpayer Rights Advocate’s office for assistance with any BOE issues, see http://www.boe.ca.gov/tra/tra.htm, or call toll-free 1-888-324-2798.
HOW TO CONTACT ME
Bill Leonard, Member
State Board of Equalization, Second District
Email: bill.leonard@boe.ca.gov
Northern California Office:
400 Capitol Mall, Suite 2340
Sacramento, CA 95814
Telephone: (916) 445-2181
Fax: (916) 327-4003
Southern California Office:
4295 E. Jurupa Ave., Ste. 204
Ontario, CA 91761-1428
Telephone: (909) 937-6106
Fax: (909) 937-7044
SUBSCRIBE INFORMATION
To subscribe, or to subscribe a friend, go to www.billleonard.org, click on Subscribe, enter the eddress and then click Send Request.
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