Contributors
Bill Leonard - Contributor

Bill Leonard is a Member of the State Board of Equalization

A Week Under the Dome
On the Ballot, Workers Comp, Tax Delinquents...
[Bill Leonard] 2/19/04

ON THE BALLOT

How I Voted

I filled out my absentee ballot this week and wanted to share with Leonard Letter readers how and why I voted on the statewide ballot measures. Prop. 55: I voted “YES.” This is part of the regular schedule of school and college construction bonds. Unlike debt money, these funds are spent immediately and gone. This money will build needed schools that will last for years to come. Prop. 56: I voted “NO.” Despite the proponents' attempts to convince me that this measure would reform the budget process and make legislators accountable, I know better. This measure makes it easier to raise taxes, and the tradeoffs for an “on-time” budget are not worth it. I read a great quote to that effect in the Inland Valley Daily Bulletin from Janice Rutherford, Mayor Pro Temp in the City of Fontana: “I‚d rather have the paradox of predictable uncertainty than guaranteed new taxes.” Prop. 57: I voted “YES.” This measure does not raise taxes, but allows us to refinance and put behind us the Gray Davis deficit. Prop. 58: I voted “YES.” This companion measure to Prop. 57 gives Governor Schwarzenegger the tools he needs to prevent another Gray Davis budget disaster. It mandates a balanced budget and prevents future borrowing.

ISSUE FOCUS

Jobs Climate Sorrows

There are 13 days left for the Legislature to meet the Governor’s deadline for serious workers‚ comp reform. If any legislators doubt the seriousness of this particular situation or the state‚s job climate in general, I would invite them to read a report written by Michele Nash-Hoff about San Diego County‚s industry. Ms. Nash-Hoff works for ElectroFab, a company whose market in San Diego County is original equipment manufacturers that utilize sub-contract manufacturing services. The company has noticed an erosion in its customer base over the last several years, and in 2001 Nash-Hoff began keeping a list of their customers who have either closed up or moved out of state. I was frightened by the list of more than 80 companies that are no longer operating or providing jobs in California because this was an informal list by one company in one region of our state. When I multiply that by industry, by region, the devastation to California‚s economy is clear. Nash-Hoff writes, “In my 20 years of doing sales and marketing in San Diego, I have not seen it this bad. It is actually worse in some ways than the defense and aerospace recession of the early 1990's because it is more across the board… Many more companies are “hanging by a thread‚” because no one has any financial ‘cushion‚’ any more, and everyone's accounts receivable are stretched out longer than I have ever experienced. The typical 45-60 days for paying invoices is now up to 90-120 days.” For those in the Legislature who believe such stories to be Republican rhetoric bandied about solely for political purposes, I offer Nash-Hoff’s explanation for the exodus and her recipe for change: “We need major reform of worker’s compensation, a restructuring of our unemployment insurance system, lower corporate and personal income taxes, and reduced costs for energy if we want to stem the tide of companies leaving California or going out of business. In my discussions with company owners and executives, the main reasons for moving out of California have been: High cost of workmen's compensation; High cost of unemployment insurance; High cost of medical insurance for employees; High cost of energy; High cost of taxes.”

TAX CORNER

Taxes are a Laughing Matter Remember when driving schools started hiring comedians to make the experience less painful and more memorable? That same edutainment philosophy has now touched the tax world. Steve Sims, an enrolled agent with the IRS who has more than 20 years experience with state taxes, offers seminars designed to teach small businesspeople and home-based businesspeople about deductions, handling audits and settling with the IRS. He offers advice about whether a venture should be a partnership, sole proprietorship or corporation and whether you need the assistance of a tax professional, all while making you laugh. Steve has a seminar coming up on March 1st in the Sacramento area. For more information, call Steve at 1-800-656-6872 or email him at Statetaxman@aol.com.

Tax Delinquents

I was intrigued by an AP story that began, “Three Georgia state lawmakers, including the chairman of the House Ethics Committee, are on a list of delinquent taxpayers that revenue officials are posting on a Web site in hopes of shaming people into paying up.” I wondered if California might have a similar list, but I learned that the Franchise Tax Board does not publicize names of individuals who are delinquent or who fail to file tax returns. However, FTB does publicize names of individuals who face criminal charges for alleged tax crimes; to see those press releases, visit: http://www.ftb.ca.gov/aboutFTB/press/index.html

Problem Solving at Your Service

Good humor makes us laugh because it is so true to life. Hence, when someone says, “I‚m from the government and I‚m here to help,” people chuckle. However, my staff proved that to be false this week as two constituents can attest. The first positive feedback came after one of my field representatives made a presentation about the services available to taxpayers, including BoE advice letters, the Taxpayer Rights Advocate‚s Office and publications about how to keep accurate business records. An audience member afterward said, “I didn’t‚t know the Board of Equalization was here to help us˜I thought they were just here to take our money.” Another member of my staff received a grateful phone call from a taxpayer whose mother-in-law‚s bank account and home had been levied by the FTB. The mother-in-law was in a nursing home and the caller and her husband were on an extended vacation, trying to handle the stressful situation by phone. Turns out the 1982 taxes due were for her husband and his previous wife not the woman who was now being dinged. My staff spent hours on the phone with the FTB’s Taxpayer Advocate's office to have the levies and liens removed, delete Social Security number from the FTB account, and begin informal settlement talks. Neither of these situations is unusual my staff and I provide this kind of assistance to taxpayers dozens of times a week. However, the gratitude expressed this week was special and worthy of sharing.

§