Tag Archives: tax refunds

Today Rome Begins To Burn

We’re hearing that there could be a budget vote as early as tomorrow, although with the Big Five meeting today, that doesn’t seem physically likely, and the AP says no deal has been reached.  Nevertheless, according to Greg Lucas:

Allegedly the spending reductions – and tax increases – have been agreed to and the focus of continuing budget talks is the shape of the so-called “economic stimulus” legal changes sought by Gov. Schwarzenegger and his GOP allies.

Those changes, such as relaxing state environmental review of less than a dozen highway projects and allowing more outside engineers to design such projects, having been a sticking point for the Republican governor since last year when he criticized – and this year vetoed – a Democratic budget plan for not doing enough to boost the economy.

The new taxes are said to include a half-cent boost in the sales tax, which generates roughly $4 billion annually, and a return of vehicle license fees to 2 percent of a vehicle’s value. At 2 percent, the license fees, much of which are deductible on federal taxes, would generate $6 billion in new revenue for the state – and increase over time.

Returning the VLF to a historically consistent number would be poetic for a failed governor who based practically his whole campaign on reducing it and breaking the state in the process.  

What happens in between the taxes and the spending is going to be a key.  Whether the GOP is fighting old battles by trying to invalidate past environmental laws, or whether they are demanding a state spending cap, those details matter.  Dan Walters thinks that a “carefully written spending cap with realistic emergency provisions” could work in a swap for eliminating the 2/3 budget requirement, but when you’re adding emergency measures and writing it so carefully, you might as well raise enough revenue to pay for services people desire and be done with it.  Spending caps don’t work.

In the meantime, while these details are hashed out, citizens are paying the price, as this week California begins to stiff creditors and defer payments to individuals and businesses.

Wendy Hansen, a 52-year-old single mom in Monrovia, says she cannot afford a delay in her anticipated state income tax refund of $1,800.

Without the check, Hansen said, she will have to put off debt payments, long-needed repairs on her house and treatment for a back problem that she believes has been aggravated by stress over finances.

An estimated 2.7 million Californians expecting income tax refunds this month won’t receive them for now, because the state’s prolonged budget impasse has emptied its treasury.

“It’s horrendous,” said Hansen, an office manager for a doctors’ office. “I’m someone who counts on that refund every year to make ends meet.”

This will disproportionately hit those how make too little money to owe taxes and expect their entire withholding to return to them, as well as those expecting public assistance payments.  In other words, the least of society.

Who in Sacramento will speak for them?