Taxable Talk

The Orange County Transportation Authority unanimously voted yesterday to ask the Board of Supervisors to put a 30-year extension of Measure M, Orange County's 0.5% sales tax that funds transportation improvements, on the November ballot. Given that all fives supervisors are on the OCTA board, approval seems certain today.

The current Measure M expires in 2010. About $4.2 billion will have been raised over the life of the measure. Improvements made under Measure M include the widening of the Santa Ana Freeway (Interstate 5) from three lanes in each direction to six from the El Toro Y to the Los Angeles County line, widening of the Garden Grove Freeway, and major improvements at the El Toro Y (the junction of the Santa Ana Freeway and the San Diego Freeway (Interstate 405)).

The extension targets specific transportation improvements. One target is widening of the Riverside Freeway (Route 91) through the Santa Ana Canyon. Local commuters know that this freeway is usually bumper to bumper every weekday despite previous widening of the road and the toll lanes that run down the middle of the freeway.

In order for the measure to pass, it must receive two-thirds of the vote in November. Supporters, besides the Board of Supervisors, include the Orange County Business Council and the Automobile Club of Southern California. The measure still faces a tough fight, given most voters anti-tax stance. We'll keep you updated as November approaches.

News Story: Orange County Register

Arco Arena is the home of the Sacramento Kings of the NBA. The 442,000 square foot arena opened in 1988. But the owners of the Kings, the Maloof brothers, want a brand new arena, so that they can have more revenue from the team.

And like most businessmen, they'd prefer others pay for it. So through a complex deal (reported here in the Sacramento Bee), the sales tax for Sacramento County would be increased from 7.75% to 8.00% for 15 years to pay for the arena.

But two groups must approve the measure. First, four of the five Supervisors on the Sacramento County Board of Supervisors must approve that the measure go before voters this November. Then, voters must approve the measure; through allocating some of the funds to general usage the measure requires just a majority vote rather than the state-mandated 2/3 vote for most tax measures.

The tax would raise over $1 billion; of that, a little less than half would be used to build a new arena. The Maloofs would pay $4 million in rent for 30 years and contribute $20 million to a capital improvements fund.

But there's opposition in California to publicly funded sports complexes. Sacramento Assemblyman Dave Jones is rushing home from a vacation to campaign against the project. It will be an interesting battle in Sacramento, with the Maloofs, their radio station (KHTK 1140 AM), and private developers eying the current Arena for redevelopment, versus an unusual combination of taxpayer organizations and liberals who don't like government funding of arenas.

Pity the smokers in California, home of one of the US's top cigaratte tax rates. Why not buy the cigarettes over the Internet and save on the tax?

That's not a bad idea, except that the Board of Equalization, California's watchdog agency for cigarette taxes, is auditing out-of-state companies shipping cigarettes into California. (The Federal Jenkins Act allows California review online vendors' invoices.) And they're sending bills to Californians. The BOE estimates that it will collect $52 million from California smokers.

Hat Tip: Kerry Kerstetter (The Tax Guru)


News Story: Sacramento Bee

If you'd ask John Q. Public his opinion on taxes, the answer you would receive would probably be the title of this post. And politicians who forget this are usually in for a surprise.

This November Californians will vote for Governor. On one hand, current Governor Arnold Schwarzenegger has pledged no new taxes. Meanwhile, his Democratic opponent, Phil Angelides, pledges new taxes, or cuts in what his spokesman calls "corporate tax loopholes."

One of those loopholes is a 5% sales tax exemption on liquid petroleum gas (lpg), farm equipment, and diesel fuel. Angelides wants to close this loophole. And surprise, farmers aren't happy about this.

Benny Jefferson told the Monterey Herald, "Farming is good. Tax relief is good. Taxes are bad. Phil Angelides is disrespectful."

This isn't good news for Agnelides. Another farmer, Wayne Gularte, stated in the same story, "[This tax change] certainly could put me out of business."

Angelides may want to study California's election history. Close elections are invariably decided in the agriculturally rich, politically conservative Central Valley. And the major industry of the Valley is agriculture.

Contrast Angelides with the Governator, who told the Sacramento Bee, "I totally rule it out. I will not raise taxes." Polls currently show Schwarzenegger ahead 44% to 37%.

News Story Here

According to this news story, California will soon unveil a $600,000 ad campaign to fight back at Nevada's attempt to lure California businesses. California, according to the new ads, is, "...the place where the smartest companies are located."

While this may be true—after all, Silicon Valley is in California—it's going to be a hard sell. Costs in California compared to neighboring states are noticably higher. Whether California can battle back remains to be seen.