Taxable Talk

The State Senate finally approved a budget late today. It goes to the Governator for his signature (he has said he will sign it) and for his "blue pencil" (the line item vetoes).

For more details on what this budget really means, go to the Flash Report. You will find State Senator Tom McClintock's commentary and State Senator Dennis Hollingworth's commentary. Note in particular what Senator Hollingsworth said: "[The budget] is still one that will result inevitably in a near $5 billion deficit next year...Further, we all need to begin addressing next year’s looming fiscal problem--now, and not wait until we are so far into the budget that our options to balance it become fewer and more difficult." Those are words to live by, but I don't expect them to be heeded in Sacramento.

Today in San Diego a federal judge will hear arguments in a case between the Rincon Indian tribe and the State of California. The battle is over whether or not California negotiated in good faith over a compact with the Indian tribe for more slot machines for the Rincon Indian's casino (north of San Diego).

An expert from the state estimated that the 500 additional slot machines proposed for the tribe's casino would bring in just under $40 million a year. The tribe argues that California wanted about $38 million of that as the fee for the allowing the additional slot machines. The tribe argues that the state did not negotiate in good faith, and that the $38 million would be a "tax" rather than a fee.

On the other hand, California argues that they have negotiated in good faith; that they have reached agreements with numerous other tribes, including the neighboring Paula tribe; and that the additional machines would bring in money for the Rincon tribe.

A decision will likely be announced in a few weeks.

News Story: Here.

I've been gone for two weeks (one week on vacation, one week in Florida on business), and California's budget situation is unchanged. The GOP wants a balanced budget, an agreement that Attorney General Jerry Brown won't sue developers over global warming issues. Democrats aren't budging, hoping that they can convince two GOP State Senators to change their positions. Otherwise, the budget is anything but balanced.

Meanwhile, the Los Angeles Times proclaims in an editorial, "You've Already Won, GOP." The Times states that the budget approved by the Assembly is a win for the GOP. It is, when compared with the original Democratic proposal.

But overall, wouldn't it be in California's best interest to have an actual balanced budget, and an Attorney General who helped California's economy grow rather than to use resources on wasteful lawsuits? California, in my opinion, needs a budget that's good for all of the state's residents, including our children (and grandchildren); they are the ones who will be paying back the debt we have been racking up over the past decade. It's time for California to bite the bullet and balance the budget.

For those of you who wish to hear more on this, the Exchange Club of Irvine will be hosting State Senator Tom Harmon (R-Huntington Beach) this Tuesday. Join us at noon at the Irvine Marriott (19000 Von Karman, just south of the 405 Freeway); I'm sure the budget impasse will be front and center in Senator Harmon's talk. If you are coming, please send me an email so that we can have enough seats for our visitors.

The passage of AB361 in California has modified California's Probate Code (§902). Beginning July 1, 2008, estate representatives must notify the Franchise Tax Board when an estate is opened for probate. Current law requires notification within 90 days by an estate's representative only if a claim from the FTB is deemed "likely."

The change in the law does not change the FTB's ability to file claims against an estate.