Taxable Talk

Governor Schwarzenegger's health care plan has been defeated in a State Senate Committee. The Governator's plan would have forced most individuals into purchasing health insurance. It would also have introduced three new taxes.

The measure was rejected because even Democrats wondered where the money would come from given California's budget crisis. The state faces a $14.5 billion budget deficit. Proposing large new spending and more taxes in a time of monetary shortfall in an election year doesn't even fly with Democrats.

It's time to look at the last four propositions on the February 5, 2008 California ballot. Propositions 94 - 97 would allow four tribes to dramatically expand their Indian casinos in California (each proposition is for one of the four compacts involved). The casino expansion would be just for additional slot machines.

California Indian casinos have what is known as "Class 2" gaming. These slot machines (including video poker) all have a predetermined outcome once you pull the lever. And they operate on a "pull tab" basis. If there are 100 possible outcomes, once outcome #2 (say) is pulled, that outcome cannot come up again until all the other outcomes have occurred. The house advantage in these games is huge; as we saw in a Tax Court case decided this past week, it's practically impossible to be a long-term winner on these slot machines. So these additional slot machines will act as a tax on the dumb gambler.

These compacts also have quite a history. They were sent to the Department of the Interior for their approval, but some bureaucrat forgot to review the compacts. So they were automatically approved.

Meanwhile, two tribes that don't want the expansion, unions which want to unionize the workers, and anti-gambling forces got the measures on the ballot. Note that a "yes" vote on each proposition is a vote for the additional slot machines. So the measures are supported by some Democrats, some Republicans, and some tribes and opposed by some Democrats, some Republicans, and some tribes.

There is a certainty about these measures, though. No matter who wins the next stop for these propositions is court.

Even bureaucrats can eventually be persuaded that a stupid idea is stupid. The California Energy Commission announced on Tuesday that they are dropping the requirements for radio-controlled thermostats from the Title 24 regulations.

The public outcry was fairly intense; it was a subject on several Los Angeles talk radio shows. And everyone who called in—Republicans and Democrats and others—all thought the idea was bad. Chairman of the state Assembly Committee on Utilities and Commerce, Lloyd Levine (D-Van Nuys) put it well, telling the San Francisco Chronicle, "While more needs to be done to keep up with the needs of our ever-increasing population, it's not the job of the (state) to go into peoples' homes and control their thermostats."

Proposition 93 on California's February 5th ballot would change the current term limits structure. While it would lessen the overall amount of time a politician could stay in office, it would lengthen the amount of time one could spend in either the State Assembly or State Senate. The proposal was orchestrated the current Speaker of the Assembly and the current President Pro Tem of the State Senate.

Guess what—unless this measure passes they'll be termed out of office at year-end. The current dysfunctional nature of Sacramento (and how much the current leadership in Sacramento has caused that to happen) will definitely impact how I will vote on this measure. Make up your own minds and vote on February 5th.

There's a typographical error on Schedule CA for Form 540. This is the form used by Californians to adjust their income and deductions from their federal tax returns to California's.

The form mailed to California residents has an incorrect reference on side 2, line 38:

Line 38 currently reads:

38. Federal itemized deductions. Add the amounts on federal Schedule A (Form1040), lines 4, 9, 13, 19, 20, 27, and 28.

Line 38 should read:

38. Federal itemized deductions. Add the amounts on federal Schedule A (Form1040), lines 4, 9, 15, 19, 20, 27, and 28.

The instructions on page 56 of the Resident Booklet for Schedule CA (540) contain the correct line number reference.

Note that the online version of the form is correct (as are all other versions). The software that I use calculates the value on line 38 correctly.

News Story Here

Proposition 92 is one of seven propositions on the February ballot. (I just received a supplemental voters guide from the Secretary of State and my sample ballot.) Proposition 92 limits fee hikes at community colleges (what used to be called "Junior Colleges"). It also changes how California's education dollars are allocated, increasing the amount that goes toward community colleges.

Surprise, surprise: Community college leaders are for the proposition. Lining up against the proposition are the California Chamber of Commerce, the California Taxpayers' Association, and some K-12 teachers. They claim that Proposition 92 gives a "blank check" to fund community colleges, lack accountability, and California is facing a budget deficit.

Make up your own mind, and remember to vote on February 5th.

The last time I checked I lived in a (relatively) free society. But California regulators are about to make this part of the old Soviet Union.

The California Energy Commission has just issued its proposed 2008 regulations for Building Energy Efficiency Standards. While much of this 236 page book of regulations deal with items that are prosaic (e.g. joists) there's a whopper that the Commission has put in.

For new residential construction, "tThermostats. All hHeating systems shall be equipped with thermostats that meet the Programmable Communicating Thermostat (PCT) requirements of Section 112(c)." (Section 151, 9; page 207) What does this mean?

Well, for that you have to go to Section 112(c) on page 63 of the report:

(c) Thermostats. All unitary heating and/or cooling systems including heat pumps that are not controlled by a central energy management control system (EMCS) shall have a Programmable Communicating Thermostat (PCT) that is certified by the manufacturer to the Energy Commission to meet the requirements of Subsections 112(c)(1) and 112(c)(2) below:
1. Setback Capabilities. All PCTs shall have a clock mechanism that allows the building occupant to program the temperature set points for at least four periods within 24 hours. Thermostats for heat pumps shall meet the requirements of Section 112(b).
2. Communicating Capabilities. All PCTs shall be distributed with a non-removable Radio Data System (RDS) communications device that is compatible with the default statewide DR communications system, which can be used by utilities to send price and emergency signals. PCTs shall be capable of receiving and responding to the signals indicating price and emergency events as follows.

So what will happen? You have to go to page 64 to find out:

A. Price Events. The PCT shall be shipped with default price-event offsets of +4°F for cooling and -4°F for heating enabled; however, customers shall be able to change the offsets and thermostat settings at any time during price events. Upon receiving a price-event signal, the PCT shall adjust the thermostat setpoint by the number of degrees indicated in the offset for the duration specified in the signal of the price event. The PCT shall also be equipped with the capability to allow customers to define setpoints for heating and cooling in response to price signals as an alternative to temperature-offsetting response, as described in Reference Joint Appendix JA5.
B. Emergency Events. Upon receiving an emergency signal, the PCT shall respond to commands contained in the emergency signal, including changing the setpoint by any number of degrees or to a specific temperature setpoint. The PCT shall not allow customer changes to thermostat settings during emergency events.

So the bureaucrats will soon control thermostats on all new construction in California.

Now, I realize that California does have current issues with electricity, but central control and planning don't work. Many customers of various power companies voluntarily join a program allowing their air conditioners to be cycled during summer months. That's fine. And increasing prices during an emergency is fine—that's letting the free market work. But this proposal is an abomination.

Of course, most people live in existing construction and aren't impacted by these regulations. But if the bureaucrats have their ways it will only be a matter of time before existing construction will have to comply. I expect that once these regulations are implemented, they'll be required as part of the permitting process when you do major work on your home.

If you're a Californian and think these new regulations make it look like we've just moved to the Soviet Union it's time to let your legislators and the Commission know.

The California Supreme Court ruled last week that registered domestic partners have the same property tax benefits as heterosexual spouses. This means that if registered domestic partners own a home, and one inherits the home from the other, they are entitled to the same protection from a property tax reassessment as a married couple.

Several county assessors fought a decision made by a Sacramento judge in 2005, and appealed first to the appeals court and then to the State Supreme Court. They were unsuccessful.

With the Iowa caucuses tomorrow, it's time to remember that Californians will vote three times this year. We have our presidential primary on Tuesday, February 7th, our "normal" June primary on Tuesday, June 3rd, and Election Day on Tuesday, November 4th. Remember to vote each time (but unlike Chicagoans, one vote per person per election is enough).

I'll be reviewing the three propositions on the February ballot. And let's start with the easiest proposition ever to review: Proposition 91.

Proposition 91 duplicates the work of Proposition 1A (which passed in November 2006). Supporters of Proposition 91 urge a no vote. Given that its supporters want you to vote no, there's no reason to go further with analyzing this proposition.

I'll be returning to this ballot over the next two weeks as Propositions 92 and 93 aren't as easy to analyze.