What the 'Rich' pay in Taxes

"We often hear about raising taxes for the rich, to help with budget needs. Let's take a look at what the 'rich', and other 'well-to-do's', pay in income taxes (from the Sacramento Union Opinion Section, 11-23-07). This is from 2005 IRS statistics; top 1% of taxpayers contribute 39% of all fed income taxes, top 5% contribute 60% of all federal income taxes, top 10% paid in 70%. All told, the top earning 50% of taxpayers paid 97% of all federal taxes.

OK, Who wants to make the next federal tax increase proposal?

Housing – Who Are We Kidding?

Isn't it interesting that as California state birthrates have basically not gone up for years; the size of houses being built during that same period have grown bigger and more expensive. The physical size of houses has more than doubled since the 1960's, at the same time that family size has decreased (for original California residents). It's like many homes were built to entice people to move up to bigger and fancier dwellings, whether they needed it or not, rather than build new homes geared to entry level or family size needs.And yes, there is an entry level need. Most immigrants coming into the state need low cost, affordable housing. Yet most new housing is above their income level. It's sort of like building Hummers when gas is almost $5.00 a gallon!

What is a Veteran?

A “veteran”, whether active duty, discharged, retired, or reserve – is someone who at one point in his/her life, wrote a blank check made payable to the “United States of America” for an amount “up to and including his/her life”. That is honor, and there are way too many people in this country today, who no longer understand that fact. (Provided by former Executive Director, and past president of the Taxpayers League).

More on Utilities

In addition to the many issues brought to light, the Taxpayers League has its own issue. A recent review by one of our member’s own utility bills, showed that the City may be charging over 12% utility tax, instead of the lawful limit of 11% that they are supposed to charge. When brought to the City's attention, the response was that the tax is based on the total bill. The League’s position is that the City is charging a tax on the total bill, which already includes the 11% fee. This means a tax on top of the existing tax!

Stay tuned for additional research on this issue, as we wait for all the other utility issues to get cleared up.

No August Meeting

Remember, there is no League meeting during the month of August. The next League Board meeting will be September 21, 12:05pm at Zigatos restaurant, at the corner of Auburn Blvd and Fulton Ave (inside the Clarion Hotel).

When Dues are Due!

Also, when paying your annual Taxpayer League Dues, please look at the New Dues Rates on page 7. Most dues have increased beginning July 2008

High Speed Rail = High Speed Deficit

During the past few years we've all heard the story about the 'High Speed Rail Project', and what a good thing it will be for the State of California. Don't you believe it!! There are several reasons for not pushing ahead with the hi-speed program – particularly right now because of the budget deficit situation. Here are some things to consider:

The Change is too Dramatic - Yes, lets do the medium speed trains first, building demand and statewide ridership, so that later on there is a solid support base for the hi-speed program. There is already a large, mostly untapped market for a good California rail system. But it’s not getting the attention it deserves. European and Japanese train systems didn't begin where the U.S. is right now, and then jump into the high-speed rail networks they have today. The hi-speed trains have been an evolutionary process – built upon years and years of successful (frequent and reliable) train service, which allowed for the upgrade to the higher speed systems of recent years.

Medium Speed Trains – We have them now; why not make better use of them. Yes, current train equipment is capable of going 110mph, but it doesn't happen. Here's why:

• Grade Crossings – This is probably the single biggest obstacle to improving this States train service. Grade crossings not only slow down train service (both freight and passenger), but contribute significantly to accidents – sometimes very serious accidents. This is not a minor expense, but it needs to be done whether we build medium speed or high-speed rail. The City of Chicago began eliminating rail grade crossings in '93 – 1893 that is. If bond funds are going to be raised, this would probably be one of the most useful places they could go.

• Signaling Systems – Train signaling systems have become very sophisticated over the years, and as a result very effective. An expansion of the States train service will require a significant upgrading of its signaling system. But this can be accomplished with existing technology. This would likely require some public funding to assist the railroads.

• More Trackage Needed – Several decades ago there was a lot more train trackage in the state than there is today. At some point in the past, the U.S. Government decided to tax the train companies on the amount of trackage being used. Not surprisingly, the railroads pulled out almost all trackage not needed for the operation of their freight trains (this was well before Amtrak). Given the rail passenger demand of today, a lot more trackage is needed to just get needed reliability for passenger trains. A good example is the Capitol Corridor. It provides very good train service between Roseville/Sacramento and the Bay Area. But frequently passenger trains are delayed because of having to wait for freight trains. This problem could be totally eliminated if there was a three or four track right-of-way to separate passenger rail from freight rail.

• Financing – As was recently pointed out in the Business Journal, California’s' bond rating is the second lowest in the nation; only better than flood devastated Louisiana. Can California really afford almost $10 billion in bond indebtedness this November, with another $30 billion down the road to complete the project? Think of it this way – paying off those bonds means dollars coming out of taxpayer’s pockets - your pockets and purses!

Conclusions - Passenger rail ridership has grown considerably in California over the last ten years. With the recent increase in gas and diesel fuel costs, train ridership is at capacity in some California corridors. If train routes were expanded and frequency and reliability were improved - initially with just medium speed trains - then California would be taking the realistic first steps in getting high speed trains for its future. And saving a few billion dollars along the way.

Niello News
By Assembly Budget Committee Vice-Chair Roger Niello

Budget Update Once again, the State of California begins the new fiscal year without a budget plan in place.  As we work toward agreement on a final budget plan, I wanted to update you on the latest budget news.

The two-house Budget Conference Committee, of which I am a member, should conclude its work in reconciling the differences in the budget plans of both houses this week.  Unfortunately, the conference committee is largely a pro-forma exercise that leaves the larger issues outstanding and up to negotiations amongst the legislative leadership and the Governor.  This year is no different, and the Conference Committee is leaving room for the potential for a tax increase of up to $12 billion, against the objections of Republicans.

Last month, I joined my Republican colleagues to unveil the long-term budget reforms that Republicans believe will fix California 's broken budget system once and for all.  Our plan establishes a strict spending limit and creates a rainy day fund that will end the budget madness that has plagued our state in recent years.  Most importantly, it would protect Californiafamilies from costly tax increases.

California families cannot spend more than they have and the state needs to live by the same rules.  In order to end the state's ongoing budget problems and bring spending in line with revenues, we must require the state to live within its means by adopting a spending limit that bases spending on population growth and the rate of inflation.  In addition, the state needs to establish a rainy day fund that will allow us to save money to be used only in times of real need – such as a fiscal crisis or natural disaster. 

Under this budget reform plan, as the economy rebounds and revenues increase, the Legislature will be forced to prioritize spending to stay within the spending limit.  Any additional revenues above and beyond the spending limit will go into the rainy day fund and be used to pay off state debt.  Once the reserve reaches the maximum amount or the debt is repaid, any remaining dollars will fund temporary reductions in the state sales tax.

If the Legislature approves and the Governor signs a budget this year without any long-term budget reform, we will have missed an opportunity to bring our state's finances under control for the longer term and will likely continue to have budget problems in subsequent years. We will certainly work to adopt a budget as soon as possible, but as I've said before, an on-time budget is not necessarily a good budget.  I intend to work for what is best for California now and in the future.

New Cell Phone Law

You have been reading about it in the paper, watching stories about it on the nightly news, and undoubtedly seeing postings about it on local freeway signs. As of July 1 st , two new laws regulating the use of cellular phones while driving take effect. The first law prohibits the use of a cell phone while driving for motorists who are 18 years of age or older unless they are using a hands-free device. The second law bans the use of cell phones as well as hands-free devices for all motorists under the age of 18. Please note that it is not illegal to use a cell phone to contact an emergency provider such as a law enforcement agency, medical provider, or a fire department. Motorists with questions about these new laws can find additional information at the California Highway Patrol .

Lower your Property Taxes Now!

Over the past year, the values of home in the Sacramento area has significantly dropped. Pursuant to Proposition 8, individuals who have had their home decline in market value are eligible to have their home reassessed and are entitled to a temporary reduction in property taxes.

You may have received a letter in the mail from a company offering to help reassess your home for a fee. But you don't need to hire a professional or pay a fee to do this! In fact, you may be eligible for a reassessment that could lower your property taxes and all it takes is a form and/or a phone call to have your home reassessed!

Both Sacramento and Placer county assessors are available to help you reassess your home.  Each county assessor's office is offering information to help you lower your property taxes! To contact your county assessor, please visit the link below:

Sacramento County Assessor :

You can check the value of your home on this webpage. If your home is not on the list, fill out a ''Request for review'' form and return to the assessor's office.

Placer County Assessor: Fill out a "Decline in Value Review" form and return to the assessor's office. Please note:This form will be posted at http://republican.assembly.ca.gov in mid July.

LETTERS TO THE LEAGUE

We seek “Letters to the League” from Members concerning projects and issues on which we are working, along with recommendations on those we should look at. Letters may be edited and republished in any format, primarily in the interest of available space. Send letters, faxes, or e-mail to the Sacramento County Taxpayers League. Our e-mail is info@sactax.org, our telephone number is 916 399-5600, and our address is:

1620 35th Ave. Suite K
Sacramento, CA 95822

EXECUTIVE DIRECTOR'S MESSAGE

Cheers

To Assemblyman Roger Niello (Vice Chair of the Budget Conference Committee), for his continued tough stance on budgetary issues. This is not an easy position to take, given that the majority party continues to push for unspecified new higher taxes – refusing to consider any significant budget reductions. Keep up the good work sir; we support you.

The Taxpayers League continues to wonder how the majority party can continue to spend more taxpayer dollars on a daily basis, than it actually takes in. What kind of an example is this for the future leaders of our state to be faced with?

Jeers

Bob Blymyer

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