THE LEONARD LETTER
A weekly electronic newsletter
from Bill Leonard, Member
State Board of Equalization
June 16, 2003

“A house divided against itself cannot stand.”
– President Abraham Lincoln, June 16, 1858

UNDER THE DOME

***When is a Deadline Not a Deadline?***

The media made a big deal about lawmakers leaving town last week and not meeting the June 15th deadline for passing a budget. Of course, it is not news that the deadline was ignored; it has been for more than a decade. That happens in part because it is a phony deadline and therefore a phony media story. There are no consequences to the Legislature for not passing a budget by June 15th. Consequences do not kick in until July 1st. The June deadline simply gives the Governor the full 12 days he is allowed by the Constitution before he has to take action on any bill.

While we can groan about a deadline passing, we should also reflect on whether it is a reasonable deadline. The Governor proposes a budget in January that is now routinely considered dead on arrival. Indeed, most legislators do not even ponder it because they know that the real budget proposal will come in the form of the May Revise. This year, the May Revise was announced by the Governor on May 14. When I first began in the Legislature, the May Revise was merely a technical update to make sure we had the most accurate number of students, prisoners and welfare recipients before we passed the budget in June. Over the last decade though, it has gone from being an accounting reconciliation of caseload numbers to a new budget, cut from whole cloth. Indeed, this year’s May Revise included new plans for spending, borrowing and taxing. It is not reasonable to expect the Legislature to read, analyze, debate and vote on a brand new, complex budget in only a month, and should come as no surprise that they simply do not do it.

It is time we return to the days when the Governor’s January budget proposal meant something and was taken seriously. Then the Legislature will not have excuses for delaying consideration until Father’s Day looms and the press pundits come out to jeer them on.

***Overheard***

As the Dems and Reps argue about budget cuts and tax increases, an anonymous Democrat staffer was heard to say, "One way of tightening your belt is to just get fatter." So true, as any of us who have fought the battle of the bulge know. Yet, those who have been successful in their weight loss will tell you that as you practice self-discipline, it becomes a healthy habit. Would that the Democrats on the budget conference committee could learn such lessons, subject to two-thirds voter approval.

***Attack on Parental Rights***

As I mentioned last week, very few bills did not pass their house of origin by the deadline. Given the propensity of the Legislature to approve virtually everything that comes its way, kudos are due when a particularly onerous bill is stopped. Such is the case with Assembly Bill 661 (Hancock, D-Berkeley).

Existing law—for which I fought very hard—prohibits public schools from giving students any test, questionnaire, or survey with any questions about a student’s or family’s personal beliefs or practices about sex, family life, morality or religion without written consent of the parent. A.B. 661 sought to remove that ban and allow schools to ask students questions about sex. The bill was pushed by the Gay-Straight Alliance Network, Planned Parenthood, the ACLU and the California Safe Schools Coalition. Fortunately for parents around the state, groups like the Capitol Resource Institute (www.capitolresource.org) organized and fought to protect students. Assemblywoman Sharon Runner was instrumental in keeping this bill from passing the Assembly.

In case you are wondering what sort of questions would have been acceptable had the bill passed, consider these from the Gay, Lesbian and Straight Teachers Network’s “Heterosexuality Questionnaire.” For example:

• When and where did you first decide you were heterosexual?
• Is it possible heterosexuality is a phase you will grow out of?
• Is it possible you are heterosexual because you fear the same sex?
• If you have never slept with someone of the same sex, how do you know you wouldn’t prefer that?

Of course, in the Legislature, no bill is ever really, truly dead. If A.B. 661 comes to life again next year, Leonard Letter readers will be encouraged to join the battle.

TAX CORNER

***Facts vs. Frivolity ***

Taxpayers who file tax appeals with the Board of Equalization know that I will always listen carefully to the taxpayer's arguments, and will attempt to see the facts through the taxpayer's eyes. This does not mean, however, that I will always be sympathetic to a taxpayer's argument.

Cases heard this past week provide examples. One taxpayer boasted that he had not filed a tax return since 1983. He submitted a thick stack of arguments and citations that defy logic and which have been rejected many times in the past by this Board and by both federal and state courts. For example, he argued that California's Revenue and Taxation Code does not specify that it applies "to California" because it states that it applies to "this State." He argued that, although he lived in California for the tax year in question, he had never lived in "this State." His other arguments were equally ridiculous.

This is the kind of appeal that wastes the time of the Board and its staff, and costs precious tax money to process. For this reason, the law allows the Board to assess penalties for bringing frivolous appeals. The penalty is intended to transfer the cost of these baseless appeals onto the taxpayer that abuses the system, rather than on the great majority of taxpayers that merely want to be treated with fairness. (Taxpayers who submit this kind of appeal are given prior written warning of the possible penalty. Those that choose to continue with the frivolous appeal risk having the penalty assessed.)

***Homeowner & Renter Assistance***

Today the Franchise Tax Board will begin mailing Homeowner & Renter Assistance (HRA) booklets. For the first time, both homeowners and renters claims will be in the same booklet, though homeowners will still complete Form 9000 and renters must still file Form 9000R. A filer’s total household income for 2002 must have been $37,676 or less. The maximum amount of assistance available is $472.60 for a homeowner and $347.50 for renters. These rebates are available to people who are 62 or older, blind or disabled. Homeowners who meet one or more of those criteria must have owned and lived in their home at the end of 2002, meet the income limits, and be a U.S. citizen, designated alien, or qualified alien when the claim is filed. For renters, they must have paid $50 or more in rent on qualified property. (For example, some nonprofit and government housing does not pay property tax so renters there are not eligible.) The filing period is July 1 through October, though the FTB will accept 2003 claims though June 30, 2004. If you do not received a form through the mail before July 1, 2003, call the FTB toll-free at 800-338-0505 or go online to www.ftb.ca.gov/individuals/hra/index.html.

ISSUE FOCUS

***Stuck in Traffic***

Californians consistently rank transportation as one of the top three or four issues facing the state. That is no surprise considering that, according to the U.S. Census, On average, Californians spend 27.7 minutes per day commuting to work. The counties that have the most resident working in another county are: San Benito (48.5%), El Dorado (44.9%), and Yuba (43.9%). Humboldt (2%), San Diego (3.5%), and Del Norte (5.9%) counties have the lowest percentage of residents commuting outside county lines for work. Placer (10.1%), Marin (10.7%), and Modoc (10.7%) counties have the lowest percentage of people carpooling to work. The three counties with the highest percentage of people using public transportation are San Francisco (31.1%), Alameda (10.6%), and Marin (10.1%). Sierra (0%) and Modoc (0.1%) counties have the lowest percentage of people using public transportation. Residents of Modoc (13.4 minutes), Del Norte (14.8 minutes), and Inyo (15.2 minutes) spend the least amount of time commuting to work. On the other hand, Calaveras (34.5 minutes), Contra Costa (34.4 minutes), and San Benito (33.7 minutes) residents spend the most amount of time commuting to work.

MISCELLANY

***Three More Words to Know***

Each week, the Leonard Letter features a few of the words from a list of 100 words that every high school student should know. The full list may be viewed at

http://www.houghtonmifflinbooks.com/booksellers/press_release/100words/.

4. Acumen—quickness, accuracy, and keenness of judgement or insight. No one could accuse the California Legislature of handling the state’s budget with great acumen given its tardiness and inaccuracy.
5. Antebellum—belong to a period before a war, especially the American Civil War. During the antebellum, the U.S. government was funded primarily by tariffs, but after the Civil War, the pressure for an ongoing income tax grew.
6. Auspicious—attended by favorable circumstances, marked by prosperity or success. If the Legislature would pass real workers’ comp reform and the Governor would reign in state overspending, California’s economy could be auspicious once again.

BOE AND LEGISLATIVE DATES

June 25 --- BOE meets in Sacramento.

July 1 --- Start of California’s fiscal year. The extent of interruption in government services if a budget is not passed by this date is unknown.

July 9 --- BoE meets in Sacramento.

July 11 --- Last day for policy committees to meet and report bills from opposite house.

July 18 --- Legislature’s summer recess begins upon adjournment only if Budget Bill is passed.

NOTABLE DATES/ HISTORY

June 16, 1933 --- The Federal Deposit Insurance Corporation (FDIC) is created.

June 17, 1579 --- Sir Francis Drake lands on the coast of California.

June 17, 1885 --- The Statue of Liberty arrived in New York City aboard the French ship Isere.

June 18, 1812 --- War of 1812 begins as U.S. declares war against Britain.

June 18, 1873 --- Susan B. Anthony is fined $100 for attempting to vote for President.

June 19, 1862 --- U.S. President Abraham Lincoln outlined his Emancipation Proclamation, which outlawed slavery in U.S. territories.

June 19, 1865 --- News of the Emancipation Proclamation, which took effect on January 1st, reached slaves in Texas setting off celebrations now known as Juneteeth.

June 19, 1910 --- Father’s Day celebrated for first time.

June 20, 1782 --- Congress approves Great Seal of United States and the eagle as its symbol.

June 21, 1788 --- The U.S. Constitution went into effect when New Hampshire became the ninth state to ratify it.

June 21, 1989 --- U.S. Supreme Court rules that it is constitutional to burn a U.S. flag as political expression

June 22, 1847 --- The doughnut is created.

June 22, 1970 --- President Nixon signs 26th Amendment, lowering voting age to 18.

GENERAL TAX INFORMATION

For answers to your general tax questions, call the Board of Equalization information center. Customer service representatives are available to help you from 8:00 a.m. to 5:00 p.m. Pacific time, Monday through Friday (except state holidays).

Toll-free number: 800-400-7115

TDD service for the hearing impaired
TDD phones: 800-735-2929
Voice phones: 800-735-2922

HOW TO CONTACT ME

Bill Leonard
Board of Equalization
450 N Street, MIC: 78
Suite 2337
Sacramento, CA 95814
Telephone: (916) 445-2181
Fax: (916) 327-4003

 Email to: Bill.Leonard@boe.ca.gov