THE LEONARD LETTER
A weekly electronic newsletter from
Bill Leonard, Member
State Board of Equalization
September 29, 2003

"There is no nonsense so errant that it cannot be made the creed of the vast majority by adequate governmental action." --- Bertrand Russell, English author (1872-1970)

UNDER THE DOME

***Meeting for Magan's Law***

OAs predicted, the expiration of Megan's Law to track sex offender has resulted in the Legislature reconvening today. However, only the State Assembly is returning and they have only one option: to vote yes or no with no amendments on an existing bill. You read correctly-they are just meeting to vote again on the same bill they voted on a few weeks ago. The bill extends Megan's Law, but it does not clean up the program or allow the list of sex offenders to be posted on the Internet. Without these needed reforms, the Republicans will continue to oppose the bill. It requires a 2/3 vote and the supporters of the narrow version do not have those votes so nothing will happen in today's session. Unless Governor Davis calls a Special Session to consider all options on Megan's Law, the stalemate will continue. Meanwhile if there is no action the whole law expires January 1st. I think the Republicans will stand fast for a strong anti-sex offender law.

***Taxable Sales Increase Modestly***

The State Board of Equalization (BOE) announced last week that the preliminary statewide estimates for the second quarter 2003 taxable sales show a slight increase over the actual figures for the same quarter a year ago.

The BOE estimated that California businesses completed approximately $112.8 billion in transactions subject to the sales and use tax during the second quarter of year 2003-- an increase of about 1.6 percent over the second quarter 2002 final total of $111 billion.

ON THE TRAIL

***FUD***

The frying pan or the fire-- take your pick. Governor Davis' campaign to sow Fear, Uncertainty and Doubt (aka FUD) into the recall is succeeding among the crucial independent non-partisan voter. They still do not like Davis, but FUD is worse. Last week's gubernatorial debates are producing FUD, too. Since there was no clear knock-out winner, many undecided voters seem to be leaning toward staying the course, however bad, rather than risking FUD.

I must admit my own angst in this. I am torn between wanting to replace Davis with a real Governor, preferably a conservative, or leaving him there to strangle on the vines of his own procrastinations, pratfalls and panderings. Kicking Davis out of office would send him a clear message, but allowing him to suffer the fruits of his own making would serve a certain justice as well.

***Demonizing Indians***

I, for one, think Schwarzenegger has crossed the line in making California Indians the scapegoat for all that is wrong with California. If he wants to attack bad policies there are ample radical missteps by both Governor Davis and Lt. Governor Bustamante to fill hundreds of 30 second ads. First, the Federal treaties forced on the Indians were meant to be one-sided, but it turns out that thanks to Indian sovereignty, California Indian reservations are islands of freedom where tribal entrepreneurs can invest in their own local economy, producing jobs and success. We would all be better off if other Californians had these same economic freedoms. Second, if Schwarznegger wants to define special interests as groups with undue influence in the Capitol, then Indians would be way down on the list. Previous statewide votes on Indian gambling show the support they enjoy. I would love to see a statewide vote on the agendas of the trial lawyers, the state employee union leaders, the teacher union leaders, the corporations asking for regulations that benefit only them, or the radical environmentalists.

ISSUE FOCUS

***What Happened to the California Dream?***

I am a native Californian, and like many of you I have very fond memories of a time when life was so good here with so much opportunity and easy living that it seemed like the whole world wanted to join us. It may seem like "the world" still wants to live here, but those who come may not be staying long.

A recent Forbes article, "The Real California Problem," by the publisher, Richard Karlgaard, offers an updated perspective on the decline of the Golden State. The reason, according to Karlgaard, is that California is no longer cost-competitive for providing a quality life. The article first looks at the cost of a 2,200 square-foot fixer-upper in Palo Alto: $1.2 million. Then we meet a couple who used to wake up at 4:30 a.m. for long Bay Area commutes. A few years ago, they relocated to the Bahamas to start a business and now own two homes, one in the Bahamas and one in Vermont. The cost of both together was less than the fixer-upper in Palo Alto. Another expat was a struggling small-scale printer who left the state to set up an internet-based printing co-op in Montana. He now has a home on 22 acres, with a perfect view of a glacier. If he wanted to, he thinks he might be able get $250,000 for his property. This might as well be in another galaxy for the average Californian who is lucky to find any 3+ bedroom house for that price.

Unless we address our punitive tax and regulatory climate, invest more in our roads and highways, and allow more homes to be built to meet demand, we will lose a lot more people like this (the wealth creators). Are you listening, Governor?

***More Reading and Writing***

Once again California's reading and writing grades are in, and the results show how much farther we have to go. On the National Assessment of Educational Progress (NAEP) test in 2002, California's fourth and eighth graders were below the national average and below comparable states.

Fourth graders' reading scores improved over previous levels, but still fall below the national average. Eighth graders' reading worsened from prior years. Overall, we rank 43rd in reading among all the states with only 21% of fourth graders and 20% of eighth graders managing to rate at the "proficient" level. Eighth grade writing scores are up though still below the national average. (Fourth graders were not previously tested in writing, so no comparisons are available, but this year's scores were below the national average.) Twenty-three percent of students were proficient writers.

MISCELLANY

***Three More Words to Know***

Each week, the Leonard Letter features a few of the words from a list of 100 words that some educators say every high school student should know. The full list may be viewed at http://www.houghtonmifflinbooks.com/booksellers/press_release/100words/.

49. Lexicon (n) Dictionary: Last week's gubernatorial debate introduced at least one new word into California's political lexicon: Terminator.

50. Loquacious (adj) Very talkative; garrulous: I wonder, if Arianna Huffington does get a role in "Terminator 4" will she be even more loquacious than she was at the debate?

51. Lugubrious (adj) Mournful, dismal, or gloomy, especially to an exaggerated or ludicrous degree: Arianna Huffington and Cruz Bustamante accused Arnold Schwarzenneger of having a lugubrious outlook on the state's economy, but they are misled if they do not realize that our business climate is as dismal as he said..

BOE AND LEGISLATIVE DATES

September 8-30 --- Registered voters may apply to county election officials for an absentee ballot for the October 7th statewide special election.

October 7 --- Special Statewide Election

October 15 --- BoE meets in Sacramento.

November 15 --- Statement of the Vote --- The last day for the Secretary of State to prepare, certify, and file a statement of the Vote.

November 18 & 19 --- BoE meets in Sacramento.

December 4 --- BoE meets in Sacramento.

January 5, 2004 --- Legislature reconvenes.

NOTABLE DATES/ HISTORY

September 29, 1789 --- 1st congress adjourns

September 30, 1452 --- 1st book published, Johann Guttenberg's Bible

September 30, 1934 --- FDR dedicates Boulder Dam (Hoover Dam)

October 1, 1890 --- Yosemite National Park established

October 1, 1898 --- Henry Huntington buys the LA Railway

October 2, 1967 --- Thurgood Marshall is sworn as 1st black Supreme Court Justice

October 3, 1789 --- Washington proclaims the 1st national Thanksgiving Day on Nov 26

October 3, 1913 --- Federal Income Tax signed into law (at 1%)

October 4, 1984 --- U.S. government closes down due to budget problems

October 5, 1947 --- 1st Presidential address televised from White House (Harry S Truman )

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