Greetings
Thank you for taking the time to read my e-newsletter. "Mimi's Message" is designed to keep you informed on the most current events and issues facing our community and State. As always, please feel free to contact me with feedback or questions.
-MIMI WALTERS
Senator, 33rd District
www.senate.ca.gov/walters
First rule of business: When you’re in a hole, stop digging
(This article originally appeared in the May 21, 2009 issue of Capitol Weekly.)
A prevalent misconception among California’s policy makers is that, by raising taxes, our state can generate more revenue and bridge the gap, narrowing our budget deficit. The problem with this theory is that, in the midst of tough economic times, taxpayers and corporations do not possess the same margins (of cushion) as they do during times of plenty. Taxpayers who cannot pay the increased taxes find ways to persevere; they downsize, they trim expenses, and ultimately, they cash-in and move out of state to more affordable destinations.
Likewise, businesses that cannot afford the increased taxes seek ways to survive; they layoff employees, they eliminate products and services and, as a last resort, they close their doors and relocate to more business–friendly states. For California, the biggest problem with this unfortunate reality is that not one single taxpayer or business in the United States is packing their bags and heading to California seeking lower taxation and less government regulation. Ranked 48th in the country for our business tax climate, California is standing by watching as one business after another shuts its doors and moves to neighboring states, or even foreign countries. The road to lower taxation and reduced government regulation is a one–way street out of California.
A second misconception is that any creative or strategic policy that a company institutes to gain a competitive or financial advantage is automatically a "loophole" that must immediately be closed. With the third most hostile business tax climate and, undoubtedly, the most over–regulated, anti–business environment in the nation, wouldn’t it make more sense to instead consider these advantages "incentives" for businesses to remain in California? Instead of condemning businesses that discover and employ strategies to reduce their tax burden, keep their doors open, and continue doing business in the most business unfriendly state in the nation, shouldn’t we be implementing policies that create incentives for business to stay here?
If California’s claim to fame is that of being the state with the most business unfriendly environment, do we really have the luxury of raising taxes, imposing new regulations, and eliminating all incentives for businesses to succeed in the midst of a recession? The obvious answer is, "No". But, this is what is currently taking place in California’s capital.
At this time, hundreds of bills intended to increase the regulatory burden on California businesses are making their way through the legislative process. All the while, rumors run rampant throughout the Capitol that lawmakers intend to balance the budget by passing "fee increases" on businesses with a majority–vote.
This all comes on the heels of recent budget negotiations that resulted in the largest state tax increase in the history of our nation – taking more money out of the pockets of California’s consumers.
California’s legislature is repeatedly and unabashedly telling businesses in our state, "We just don’t care about you." Our businesses are getting the message. As business after business shuts its doors and moves to neighboring states with more business–friendly policies, welcoming them with open arms— not to mention huge tax incentives—California’s revenues continue their precipitous decline. As taxpayers, reeling from tough economic times coupled with new tax hikes, do everything they can to hold on to more and more of their hard earned money, California’s revenues continue to drop.
Now, the State is left trying to balance its budget on declining revenues by again raising taxes and fees and making significant cuts to programs, while piling countless new layers of regulation onto the backs of California’s businesses.
The quickest and easiest way to recover from a recession is to stimulate the economy. We should be providing tax incentives for businesses to create jobs, cutting red–tape, and allowing taxpayers to keep more of their money. Government has the ability to encourage people to reinvest in the market by granting tax breaks, while simultaneously empowering businesses by cutting regulation and offering tax exemptions and economic investment credits. Yet, Sacramento lawmakers are doing the exact opposite.
When will the political elite learn from past mistakes? The Great Depression was prolonged because of increased taxes and tariffs imposed by the Hoover Administration, thus discouraging long–term economic activity. The recession in the early 1990’s ended all around the nation while California was still mired in an economic slump because massive tax increases designed to increase state revenues, served to do the exact opposite. Revenues declined even further, and it wasn’t until the late ‘90’s that California finally emerged from what should have been a short–term recession.
Tax increases, closing "loopholes," and more bureaucratic red tape are not solutions for leading us into the next decade. Innovative and fresh ideas to encourage growth in business and jobs are what California needs to succeed now.
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Impending Regulations
Free Money in Times of Budget Crisis?
Fleet Modernization (currently Mo dernization) Program Poses Major Financial Risk to California
This month, the Air Resources Board will hold hearings to adopt new regulations to encourage people to take high–polluting vehicles within the South Coast Air Quality District off the road. Known as the Enhanced Fleet Modernization Program Regulation, the Air Resources Board will consider whether or not to put state taxpayers on the hook for tens of millions of dollars.
The proposed regulation, which would provide up to $4,000 in incentives and cash to owners of polluting vehicles that do not pass smog check tests, is intended to help California meet its "greenhouse gas emission" goals.
While this may be a well–intentioned measure to comply with Assembly Bill 32 (AB 32), legislation that seeks to roll back greenhouse gas emissions in California, it ignores the fact that we face a multi–billion dollar budget deficit and cannot currently afford to spend millions more dollars on additional environmental regulations.
People have spoken at length about the costs and implications of complying with AB 32, and this is one of the first proposed regulations to provide an actual cost to the legislation. By offering people anywhere from $1,000 to $1,500 cash for taking their cars off the road and then giving them a $2,000 or $2,500 voucher for the purchase of a new car, taxpayers will be on the hook for tens of millions of dollars.
If adopted as drafted, this regulation will cost a minimum of $30,000,000, yet take only 10,000 cars off the road. This will be funded strictly with taxpayer dollars.
Fortunately, there is still a chance to voice your opinion on the adoption of this regulation. A hearing will be held on June 25th and June 26th in Sacramento at the California Environmental Protection Agency’s Air Resource Board.
Please contact our office at (916) 651–4033, and ask for our consultant handling excessive regulations to learn more.
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Regulations to Repeal
Truck and Bus Emissions
Last December, the Air Resources Board (ARB) adopted a regulation that requires all trucks and buses to install expensive emissions control devices or be forced off the road. While the goal of reducing emissions is admirable, this regulation will financially impact 170,000 businesses and over a million vehicles that are essential to transport freight and people in California.
Perhaps most disturbing, this regulation will force cash–strapped school districts to either install expensive retrofit equipment or fully replace their bus fleet with more modern buses by 2012. Given the fact that schools will certainly face significant cuts in the current budget adjustments, forcing them to spend millions of dollars on purchasing new buses or installing expensive retrofit equipment will mean even less money is available to our local classrooms.
We all want vehicles to be as clean as possible, but this regulation will deal a significant blow to the trucking and transportation industry in California. By forcing small businesses that operate on slim margins to purchase expensive equipment, the ARB has jeopardized the financial stability of the state.
If California is going to rebound from the current recession, we need to repeal regulations such as the one adopted by the ARB. While policy makers are calling for more businesses to locate in California, regulators seem to be enacting every possible regulation to discourage those who create jobs from locating or expanding here.
Please contact our office at (916) 651–4033, and ask for our consultant handling excessive regulations to learn more about this or other regulations. Also, if you are aware of other regulations that should be repealed, please do not hesitate to contact us.
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Tustin Man and Woman of the Year
Each year, the City of Tustin recognizes two individuals from the community who have consistently risen above the ordinary and have truly made a difference in the lives of those around them. On Friday, May 29, Tustin held their Annual Black Tie Gala to honor the 2009 recipients of this prestigious accolade. Kimberly Bass, Woman of the Year, and Al Enderle, Man of the Year, are citizens who have exemplified compassion, thoughtfulness, and selflessness through their acts of kindness, leadership, and service to others.
Tustin Woman of the Year, Kimberly Bass is a full–time mother and avid community volunteer. In 1978, at age 16, she began volunteering for the Tustin Tiller Days by organizing a teen dance and has continued helping with the festival every year. She co–founded the Miss Tustin Scholarship Program in 1999 and continues to produce, choreograph, and train young women for the competition. In addition, Kimberly is always eager to assist her children’s teachers in the classroom and coordinate volunteers for soccer games.
Al Enderle, Tustin Man of the Year, is a lifelong resident of Tustin. Born in 1928, Al was raised on an orange grove and graduated from Tustin High School before attending the Naval Academy in Annapolis, Maryland. Over the years, he has been recognized for his entrepreneurial endeavors and strong commitment to business ethics. Al has served the community through his work with the Tustin Boys & Girls Club, Tustin Chamber of Commerce, Orange County Farm Bureau, and Tustin Public School Foundation, as well as numerous other volunteer organizations.
We offer our congratulations and gratitude to Kimberly Bass and Al Enderle for their exceptional service to Tustin. Because of strong leaders and dedicated volunteers like them, we can appreciate a stronger community.
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Wall Street Journal Article - What happens when you raise taxes on the richest 0.3%?
Maryland couldn’t balance its budget last year, so the state tried to close the shortfall by fleecing the wealthy. Politicians in Annapolis created a millionaire tax bracket, raising the top marginal income–tax rate to 6.25%. And because cities such as Baltimore and Bethesda also impose income taxes, the state–local tax rate can go as high as 9.45%. Governor Martin O’Malley, a dedicated class warrior, declared that these richest 0.3% of filers were "willing and able to pay their fair share."The Baltimore Sun predicted the rich would grin and bear it."
One year later, nobody’s grinning. One–third of the millionaires have disappeared from Maryland tax rolls. In 2008 roughly 3,000 million–dollar income tax returns were filed by the end of April. This year there were 2,000, which the state comptroller’s office concedes is a "substantial decline." On those missing returns, the government collects 6.25% of nothing. Instead of the state coffers gaining the extra $106 million the politicians predicted, millionaires paid $100 million less in taxes than they did last year –– even at higher rates… To read more, go to:
http://online.wsj.com/article/SB124329282377252471.html
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Welcome New Staff Members
Please join us in welcoming our two new staff members in the Laguna Hills District Office. Leisha Bolland joins us from former Senator Dick Ackerman’s office where she served as a representative of the 33rd Senate District for four years, making her a valuable asset to our team because of her extensive knowledge of our district. Nathan (Nate) Romero is a recent graduate of Chapman University where he studied Political Science and graduated Cum Laude. Both Nate and Leisha will serve as District Representatives, helping constituents and attending events in the 33rd Senate District and throughout Orange County. Be sure to say hello when you see them at events.
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June 2009 Upcoming Events
June 6 – Buena Park – Visit The Getty Villa. Saturday 9:30am to 5:00pm, $28. Travel hassle–free on a deluxe motorcoach and leave your traffic and parking worries behind! Join them as the Buena Park Fine Arts Department embarks on a Cultural excursion. Transportation is provided and included in the price of all excursions. All times listed are based upon departure and arrival times to and from Walter D. Ehlers Community Recreation Center. You can sign up for one or all of these excursions at the Community Recreation Center’s office located at 8150 Knott Ave in Buena Park. Or, to reserve your spot by phone, call the Fine Arts Department at (714) 236–3868.
June 6 – Annual Studio Arts Festival at the Irvine Fine Arts Center. This event is free to the public and features art vendors inside the Art Center as well as out in Heritage Park near the lagoon. For more information visit www.IrvineFineArts.org or call (949)–724–6880.
June 6 – Heritage Hill Historical Park, 25151 Serramp Rd., Lake Forest. Enjoy entertainment and activities for the whole family from 11:00am to 4:00pm. Children’s activities include piñatas and free craft projects.There will be many fun activities for all ages. Fee: $3.00 Children $4.00 Adults. For more information, call (949)–923–2230.
June 7 – The 25th Annual Tustin Street Fair and Chili Cook–Off will take to the streets of Old Town Tustin on June 7, 2009 – 11am to 6pm. This annual event features the Chili Cook–Off, craft booths, non–profit food vendors, entertainment, kids carnival, music and much more. Admission is free. For more information, visit www.tustinchilicookoff.com or call (714) 573–3326
June 10 – Tustin night at the Orange County Flyers, Goodwin Field, Orange County Flyers vs. the Victoria Seals at 5:05pm. Tickets are free! Call (714)–573–3326.
June 27 – Lucas Oil Presents the 6th Annual Hollywood In Fullerton– the 70s Come Alive Again! Saturday, June 27, 2009 at the historic downtown Fox Fullerton Theatre. Main Attraction: Cocktail Reception, Dinner, Dancing, Dessert at Angelo’s and Vinci’s Ristorante, 8pm. Live Variety and Multi–Media Stage Show, at the Historic Fox Fullerton Theatre, (reserved seating) Silent and Live Auction with Amazing Items, $100 per person. Courtyard Party: at 6:45pm. Ticket includes 2 drinks and appetizers; 8pm. Live Variety and Multi–Media Stage Show at the Historic Fox Fullerton Theatre, $50 per person (popcorn included). Open seating. General Admission: 8pm., Balcony–open seating. Live Variety and Multi–Media Stage Show at the Historic Fox Fullerton, Theatre $25 per person (includes popcorn). Guests are encouraged to dress in 70s attire. All tickets are available on the web at www.foxfullerton.org or by calling (714) 870–0069.
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