Hoping to clarify some of the proposed budget cuts by Gov.
Arnold Schwarzenegger and what effect they could have on tax
revenue in the state, Board of Equalization Chairwoman Betty Yee
spoke to San Benito County business leaders today at a luncheon at
San Juan Oaks Golf Club.
Hoping to clarify some of the proposed budget cuts by Gov. Arnold Schwarzenegger and what effect they could have on tax revenue in the state, Board of Equalization Chairwoman Betty Yee spoke to San Benito County business leaders today at a luncheon at San Juan Oaks Golf Club.
Her hour-long speech at the Lunch with Leaders event put on by the San Benito County Chamber of Commerce explained some of the problems she foresees, including her belief that California will be the last state to get out of the current economic problems.
“If you look at California as a big global economy that includes counties and smaller markets, as a whole California took a huge, huge hit,” she said.
But Yee also contended that San Benito County does have a particular ability to get out of the recession with its location and potential to bring in new business.
“You are sitting on a gold mind and you probably don’t even know it,” Yee said.
The economy, though, shouldn’t get any better for a little longer, she said. In the United States, residential development and consumer spending normally help spur economic growth, Yee said.
“We are still trying to figure out what to do with our stack of homes now,” she said. “We are definitely not seeing those two aspects of our economy performing at all.”
Despite the lack of performance, there have been some bright spots, she said, including modest gains in companies rehiring some of the 1.3 million jobs lost since 2007.
But the rehiring won’t replace all the jobs that were lost, Yee said, and she still expects the state to have budget shortfalls over the next few years.
“We will continue to have budget shortfalls, but it really is all about jobs, jobs, jobs,” Yee said.
The state’s Legislature will spend most of its time trying to fill the $19 billion budget deficit by cutting programs such as CalWORKS, she said.
Still, Yee thinks the state government is missing tax revenue through out-of-state buying.
With people not paying for taxes through online shopping and buying other products from out of state, California could be missing out on over $1.2 billion of revenue, she estimated.
The lack of having to pay taxes gives the online shopping centers a benefit over local business because shoppers pay less money, she said. She said the government should collect the money and noted how buyers are expected to claim the purchases on their tax forms.
Most buyers don’t claim the taxes and the government doesn’t enforce the law, Yee said. The federal government would need to enforce the law because of a Supreme Court decision in 1992 that prohibited states from putting pressure on online shopping websites to tax customers. And the websites claim they don’t have the technology, she said.
“When the government goes to increase revenue, they increase the tax rates … But they don’t look at other revenue sources,” Yee said.
Yee has lobbied state delegates in Washington D.C. on the issue, but no decision has been made.
“I think it’s something that we need to look at,” she said.
