Although a final tally on refund requests won’t be known until the May 31, it still appears, as of May 28, the state will take in more than it expected for the month.

Gov. Arnold Schwarzenegger’s Department of Finance estimates net income tax collections of $2 billion for May.

Through May 27, withholding – the tax payments employers take out of employee checks and send to the state – stands at $2.7 billion, according to the Employment Development Department.

The Franchise Tax Board reports receiving $477 million in additional income tax payments. Combining the two, May income tax receipts are nearly $3.2 billion.

Refund requests total $709 million but could climb because they are tallied last.

But, month-to-date, total receipts less refunds is just under $2.5 billion, giving the state $500 million in budgetary relief.

Bank and corporation tax collections for May were predicted to be $224 million. The Franchise Tax Board reports gross receipts of $340 million and refund requests of $40 million for a net of $310 million — $86 million above estimates.

Greater-than-anticipated revenue helps the budget process in two ways:

It lessens the $19.1 billion cash shortfall the state and pushes off the date when the state’s stream of cash will begin to dry up, estimated now to be mid-to-late August by the Legislative Analyst if no budget is enacted before then.

June is a much more important month. The GOP governor expects more than $5.5 billion in income tax receipts and $2.1 billion in bank and corporation tax payments.

Previously, June represented 10 percent of the income tax payments for the state’s fiscal year.

But in an effort to pull more future income into the current and previous fiscal year, the 2009 budget front-loaded estimated tax payments so that 40 percent, rather than 25 percent, are due in June.

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(Editor’s Note: Merriam-Webster’s top three definitions of a politician are, in descending order:

“A person experienced in the art or science of government, especially one actively engaged in conducting the business of a government.”

“A person engaged in party politics as a profession.” And:

“A person primarily interested in political office for selfish or other narrow, usually short-sighted, reasons.”

Turning again to Merriam-Webster, a “representative,” as used as a noun in this slate mailer is:

“One that represents another or others.”

“One that represents a constituency as a member of a legislative body.”

“A member of the house of representatives of the United States Congress or a state Legislature.”

“One that represents another as agent, deputy, substitute, or delegate usually being invested with the authority of the principal.”

The purpose of the slate mail creator – Citizens for Representative Government 2010 of Redondo Beach – appears to be to use the third, most pejorative definition of politician and contrast that with the fourth definition of representative.

Representative, good. Politician, bad.

With the possible exception of Larry Aceves, a retired school superintendent running for state schools chief, every individual on the front of the mailer is a politician, at least within the meaning of the first two definitions.

They receive the benefit of the doubt on the “experienced in the art or science of government” issue.

All are also representatives. All but one are present or former members of a legislative body and the one who isn’t is still a representative.

Barbara Alby is a former GOP Assemblywoman. Mike Villines, is a GOP Assemblyman from Fresno. Sam Aanestad, a Republican state senator from Grass Valley, is flanked by arguably the most experienced person in the art or science of government on the page – GOP Rep. Tom McClintock of Granite Bay who, despite routine railings against government waste, has had a taxpayer-financed job for 26 of the past 30 years.

Steve Cooley, Los Angeles’ Republican District Attorney, is a politician and represents the “people” when they bring legal action against wrongdoers.

On the back, ignoring the local sheriff candidates and the ballot propositions, GOP Controller candidate Tony Strickland is a state senator who previously served six years in the Assembly. Mimi Walters, a GOP state senator, previously served four years in the Assembly.

Damon Dunn, a Stanford University graduate, former player in the National Football League and now owner of a real estate firm, is the only candidate on the slate mail for statewide office who is not a politician. Nor is he a representative. He’s just a wannabe.

As denoted by the asterisks next to their names, all of the candidates with photographs paid the creator of the Citizens for Representative Government Voter Guide to be included.)

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(Editor’s Note:  In the May 25 post below — “It’s What Ducheny Said, Not What Senate Democrats Propose” — the apparently chronically inaccurate chief correspondent of California’s Capitol says Sen. Denise Ducheny is the “dean” of the Legislature. That is not true and the post has been modified accordingly.

As the term is commonly used, “dean” means the sitting lawmaker with the longest amount of state legislative experience. While Ducheny is in her 14th year — six in the Assembly and eight in the Senate — her tenure is eclipsed by that of Assemblyman Charles Calderon, a Montebello Democrat, who has 20 years of state legislative experience.

Calderon previously served in the Assembly from 1982 to 1990. He was elected to the Senate and served two four-year terms before being forced from the Legislature in 1998 by term limits. He was elected to an Assembly seat in 2006 where he is concluding his second two-year term.

While not the “dean” in terms of legislative longevity, Ducheny is indisputably the most knowledgeable lawmaker about the intricacies and interplay of the state budget.

However, this does not ameliorate the error, which California’s Capitol regrets, nor the creation of a second personnel file to contain the latest in the chief correspondent’s steady stream of reprimands.)

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This is excerpted from the May 24 edition of Cal-TaxReports, published by the California Taxpayers’ Association:

What Is the True Deficit?

The $19.1 billion deficit estimate is comprised of a current year shortfall of $7.7 billion, a budget year shortfall of $10.2 billion and a reserve of $1.2 billion.

However, the estimate is based on the usual budget math of determining what the government would like to spend and comparing that to available revenue. In this case, it is based on the assumption that the state budget should grow 14 percent, from $87.3 billion in 2009-10 to $99.5 billion in 2010-11.

Because the state is unable to sustain this enormous increase in spending, it is called a deficit.

Instead, what if the budget deficit was measured by what was actually spent in 2009-10 plus a reasonable (cost-of-living-allowance of) 2.2 percent for Consumer Price Index growth and 1 percent for population growth?

Using this method to compute the deficit, the difference between revenue and spending would be $7 billion, $83.1 billion in revenue and $90.1 billion in spending.

Because of an accounting gimmick moving a state payroll date to July 1 to put it in the next fiscal year, 2009-10 expenditures contain only 11 months of state payroll. To restore payroll to a 12-month number, $930 million should be added to the 2009-10 spending base.

Additionally, the raid on local agency property taxes for 2009-10 artificially reduced school spending by $1.7 billion for one year.

To adjust 2009-10 spending for these gimmicks, a figure of $89.9 billion could be used as a surrogate for 2009-10 spending. Adjusting for population and inflation would produce a $92.7 billion spending figure. The difference between this number and available revenue would produce a $9.6 billion deficit.

*****

(Editor’s Note: Truth is in the eye of the beholder. “Reform” for one political entity could mean “ruination” to another. First, since California is precluded by law from running a deficit, as Cal-Tax calls it,  the word shortfall will be substituted. Turning to Cal-tax’s estimate of California’s shortfall, it’s size would certainly shrink sharply using the methodology articulated in Paragraphs 4 and 5.

However, it would violate current law.

That’s what Cal-Tax means by “the usual budget math of determining what the government would like to spend.”

The Schwarzenegger administration is quick to note that’s its calculation is not of what it wants to spend but of what costs must be considered in developing a spending plan.

This is what’s known as a “workload” or “baseline” budget. What comprises a workload budget is laid out in detail in Government Code Section 13308.05.

A more reader-friendly definition of it is contained in the glossary on the website of Schwarzenegger’s Department of Finance:

“Workload Budget means the budget year cost of currently authorized services, adjusted for changes in enrollment, caseload, population, statutory cost-of-living adjustments, chaptered legislation, one-time expenditures, full-year costs of partial-year programs, costs incurred pursuant to constitutional requirements, federal mandates, court-ordered mandates, state employee merit salary adjustments, and state agency operating expense and equipment cost adjustments to reflect inflation.”

So while the task of budget writers might be greatly simplified by using Cal-Tax’s approach to defining the shortfall, that’s not an option without a statutory change. To which, hopefully, Cal-Tax would grumble: “There oughta be a law.”)

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While California isn’t close to closing its $17.9 billion budget gap between revenues and spending commitments, it is a step closer to outlawing “absentee florists.”

For the second legislative session in a row, Assemblywoman Mary Salas is carrying a bill that would prevent a “vendor of floral or ornamental products or services” – as defined – from misrepresenting the location of their business.

The problem Salas’ bill aims to solve is that consumers can call a florist with their city or neighborhood in its name that is actually a call center  “located thousands and thousands of miles away,” as the Chula Vista Democrat recently told the 80-member Assembly which sent her bill, AB 2076, to the Senate on a bipartisan 71 to 5 vote.

“A consumer has a right to know if they’re doing business with a local company,” Salas said in defense of her measure, noting that many Californians prefer to support local or state businesses over out-of-state ones.

Twenty-six other states have similar truth-in-floral-advertising laws. Among them are Pennsylvania and New Jersey. Minnesota, the 26^th state, has its law take effect on August 1.

According to Salas and her bill’s sponsor, the California State Floral Association, consumers are “duped” by out-of-state call centers into thinking they are purchasing flowers at a local florist.

Salas and the association argue that California customers who unwittingly do business with an out-of-state call center get less for their money and deprive the state of sales tax revenue.

The example the association uses is a buyer orders a $50 floral arrangement. The call center rakes off $21 and $29 goes to the local florist who actually delivers the flowers. Sales tax is levied only on the in-state florist’s end of the transaction, a 42 percent reduction in sales tax.

Under Salas’ bill, a florist could not use a local telephone number in an advertisement if calls to it are routinely transferred to another location and the advertisement doesn’t show the actual physical location of the business.

Nor could a florist use a fictitious business name is it misrepresents the business’ real location and doesn’t show the physical address of the business.

“Floral or ornamental products or services” are defined as “floral arrangements, cut flowers, floral bouquets, potted plants, balloons, floral designs, and related

products and services.”

Combating “absentee florists” has been a more than a decade long battle. In 1998, the Federal Trade Commission issued a “Consumer Alert” called Petal Pushers: Is Your ‘Local’ Florist Really Long-Distance? which said, among other things:

“Some unscrupulous telemarketing firms are posing as local florists, charging you higher fees and taking business away from legitimate florists in your town.”

Legislation like Salas’ has been introduced in Sacramento since 1999 when Assemblyman George House, a Hughson Republican, carried the first such measure. Assemblyman George Nakano, a Long Beach Democrat, took up the fight in 2001. Salas herself introduced a similar measure in 2007.

In vetoing House’s bill, then Gov. Gray Davis, a Democrat, said:

“While this bill might help to eliminate consumer confusion, it ignores the realities of a global economy where companies located all over the world compete globally for customers.”

Davis waxed more poetic in vetoing Nakano’s measure, asking:

“Even if it were appropriate to restrict floral businesses in such a fashion, how would a local business name be defined?  How many miles away from the Pacific coast would a business have to be located before it could not use the word “Pacific” in its name?

The measure would be “problematic to define and enforce,” Davis concluded, adding that it would “create a slippery slope of unnecessary restrictions on all kinds of businesses.”

In vetoing Salas’ previous measure, GOP Gov. Arnold Schwarzenegger said, much like Davis before him, that in the global economy “it is unreasonable to limit out-of-area businesses from using local names and telephone numbers.  In virtually every aspect of the economy, consumers are accustomed to purchasing products from around the world via many methods.”

It appears nothing has changed in the content of Salas’ measure to change the governor’s mind.

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