HomeMy WebLinkAboutMINUTES - 03281995 - S.2 r . S
TO: BOARD OF SUPERVISORS` Contra
FROM: JIM ROGERS, SUPERVISOR, DISTRICT I Costa
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County
March 23, 1995
DATE: t°Gii+
SUBJECT: OPPOSE GOVERNOR WILSON'S PROPOSED 15% PERSONAL AND CORPORATE INCOME
TAX CUT
SPECIFIC REQUEST(S)OR RECOMMENDATION(S)&BACKGROUND AND JUSTIFICATION
RECOMMENDATION:
ADOPT a position in Opposition to Governor Wilson' s proposed 15%
personal and corporate income tax cut on the basis that it is
regressive, that business would prefer to have a workable
infrastructure, and that it is inappropriate to reduce taxes on the
wealthy while taking money from vital services to children,
families and senior citizens .
BACKGROUND:
In his 1995-96 State Budget, the Governor has proposed a 15%
personal and corporate income tax cut spread over three years .
Taxes would be reduced five percent in each of the next three
years . The total cost over the next four years would be $7 . 6
billion. In addition, the current 10% and 11% tax brackets would
be continued. They are currently scheduled to expire in 1996 .
However, the $7 . 6 billion estimate is a net estimate. Since
current law provides that the 10% and 11% brackets would return to
9 . 3% in 1996 , the actual value of the tax cut is $10 . 6 billion.
Offsetting this is $3. 0 billion in increased taxes as a result of
continuing the higher brackets .
The tax reductions are across-the-board. The 15% reduction would
apply to all taxpayers, including individuals and corporations .
About 70% of the reduction would go to individuals and 30% would go
to corporations .
CONTINUED ON ATTACHMENT: YES SIGNATURE:
RECOMMENDATION OF COUNTY ADMINISTRATOR RECOMMENDATION OF B ARD COMMIT EE
APPROVE OTHER
SIGNATURE(S):
ACTION OF BOARD ON March 28, 1995 APPROVED AS RECOMMENDED OTHER
REFERRED to'the County Administrator to place in context with other budget
issues, consideration of a position opposing Governor Wilson's proposed
15 percent personal and corporate income tax cut.
VOTE OF SUPERVISORS
I HEREBY CERTIFY THAT THIS IS A TRUE
UNANIMOUS(ABSENT •� ) AND CORRECT COPY OF AN ACTION TAKEN
AYES: _ NOES: x,13 AND ENTERED ON THE MINUTES OF THE BOARD
ABSENT: ABSTAIN: OF SUPERVISORS ON THE DATE SHOWN.
MAR 2 8 1995
ATTESTED
Contact: PHIL BATCHELOR,CLERK OF THE BOARD OF
cc: County Administrator SUPERVISORS AND COUNTY ADMINISTRATOR
DEPUTY
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While all taxpayers with adjusted gross incomes of $500, 000 or less
would see a tax benefit, those with higher incomes would receive a
disproportionately large share of the tax reduction. For example,
according to the Legislative Analyst, a married couple filing
jointly with two children, average deductions and an adjusted gross
income of $20,000 would receive a tax break of $29 in 1998.
Another couple with two children and an adjusted gross income of
$500,000 would receive a tax reduction of $4, 666 in 1998!
There are at least three reasons why the Board of Supervisors
should oppose this proposed tax cut:
1 . As we have shown, the proposed tax cut is regressive. It
would be of great benefit to high income taxpayers and of
little value to middle income taxpayers .
2 . We believe that a workable infrastructure is more important to
business than the relatively minor savings most businesses
will receive from the tax break. The same amount of money
could go a long way toward improving the condition of our
roads, funding more and better public transportation, sewer
and flood control projects and financing needed school
construction.
3 . The State should not be providing tax windfalls to wealthy
individuals while it continues to withhold vital services from
children and families, the ill, and the elderly by taking
property tax revenue from counties . If the State has an extra
$7 . 6 billion it doesn't know what to do with, it might
consider returning some of it to local government to offset in
part the property tax money that has been stolen from the
counties over the past three years . The fact is the State
doesn't have an extra $7 . 6 billion. In fact, as the
Legislative Analyst has observed, "The two-year plan to
balance the budget adopted last July has fallen out of
balance. The state faces a budget gap of $2 billion,
consisting of a 1994-95 year-end budget deficit of $740
million and an operating shortfall of $1 .2 billion in 1995-
96 . "
In light of all this, is it responsible to propose a tax cut at
this time? We think not and we think the Board of Supervisors
should oppose the planned tax cut until the State gets its
priorities straight.
Date: oZ
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