CAR Updates the 3% Withholding Tax Issue 6-29

Published: June 29, 2009

Here a current (as of 6/29) update on the 3% withholding portion of the state budget. Because our representatives are all Republican and are against this and any other tax increase, we will not be in the loop on this one but be assured CAR is doing everything they can on our behalf.

Heads up on your end. I’ll be sending two Red Alerts tonight – one for the Senate and one for the Assembly – on this issue. They will only go to ALL REALTORS® who reside in Democratic districts, except for those in Sen. Lou Correa’s district. We are asking them to call their legislators using our toll-free number to ask legislators to keep the withholding proposal out of the budget. Please note, that some members will receive two of them if they reside in a Democratic Assembly district and a Democratic Senate district. I’ll try to note that clearly in the Red Alert. REALTORS® who live in Republican seats will not get the Red Alerts.

Here’s the most recent update on the Budget and 3% Withholding issue. Late last night the Assembly approved a set of budget bills that included the withholding proposal. The state Senate did likewise this afternoon. It was mostly a party line vote, with Democrats supporting and Republicans opposing. No Republican supporting either set of measures and a few Democrats voted NO or did not vote. I don’t have final roll calls for you at this point. The Governor has said he will veto all the measures approved last night or today, so everyone gets to start over. As I’ve said earlier, our goal is to keep the withholding proposal out of the budget altogether. I’d appreciate it if everyone working with a Democratic legislator would call your legislator back and ask them to work to keep the withholding proposal out of the next version of the budget.

Budget Update: Controller John Chiang has announced that he would have to start paying the state’s bills with IOUs on July 2 if the budget impasse isn’t resolved quickly. The state Assembly on Thursday approved three bills representing $5 billion in savings intended to address the state’s immediate cash-flow problem. Later that day, the state Senate rejected all three bills. That may have been due to Governor Schwarzenegger announcing after the Assembly action that he would veto all three bills. The Governor said that he is opposed to solving the state’s $24.3 billion budget deficit on a piecemeal basis. It appears that legislators will have to “go back to the drawing board” to formulate a new budget that the Governor will sign.

The Budget Process: While every member of the legislature votes on the state budget, very few members are actually involved in the formulation of the budget. Generally speaking, the budget is produced by top legislative leaders – of both parties – working in concert with the Governor’s office. However, sometimes the majority party will force a vote on a budget over the objections of the minority party and the Governor. As a result, details of a budget proposal may not be available until the budget is actually being voted upon. In such situations, it is not uncommon for legislators to protest that they have not had an opportunity to fully review the proposed budget – a budget that for the state of California is in the range of approximately $100 billion.


Last modified: June 29, 2009 at 7:27 pm | Originally published: June 29, 2009 at 7:27 pm
Printed: September 27, 2020