Governor Arnold Schwarzenegger said July 29 that he will call a special session of the Legislature to consider recommendations of the state tax commission after that panel issues its report in September. The governor also issued an executive order granting the commission's request to extend its deadline until September 20.
The 14-member commission, formally known as the Commission on the 21st Century Economy, was formed late last year and originally was supposed to complete a report by April 15. It later requested an extension until July 31, and then sought another extension until mid-September. The commissioners have been discussing overhauling California's tax laws by imposing a new "business net receipts tax," eliminating the corporate tax and state sales tax, and making other changes. (Click here for the commission's broad outline of the latest plan, which also includes the possibility of a split roll property tax. Click here for a list of memos from various commissioners describing several alternative proposals, none of which appears to have the consensus of the full panel – a goal previously outlined by Chairman Gerald Parsky for any recommendation made by the commission.)
In his executive order, the governor reiterated his advice that the commission should recommend ways to reduce revenue volatility, writing that "an improved tax system would decrease the pressure for future tax increases to address revenue shortfalls that will continue to occur if the volatility of the current system is not reduced." The executive order also notes, "California's current tax system could be improved to provide greater incentives for firms to increase employment in the state and invest more in entrepreneurial activities and research that lead to high-paying jobs and more exports."
Mr. Parsky has indicated that the commission will hold two meetings in September, in addition to two interested parties meetings – on August 26 and August 28 – to flesh out details of some of the provisions currently under consideration. (Sources: Governor's Executive Order S-15-09, July 29; Commission on the 21st Century Economy website.)
Cal-TaxReports, August 10, 2009
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