California Senate Passes Trump Tax Workaround: The state Senate is attempting to sidestep a change in the federal tax overhaul that lawmakers say targets blue states. The law puts a $10,000 cap on state and local income tax deductions, particularly affecting higher-income taxpayers in higher-tax states.
The Senate bill is either a novel idea or a ridiculous scheme to get around it, depending on who you ask.
It creates a new charity that supports state programs. A taxpayer gives to the charity, gets a state credit that wipes out most state tax liability, and can deduct the charitable contribution from their federal return.
“Colleagues, this is not a dart, this whole bill is a missile shooting at Washington, D.C.,” said Republican state Sen. John Moorlach, a former accountant. “And it will not stand.”
“There is no missile that’s been launched by California,” responded Democratic state Sen.Mike McGuire. “We’re simply reacting to the federal government, which has placed a target squarely on our back.”
Tax scholars debate whether the proposal would survive a review by the Internal Revenue Service. It has previously approved state tax credits for charitable contributions to state-run programs, often education-related, but skeptics say the agency could easily strike down naked circumventions of intended tax law.
To address some concerns, bill author and state Senate leader Kevin de León modified the measure. The amended version would refund 85 percent of charitable giving as a state credit, rather than 100 percent. A companion bill would allow taxpayers to choose state programs that benefit from the donation, including K-12 education and state parks.
The measure passed 27 to 7 and now heads to the Assembly.
- Ben Bradford, Capital Public Radio
Lawmakers Order Audit Of High Speed Rail Project After Report Of Ballooning Construction Costs: California lawmakers have ordered an audit of the state's high-speed rail project, after a recent report revealed the first segment of the rail line through the Central Valley would cost an extra $3 billion.
Republican Asm. Jim Patterson of Fresno was one of the lawmakers calling for the state to look into whether there will be more unforeseen costs.
"For me, the big question here is: Is there enough money to complete from Central California into the Silicon Valley?” said Patterson.
Auditors will also look at whether a rail line connecting San Francisco to Los Angeles can be completed by 2029.
The audit will take six to nine months and cost $350,000.
Recent estimates have put the total cost of the project at more than $65 billion. That's $25 billion more than the original estimate given when voters approved a bond measure 10 years ago.
- Sally Schilling, Capital Public Radio
California Lawmakers Move To Grant Whistleblower Protections To Staff: The California Legislature finally appears set to enact whistleblower protections for legislative employees — and in some cases, even lobbyists. Those efforts repeatedly failed in previous years before the #MeToo movement took hold.
The Senate unanimously approved a bill Tuesday that would offer protection for lobbyists and staff who report harassment. It would also require the Legislature to keep records of harassment complaints on file for 12 years.
“The women and men who work here demand we do better,” said the bill’s author, Democratic Sen. Anthony Portantino.
Although the bill passed unanimously (except for Democratic Sen. Tony Mendoza, who is on a temporary leave of absence as an outside law firm investigates sexual harassment complaints against him), several lawmakers raised concerns.
Republican Sen. Joel Anderson took a shot at Democratic leaders for failing to pass similar measures until now.
“Had leadership been more open to protecting women and protecting people against harassment, and those bills had passed back then, we wouldn’t be in the position we’re in today,” Anderson said.
Democratic Sen. Holly Mitchell said the real solution lies with a joint Senate-Assembly panel working to create a single set of rules for both houses.
“What this is going to require is a single-voice response in terms of how the Legislature will step up and develop policies and practices to provide protection for all impacted by sexual harassment,” Mitchell said.
The measure now moves to the Assembly. A second whistleblower protection bill that would apply to legislative staff who report any legal or ethical violations – not just harassment – is expected to win final passage in both houses within the next week.
- Ben Adler, Capital Public Radio
Styrofoam Ban Fails In California Senate: The California Senate has rejected a bill that would ban restaurants, food vendors and grocery stores from using Styrofoam containers.
Democratic Sen. Ben Allen, the bill’s author, says the containers often become urban litter that hurts the environment and the economy.
“The more we spend time looking at the damage that this product is doing to our coastline, the impact that that has on everything from tourism to oceanic health, it becomes abundantly clear how important it is to take this modest step,” Allen said.
But Republican Sen. John Moorlach says the private sector is already reacting to lawmakers’ concerns by finding alternative containers.
“It’s happening on its own, and it’s fantastic,” Moorlach said. “And I’m just wondering, why a law?”
The Styrofoam ban failed Tuesday 18-16, three votes shy of passage. The Senate also rejected it last year.
- Ben Adler, Capital Public Radio
Senate Backs New Pretrial Diversion Option For Defendants With Mental Disorders: The California Senate has approved a bill that would allow judges to send criminal defendants suffering from mental disorders to treatment instead of trial.
Democratic Sen. Jim Beall says under his bill, a court could postpone the trial for a misdemeanor or nonviolent felony for up to two years with the consent of the defendant — and, for felonies, the prosecutor.
“We’re spending billions of dollars on programs for mental illness,” Beall said. “However, where we’re spending that money is in the jails and prisons, not in the community, where it belongs and where we can be more effective in terms of helping people recover.”
Defendants who complete treatment successfully would have their charges dismissed and public access to their arrest records restricted.
The bill passed without opposition Tuesday, drawing praise from many Republicans as well as Democrats. It now moves to the Assembly.
- Ben Adler, Capital Public Radio
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