This story was reported for the San Diego News Network on February 16, 2010.
The love of Valentine’s Day is far gone in some parts of California. Independent contractors may see 3 percent in less monetary affection from companies while the elderly population is seeing a less healthy dose of admiration too.
Here is your post-Valentine’s Day California Budget Crisis Diaries.
Independent contractors’ deal: If you’re an independent contractor, it’s time to take note of what’s happening in Sacramento.
According to The Sacramento Bee, legislators are considering a proposal that would have companies withhold “3 percent of payments” made to independent contractors so that the state could bank on it instead.
“That’s a group estimated to consist of more than 3 million California taxi drivers, lawyers, farmers, miners, plumbers, real estate agents, food storage container salespeople, home builders and others who in essence act as their own bosses.
By withholding part of the payments as income tax and passing it on to the state, the Franchise Tax Board estimates the state could pull in $1.4 billion during the year instead of having to wait until the contractors filed their tax returns.
Moreover, the FTB estimates that the forced withholding would produce an additional $140 million to $375 million per year that contractors don’t pay now because they under report their income.”
Are they seriously considering it? Well, Senate President Pro Tem Darrell Steinberg (D-Sacramento) told the Bee, it could just be a way of “smoothing out” the tax system.
Losing $$$ in tax exemptions: In other taxing news, California could be seeing billions of dollars more in “potential” tax revenue.
A report in The Riverside Press-Enterprise explores how much more money the state could be seeing if it changed its tax system.
“From no sales tax on tractor purchases to special business-friendly zones in San Bernardino and elsewhere, tax-benefit programs total more than $40 billion in lost general fund revenue in the current budget year and almost $43 billion in the next one, according to the most recent estimate by Gov. Arnold Schwarzenegger’s Department of Finance.”
The Enterprise goes on further to write that the state could simply lose more money in tax revenue via the Governor’s latest proposal for more tax credits.
“His proposed jobs package includes a $10,000 tax credit for buyers of existing homes and a proposal to exempt green technology manufacturing equipment from the state’s sales tax, at unknown cost to the general fund.”
Health cuts to California seniors: A recent report is highlighting how Schwarzenegger’s budget proposal will impact California’s elderly population.
According to a fact sheet released by The SCAN Foundation, an organization that assists California seniors, the $4 billion cut proposed for the Health and Human Services Agency will “significantly” affect seniors.
The organization says, because some senior citizens rely greatly on public health services, some may no longer be eligible. According to SCAN, services would be eliminated to 87 percent of recipients or 426,733 people by June 1 because of new requirements.
“Shoring up the state’s ever-increasing budget deficit is undoubtedly a top priority,” said Dr. Bruce Chernof, president and CEO of The SCAN Foundation. “However the proposed cuts have the potential to eliminate long-standing programs that provide the state’s growing senior population with critical services to remain independent in the community.”
Food stamps for farmers’ markets: California lawmakers are joining others nationwide in considering measures to help farmers’ markets get equipment to accept electronic food stamp cards.
Many hope the efforts will expand the menu of fresh food options available to those in need as food stamp enrollment soars.
The nonprofit California Budget Project says enrollment in the federal food stamp program grew by 43 percent in California from October 2007 until October 2009.
The National Conference of State Legislatures says ballooning food stamp programs also have prompted lawmakers in Indiana, Illinois, Texas, Vermont and other states to propose laws that would make it easier for farmers markets to get and use the machines.
Associated Press writer Cathy Bussewitz contributed to this report. Hoa Quach is the political editor for the San Diego News Network.