Council's State Legislation Committee (O'Donnell, Johnson, Garcia) Votes 3-0 To Recommend Full Council Endorse SB 1243 (Would Let Shippers Continue To Avoid Paying Full Amount of CA's Sales/Use Tax On Marine Fuel)
No Committee member asks about State Bd of Equalization estimate that continuing exemption will cost state approx. $90-137.5 million annually (incl. local revenue losses), so LBReport.com asks about this; hear Committee members' responses
|(June 12, 2012) -- As seen LIVE on LBReport.com, on Monday June 11 the City Council's State Legislation Committee (chair O'Donnell, vice chair Johnson, member Garcia) voted 3-0 to recommend that the full City Council endorse SB 1243, a bill that the state Board of Equalization estimates would cost the state from $92 million to $137.5 million each year -- including a revenue portion for local entities -- by letting shippers continue to avoid paying CA's sales/use tax on a portion of the fuel they buy.
Supporters of the bill include multiple maritime and cargo-related interests (listed below) who say the measure will protect local jobs and keep Port-related businesses competitive. Ordinary consumers who purchase gasoline for their motor vehicles pay the full amount of CA's sales/use tax on each gallon of gasoline they buy.
The bill, whose primary author is state Senator Alan Lowenthal (D, LB-Paramount), passed the state Senate on May 30 with no "no" votes either on the Senate floor or in any Senate Committee. Sen. Lowenthal is running for Congress in a newly drawn LB-west OC Congressional seat...and his November runoff opponent, LB Councilman Gary DeLong, has previously indicated that he supports the sales tax exemption policy reflected in SB 1243. The measure is now in the state Assembly, where it is
Committee chair O'Donnell agendized the item for June 11 with a "support" recommendation" (city staff said it had no recommendation and was awaiting Council guidance). The item appeared on line shortly before the June 5 election that brought O'Donnell a third Council term after he initially sought the Assembly seat now held by Bonnie Lowenthal (who initially sought a state Senate seat, then switched back to the Assembly).
When no members of the Committee asked about the continuing state and local revenue losses, LBReport.com quickly went to the speaker's podium, cited the Board of Equalization's figures and asked the Committee members about this. To hear our our question and the Committee members' responses, click here. [In a later exchange, City staffer Tom Modica explicitly acknowledged that a lower figure by the state Legislative Analyst's Office reflects estimates made roughly 10-15 years ago.]
Following the exchange, three speakers came to the podium to speak in support of the bill: a retired member and a current member from Boatman's Union/ILWU and a representative of Foss Maritime.
To view the state Senate's floor analysis of the bill, click here.
In its written legislative analysis of the measure, the State Board of Equalization stated in pertinent part [bracketed material by us for clarity]:
The state Senate's legislative analysis listed the bills supporters/opponents as follows as of May 25:
The Senate floor analysis listed no opposition.
The state legislature faces a looming state budget deficit (spending exceeding revenue) approaching $16 billion. Governor Brown and multiple Dem lawmakers favor a November ballot measure that would increase the state sales tax by a quarter percent and increase the state income tax on high income earners.
Shortly after voting to approve the industry-sought exemption from paying part of the state sales tax, Committee member Garcia said he'd like to see the Committee and the Council support the ballot measure in the coming weeks. Committee chair O'Donnell and vice chair Johnson both nodded their heads in agreement.
Governor Brown's Dept. of Finance indicated in a Senate Appropriations Committee hearing that it had "no position" on the bill.
Contact us: mail@LBReport.com
Hardwood Floor Specialists
Call (562) 422-2800 or (714) 836-7050
Contact us: mail@LBReport.com