More pain, despite modest good news

APRIL 12, 2010

By STEVEN GREENHUT

State officials have been optimistic about the state controller’s March cash receipts report that provided good news about burgeoning sales-tax revenues, but the Legislative Analyst’s Office released a letter today — the same one provided to legislators on March 19 — warning that “it is unlikely that increased revenues will allow the state to avoid making the types of very difficult budgetary decisions for 2010-11 that we have identified as necessary in our recent publications.”

The good news is that the state received $1.2 billion more revenue this year than last year thanks mainly to sales tax increases. As the Sacramento Bee reported Monday, “The cash registers are starting to ring again in California,” thanks to new retail spending. One analyst argued in the Bee report that the federal tax cuts are boosting spending in California, even though the state is still mired in a deep recession with a 12.5 percent unemployment rate.

“Year-to-date receipts are ahead of budget estimates by $1.94 billion, or 3.9 percent,” according to the controller’s statement.  “The state’s cash position was $2.15 billion ahead of projected levels on February 28.” Controller John Chiang suggests that the worst of the recession may be past, although he warns that “we still face cash challenges later in the summer absent enactment of further credible and sustainable budget and cash solutions.”

Legislative Analyst Mac Taylor detailed the following reasons for caution in regards to the economy and the overall California budget situation:

  • “We expect the lingering effects of the bursting of the housing bubble and the subsequent financial crisis to continue to dampen growth in California. In particular, relatively weak demand for new residential and commercial construction are leading us to have somewhat lower expectations  of growth in the out-years compared to our previous economic forecasts.”
  • “We are concerned that the higher monthly revenue levels are not entirely consistent with the underlying economic indicators.”
  • “In considering how new revenues may affect the size of the state’s budget problem, it is important to keep in mind that a large portion of each additional dollar in new state revenues will be required to go to current-law Proposition 98 school funding obligations. Specifically, we estimate that up to about 60 percent of the newly identified revenues above our current forecast will be required to go to these Proposition 98 obligations. While this helps schools, it means that ‘new’ revenues provide much less budgetary solution than on first blush.”

Still, the good news means that California is estimated to have a $19 billion budget hole rather than the $21 billion deficit previously projected. Many observers fear that legislators will see the new economic and budgetary improvement as reason to delay substantial reform, as they wait for the state to “grow” its way out of its budgetary shortfall. Here is Taylor again: “The state continues to face a stubborn annual gap between current-law revenues and expenditures of about $20 billion for each year through at leat 2014-15. The Legislature still faces incredibly daunting challenges in balancing the budget this year.”

The state still faces tough times ahead, despite the unexpected good news.

6 comments

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  1. StevefromSacto
    StevefromSacto 12 April, 2010, 14:37

    Hey Steve, why don’t you do a story on the following list? You add up all these delinquencies, you could make a dent in the state’s budget deficit. But of course, that wouldn’t be as much fun as attackiing state employees and cutting the homecare budget for people with Alzheimer’s.

    Tax Delinquents 4/12/10

    Halsey M. and Shannon Minor
    San Francisco, CA 94105 $13,120,479.39 Personal income tax 07/21/2009

    Asset Liquidation Group, Inc.
    La Puente, CA 91746 $ 8,349,084.20 Corporate income tax 09/25/2009

    Mark C. Yurgelevic
    Orinda, CA 94563 $ 7,404,749.68 Personal income tax 02/27/2003

    Michael A. Vrab
    Corona, CA 92883 $ 5,665,831.47 Personal income tax 05/04/2009

    Jeffry C. Howard
    San Diego, CA 92130 $ 5,392,256.97 Personal income tax 10/02/2002

    Kevin D. Mitchell
    San Diego, CA 92113 $ 5,184,641.51 Personal income tax 07/06/2000

    Van Rex Gourmet Foods, Inc.
    Thousand Oaks, CA 91360 $ 4,300,112.66 Corporate income tax 04/14/2008

    Michael J. Fanghella
    San Diego, CA 92663 $ 4,108,016.03 Personal income tax 10/20/2009

    Andy H. Duong aka An Hong Doung
    Corona, CA 92879 $ 3,638,619.17 Personal income tax 05/20/2009

    Vito J. Caruso, M.D. Inc., A Professional Corporation
    Tustin, CA 92780 $ 2,730,561.68 Corporate income tax 10/20/2009

    Aaron H. Haaz
    Encino, CA 91436 $ 2,693,906.99 Personal income tax 12/10/2009

    Baldomero De Leon, Jr, M.D., Inc.
    Walnut Creek, CA 94598 $ 2,685,573.30 Corporate income tax 07/17/2006

    Cary W. Medill
    Beverly Hills, CA 90210 $ 2,645,654.79 Personal income tax 10/19/2007

    Stuart J. Gourlay, M.D., A Professional Corporation
    Pinole, CA 94564 $ 2,623,698.20 Corporate income tax 11/16/2009

    Scott A. and Kelli A. Walchek
    Danville, CA 94526 $ 2,596,958.85 Personal income tax 04/02/2009

    Lamont H. and Barbara U. Dozier
    Tarzana, CA 91356 $ 2,572,597.25 Personal income tax 11/02/2004

    Stephanie Burrell
    Tracy, CA 95304 $ 2,360,951.60 Personal income tax 10/05/2005

    Debra R. Judelson, M.D., Inc.
    Beverly Hills, CA 90211 $ 2,264,682.81 Corporate income tax 06/25/2008

    Steven and Cynthia Bren
    Laguna Beach, CA 92651 $ 2,209,561.23 Personal income tax 03/20/2009

    Marvin T. Levin
    Walnut Creek, CA 94596 $ 2,093,990.40 Personal income tax 07/02/2008

    William Boehringer
    Huntington Beach, CA 92605 $ 2,029,971.89 Personal income tax 01/22/2009

    Vianey Ramirez
    Castaic, CA 91384 $ 1,844,467.06 Personal income tax 12/02/2008

    Robert Taylor
    Apple Valley, CA 92308 $ 1,841,860.58 Personal income tax 03/19/2008

    Canyon Pacific OB/GYN Medical Associates, Inc.
    Irvine, CA 92618 $ 1,788,458.32 Corporate income tax 04/14/2008

    Patricia D. and William P. Johnson
    Temecula, CA 92591 $ 1,781,067.82 Personal income tax 10/19/2000

    Donald S. Mayekawa, M.D.,Inc.
    Santa Monica CA 90404 $ 1,713,623.00 Corporate income tax 01/15/2009

    Leroy L. Carver III
    Eugene, OR 97405 $ 1,618,024.13 Personal income tax 02/04/2005

    Hasuna Ayyad
    Aptos, CA 95003 $ 1,573,496.71 Personal income tax 11/26/2008

    Eveready Bonds II, Inc.
    Thousand Oaks, CA 91359 $ 1,457,858.36 Corporate income tax 04/02/2008

    Hezekiah N. Moore, M.D., A Professional Corporation
    Long Beach, CA 90804 $ 1,446,047.24 Corporate income tax 07/24/2009

    William G. Wells
    Santa Monica, CA 90406 $ 1,365,685.02 Personal income tax 12/11/1997

    Roland C. Colton
    Laguna Niguel, CA 92677 $ 1,291,811.18 Personal income tax 05/07/1996

    Kenneth J. Roberts
    Los Angeles, CA 90067 $ 1,260,544.78 Personal income tax 02/23/2009

    Terry L. and Peggy J. Moreland
    Bakersfield, CA 93309 $ 1,242,812.50 Personal income tax 01/24/2008

    Pediatric ID, A Medical Group, Inc.
    Long Beach, CA 90806 $ 1,238,621.83 Corporate income tax 07/29/2009

    James A. Saadi, M.D., Inc.
    Woodinville, WA 98072 $ 1,220,648.27 Corporate income tax 07/01/2009

    Charles A. Mitchell
    Barksdale AFB, LA 71110 $ 1,209,607.95 Personal income tax 12/15/2003

    Augustin A. Lin, D.O., Inc.
    Chino, CA 91710 $ 1,195,234.71 Corporate income tax 10/27/2008

    Quality Medical DBA Happy Care
    Redlands, CA 92373 $ 1,192,486.45 Corporate income tax 10/19/2009

    Byron E. Congdon
    San Bernardino, CA 92408 $ 1,171,037.20 Personal income tax 01/26/2001

    Yusaku Uchimura, M.D., Inc.
    Agoura Hills, CA 91376 $ 1,162,104.24 Corporate income tax 10/10/2008

    Yianni and Victoria Michaelides
    Riverside, CA 92504 $ 1,117,742.06 Personal income tax 03/30/2009

    Lazarus Technologies, Inc.
    San Francisco, CA 94103 $ 1,107,548.20 Corporate income tax 06/04/2008

    Behnoush Panahpour
    Woodland Hills, CA 91364 $ 1,095,195.11 Personal income tax 11/25/2009

    William J. and Laura J. Levy
    Santa Barbara, CA 93110 $ 1,090,818.97 Personal income tax 10/09/2007

    Mark A. Nahabedian
    Ojai, CA 93023 $ 1,090,585.42 Personal income tax 04/30/2009

    Kern W. Schumacher
    Reno, NV 89521 $ 1,012,257.70 Personal income tax 12/24/2009

    Frank M. and Linda K. Dileo
    Wellsville, OH 43968 $ 1,001,238.11 Personal income tax 03/15/1993

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  2. EastBayLarry
    EastBayLarry 12 April, 2010, 18:46

    StevefromSacto:
    Why don’t you make this your project? You could make a large sign with the amount delinquint and parade back and forth at each of these addresses, shaming them into paying up.

    Let me know how that turns out.

    Reply this comment
  3. StevefromSacto
    StevefromSacto 13 April, 2010, 09:33

    Wish I had the time and the opportunity to shame these people. You’re damn right I’d do it. When our state budget is in crisis, everyone should bear some of the pain of fixing it. Problem is that the Rabid Right only wants to cut health, social services and education spending. Closing tax loopholes and forcing s.o.b.’s like these to pay their fair share is off the table.

    However, making large signs and parading back and forth sounds more like the Tea Baggers. Not my cup of tea, thank you.

    Reply this comment
  4. AyatollahGondola
    AyatollahGondola 30 May, 2010, 11:10

    Many of the companies that have debts the magnitude of the ones listed in your post are defunct. They have no address to carry signs in front of. It is likely that most of the debtors have no assets or are no longer in a position to pay anything.
    Van Rex gourmet foods for example. they filed a BK, and the assets were sold off to another company.
    There’s nothing wrong with parading back and forth with a sign. It beats the hell out complaining on a message board

    Reply this comment
  5. DavidfromLosGatos
    DavidfromLosGatos 5 June, 2010, 11:44

    OJ Simpson was towards the top of the CA tax deadbeat list for many years – did CA finally give up on him? I see Kevin Mitchell is in the top ten with a cool $5M owed (from 2000!). He’s not hitting the fast ball anymore, or catching them bare-handed, so I wouldn’t hold my breath for that money to come in. (And if he owes CA $5M, I wonder what he owes the Feds!)

    StevefromSacto – which loopholes are you seeking to close? I’d like to get in on some while they’re still “open.”

    Reply this comment
  6. DavidfromLosGatos
    DavidfromLosGatos 5 June, 2010, 12:49

    I also see that Pamela “Dancing Star” Anderson owes $500K to CA. A cool quarter million per breast. (Maybe those are loopholes?)

    Reply this comment

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