CA sales tax dips, tax burden rises

Good morning! It’s Friday. Let’s get down to business. 

“Four years ago, voters approved Proposition 30, which raised the income tax significantly on the wealthiest Californians and raised the sales tax a tiny bit on everyone,” Capital Public Radio recently recalled. “That quarter-of-a-cent increase equated to paying an additional $0.01 on a $4 coffee; $1 on a $400 television; and $100 on a $40,000 car.” 

But on Election Day 2016, that changed. “Voters extended Proposition 30’s income tax increases in [November’s] presidential election with Proposition 55 — but that initiative allowed the Prop. 30 sales tax hike to expire.”

The shift means California’s sales tax is the state’s only tax to be decreased this year, from 7.5 percent to 7.25 percent.

As the U-T reported, “Some local jurisdictions tack on their own assessments, so residents in certain areas will still pay more than the statewide rate.” In certain parts of the state, like the San Francisco Bay Area, voters allowed substantial increases. 

CalWatchdog has more. 

In other news:

• Health Care: “As Washington grapples with health care policy again, the head of the 185,000-member National Nurses United is turning her attention to a seemingly unlikely advocate for a single-payer system. ‘The one I’m counting on the most is Trump,’ RoseAnn DeMoro said. DeMoro, who serves as executive director of both the Oakland-based National Nurses United and the California Nurses Association, told POLITICO California on Thursday that she is ‘disgusted’ with Democrats like House Minority Leader Nancy Pelosi and believes that the president-elect may actually get action.” Politico has more. 

• Minimum wage: “San Diego is cracking down on several restaurants that city officials say are adding surcharges in misleading and illegal ways to help cover increased labor costs from the minimum wage hike that took effect Jan. 1.” The San Diego Union-Tribune has more. 

• Budget: “But recent events in California and the nation suggest the fiscal proposal Brown unveils next week could be his most circumspect to date, even after voters in November approved billions of dollars in additional taxes,” reports the Los Angeles Times. 

• Obamacare: “House Majority Leader Kevin McCarthy has written to Gov. Jerry Brown and the leaders of other states soliciting their input for replacing Obamacare.” The Sacramento Bee has more. 

Legislature:

• Back on Monday. 

Gov. Brown:

• On vacation in Hawaii until Sunday, according to The Sacramento Bee. 

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In 2012, Brown and other measure backers repeatedly stressed that the tax hikes were temporary. He dismissed critics who said this promise was being made insincerely and his support was seen as crucial to persuading 55 percent of voters to approve the tax increases.

But as soon as the campaign was won, the big players behind Prop. 30 — the California Teachers Union and the California Federation of Teachers, as well as other government unions — indicated that it was an open question whether they would try to extend the increase in either or both taxes.

According to a Nexis search, it was in January 2014 — 14 months after Prop. 30 passed — when behind-the-scenes talk about an extension became public. That’s when state Superintendent of Public Instruction Tom Torlakson, long closely allied with the CTA and CFT, said extensions were needed. Four months later, state Sen. Mark Leno, D-San Francisco, spoke at a hometown rally in favor of more budget dollars for schools and social programs. Leno said extending Prop. 30 made sense because the state’s needs wouldn’t go away when the taxes expired.

After the rally, he told the San Francisco Chronicle, “The state of California will be in sad shape if the money sunsets and there’s no replacement for it.” The Chronicle framed Leno’s statement as putting “him on a collision course with the governor, who used the fixed time limit as a selling point for the measure.”

The same article introduced some telling nuance into Brown’s position. An aide told the Chronicle that the governor “has said that if the state is going to increase taxes, the people will have to vote for it” — reframing his 2012 promise as less than absolute.

Budget revenue rhetoric hinted at fight ahead

But in May 2015, Brown appeared to be returning to his hard line — temporary meant temporary. That month, the state’s Department of Finance put out a revised 2015-16 state budget that seemed to explicitly foreshadow Brown’s opposition to an extension of either or both tax hikes.

The San Jose Mercury News reported that “tucked away on one of the final pages of the 104-page summary of the spending plan was a surprising revelation: Not only will the budget survive when Proposition 30’s temporary taxes are phased out, but general fund revenues are also expected to continue climbing.”

Why would Brown’s budget plan explicitly make this point? To political observers, it felt like a “shots fired” moment.

“Politicians sometimes find themselves in strange positions when the lines of battle shift — and clearly this is one of those times,” Bill Whalen of Stanford’s Hoover Institution told the Mercury News.

It may have seemed clear then. But the expected fight never happened. Union consultants agreed to Brown’s demand that the extension of the Prop. 30 income tax hike — which affects single taxpayers making more than about $260,000 and joint filers making more than $520,000 — not be structured in a way that kept money out of a state rainy-day fund established by voters in 2014. His end of the deal seems to be mostly keeping quiet about the issue.

At a May 13 budget press conference, the governor again refused to decline or endorse the coming campaign to add 12 years to the “temporary” income tax hike. But he hinted at budget pain if it fails.

“If the tax doesn’t pass, we’ll manage. We will have cuts,” Brown said, according to the Sacramento Business Journal.

A measure backed by the California Teachers Association would extend Prop. 30’s higher tax rates on the wealthiest Californians until 2030, with an estimated $7.5 billion each year going to public schools and community colleges.

 

Another measure, this one by the California Hospital Association and the Service Employees International Union-United Healthcare Workers West, makes those higher tax rates permanent and sends half the annual estimated $10 billion to public schools, colleges and universities, 40 percent to Medi-Cal for low-income health care and 10 percent for early childhood development programs. It also imposes a new, higher tax rate on those who make more than $1 million annually. …

 

[Negotiators] for the teachers group and the hospital association have been talking about a third option, which would extend Prop. 30’s higher tax rates and split the money between schools and health programs. That measure is awaiting approval from the state Attorney General’s Office, and a decision about whether to aim that initiative for the ballot won’t be made until later this month. …

 

“We’d prefer one measure, especially on a crowded ballot,” said Gale Kaufman, a political consultant working on the teachers’ measure. “My instincts say less is better always, but it’s difficult to have any hard and fast rules.”

The focus isn’t just on income tax ballot measures, though they have gotten the most early attention. The Chronicle notes that the Making Poverty History initiative “would add a surcharge to the tax bill for land and buildings with an assessed value of $3 million or more. The $6 billion raised annually would go toward programs to reduce poverty in the state, including prenatal services, expanded child care, tax credits and job training grants.”

Steyer follows Schwarzenegger strategy

Tom Steyer, the billionaire environmentalist who is exploring a 2018 run for governor, also is looking to make a political name for himself with a ballot measure, as Arnold Schwarzenegger did in 2002 with Proposition 49, a successful ballot measure funding after-school programs, a year before the recall election that ousted Gov. Gray Davis.

Steyer is behind the Save Lives California campaign, which would use a $2-a-pack tax on cigarettes to shore up state Medi-Cal funding and to pay for health-promotion and anti-smoking programs.

A previous ballot measure that successfully raised cigarette taxes was also sponsored by a non-politician believed to be interested in running for governor. Championed by Hollywood producer-director-actor Rob Reiner, Proposition 10 added a 50-cent levy on a pack of cigarettes, with proceeds used mostly to fund early childhood education programs.

But Reiner, unlike Schwarzenegger, never ran for state office.

Schools and universities from the smallest unified school district to the top-tier university systems in the state issued more bonds in 2015 than they had i

A CalWatchdog analysis of data for the year shows 465 securities issuances from education entities. Some were refunding issuances — refinancing existing bonds — but the majority were general obligation bonds, which rely on taxation for repayment.

Most of the issuances came from school districts, charter schools and education districts, while 64 were directly tied to a single community college district or public university system.

A driving factor in the boost in issuances is the increase in real estate values in much of the state, said Kevin Carlin, a San Diego-based public interest attorney with a public works construction background.

“There is a limit in bond measure (regulations) that says you can’t issue more than a certain percentage of assessed value in a district. So once you get maxed out on the value limit, you have to wait for those limits to go up.”

The voter-approved bonds are part of a continued spending surge on education in the state.

In November, voters will decide on $9 billion in school construction bonds. It’s the first statewide education bond measure since 2006. The issue is propped up by big money from the construction and engineering industries and so far has drawn little opposition. The measure was qualified for the ballot via a push from the California Building Industry Association.

Bond measures are easier to pass now than they were before 2000, when Proposition 39 allowed for passage with 55 percent of the vote rather than two-thirds, as before, said Mike Turnipseed, a watchdog in Kern County.

“The threshold was changed, and today, over 80 percent of bond proposals are approved,” he said. “If cities want to issue bonds, it takes the two-thirds approval, but not schools.”

With the bond issuances come big projects. Add to that numerous funding mechanisms. The state’s School Facility Program earlier this year signed off on $113.6 million for 22 districts to use for various voter-approved projects. The program helps school districts with matching funds or to reimburse districts for finished endeavors.

Higher education spending grows faster than enrollment

At California State University in Sacramento, where enrollment grew 2 percent between 2003 and 2014, a $91 million science building has been approved.

The University of California Board of Regents approved spending $7 million for what will eventually be a $150 million research building for the Riverside campus. It will house 40 to 50 new faculty members. Enrollment at UC Riverside has increased 2 percent since 2012. Full-time employee ranks, meanwhile, have grown 20 percent.

“The only way to best serve our students and California is to grow our faculty,” UCR Chancellor Kim A. Wilcox told a subcommittee of the Regents at a September meeting.

The Milpitas School Board in San Jose agreed to pay architectural firm Gould Evans $2.2 million for the design of an elementary school. The school board is set to purchase 6.7 acres from the city for $21 million.

The school district in Oakland this month issued a request for proposals to upgrade kitchens in 16 schools with a budget of $15 million.

Meantime, schools and colleges continue to hire.

The City College of San Francisco will bring on 55 new full-time faculty and 46 administration workers.

University of California regents in July approved salary increases to executives. One executive, UC Berkeley Chancellor Nicholas Dirks, received a 3 percent increase to $516,446 annually.

RELATED:  Developer lobby promoting $9 billion education bond

Between 2001 and 2014, California voters approved $146.1 billion in bond debt for school and college districts, according to a study published in July by the California Policy Center.

“The idea that people are forming is this assumption that property values will skyrocket forever,” said Kevin Dayton, the author of the study. “That way it won’t be so painful for the kids to pay it off as adults. But this is all built on predictions and we have no idea if this will come true.”

The bond debt comes in addition to the billions of dollars handed over to school districts from the passage of Proposition 30 in 2012 which included an additional levy on income over $250,000 as well as a ¼ cent increase in the state sales and use tax.

The revenue is earmarked for education. To date, $13.1 billion has been raised through the taxes.

Many of the schools are spending the money on salaries and benefits, according to the state’s Proposition 30 tracking site. For example, at Harnett Community College District, $5.3 million went to salaries and benefits while $103,000 went to athletics, art, diesel mechanics and a theater group, Western Stage.  

The figures cover the 2012-2013 school year; the usage report for the 2013-2014 year is not completed yet.

Steve Miller can be reached at 517-775-9952 and avalanche50@hotmail.com. His website is www.Avalanche50.com

In 2013, the California Legislature approved a dramatic change in how schools were given state dollars in adopting the Local Control Funding Formula (LCFF). The law was sold with the promise it would provide extra funding directly to the education of students who were English learners, the category of kids whom Gov. Jerry Brown had said were particularly crucial to California’s future.

It’s now December 2014, and the evidence keeps building that the primary use of both Prop. 30 and LCFF funds has been to respond to pent-up teacher union demands for pay raises.

This is from last week in the San Francisco Chronicle:

San Francisco teachers overwhelmingly approved a new contract Thursday night that gives them a 12 percent pay increase over the three-year term, union officials said.

More than 78 percent of the 2,799 teachers voting approved the terms of the contract …

This is from Wednesday in the Los Angeles Newspaper Group’s family of papers:

United Teachers Los Angeles President Alex Caputo-Pearl will not be fulfilling his campaign promise of a double-digit pay raise this year, as union leadership backed down from demands for an immediate 10 percent hike.

The 35,000-member teachers union met Tuesday with negotiators for the Los Angeles Unified School District and proposed a 9 percent raise this school year paired with negotiations for additional raises the following year. However, leaders for the school district say they can’t afford to meet the demand.

LAUSD’s latest offer — 4.02 percent in bonuses and an additional 2 percent salary increase to be paid over the next seven months — is $80 million less, and because most of it would be in the form of one-time bonuses, the two sides are divided by $188 million per year in permanent salary hikes.

This is from Tuesday’s San Jose Mercury-News, which reports on a district where elected officials actually seem to remember the promises made about Prop. 30 and the LCFF.

SAN JOSE — Bargaining between teachers and the East Side Union High School District appears to have hit a wall.

The district has requested that the Public Employee Relations Board declare an impasse and appoint a state mediator, the district announced Monday.

In its latest offer, the district proposed a 5 percent salary increase, plus 1 percent more in the spring if the Legislature allocates more funds to school districts. The East Side Teachers Association rejected that offer on Friday, the district announced in a letter to staff and parents.

This diversion phenomenon hasn’t gotten much attention yet. However, when the Vergara v. California case reaches the appeals court level, it seems likely to be used by reformers as a telling new example of how major players in California’s education establishment value the interests of teachers over students.

The current conventional wisdom is that he’s likely to end up back with the Heat. Under NBA rules intended to help teams keep their stars, he can make the most guaranteed money with Miami — a five-year, $129 million deal, averaging $25.8 million a year. Other teams can offer him at most a four-year, $96 million deal (average: $24 million a year).

But in 2010, the last time LeBron was a free agent, he didn’t take the maximum available from his old team, Cleveland, or even from Miami. He took less money because he wanted to join a team ready to make championship runs, and that’s just what happened with the Heat, which made the finals four straight years, winning twice.

So what are the loaded teams this time around? Two teams jump out — the Los Angeles Clippers and the Houston Rockets, which each have two of the 20 or so best players in the league to team with LeBron.

Millions more available in Houston, Miami

But if money is at all a factor for LeBron — not just his salary but how much of a tax bite he faces on his estimated $42 million in annual endorsements — than Proposition 30 is going to hurt the Clippers’ chances badly.

The sting of Prop. 30 on high earners first was highlighted by a sports story in January 2013, when golfer Phil Mickelson said he was considering leaving Rancho Santa Fe and San Diego County because of high taxes. Another San Diegan, small-government crusader Richard Rider, subsequently explained why Mickelson had reason to grouse:

“Here’s the fact that EVERYONE (including me) initially undervalued concerning Mickelson and CA state income taxes. Starting in 2013, Mickelson’s NET state income tax has jumped 83.6%!  And yes, this huge increase hits most Californians making more than $2 million income.

“Here’s why. Until 2013, state income taxes were deductible for federal income tax purposes. Starting in 2013, for the really rich, this deductibility largely goes away (as does deducting property taxes and many other deductions). For people with over $2 million of income, they lose 80% of such deductions.

“With Proposition 30 passed in November, CA has raised its income tax on the wealthy by 29%. The combined tax increase is breathtaking. Do the math, and you find that in 2011 the net CA income tax for Mickelson was 6.7%. In 2013 his net CA income tax is 12.3% — an increase of 83.6%.”

Because of this huge bite, assuming James’ endorsements remained at $42 million, if he played for the Clippers and made $24 million, he would face a 51 percent effective tax rate on his $66 million in income, meaning he would take home a little bit more than $32 million.

Clippers fans can blame CA Dems if LeBron stays away

If he played for Houston, in a state that has no income tax, his 39 percent effective tax rate on $66 million in income means he would take home a little bit more than $40 million. That’s only slightly less then he would make if he returns to Miami, in another state that has no income tax. In Florida, his 39 percent effective tax rate on $67.8 million in income means he would take home about $41.4 million.

Now obviously this is a simplistic calculation of his taxes, which would be subject to other factors, especially given the complex ways many states target the income of visiting pro athletes. But the bottom line is pretty inescapable: Houston and Miami have huge advantages over the Clippers on the money front.

LeBron James may not care about how much money he makes at this point in his life. And one of his very best friends, Chris Paul, is a superstar point guard with the Clippers, where the coach is Doc Rivers, another LeBron favorite.

But if his decision is a close call and he doesn’t choose the Clippers, it’s fair to give some of the blame to Proposition 30 and the confiscatory policies of the California Democratic Party.

The San Diego native has made news for years with his gambling, showing his contempt for societal norms attempting to dictate to adults how they should enjoy themselves.

In January 2013, Mickelson made the Drudge Report (and Cal Watchdog)  for grousing about how high his income taxes had become because of the passage of Proposition 30 and federal deduction changes. Here’s Richard Rider’s sharp take on the flap.

Now it’s onto another area in which Lefty acts out in libertarian fashion: taking on (very indirectly) America’s weird and broad rules about insider trading.

So legendary investor Carl Icahn and pro golf superstar Mickelson have a casual golf buddy in common: Las Vegas gambling-biz figure William “Billy” Walters.

Icahn and Mickelson, however, don’t know each other.

Yet when Walters shares an Icahn tip with Mickelson, once again there are Drudge headlines about Mickelson, this time suggesting he is guilty of insider trading.

If that constitutes a crime, that’s insane. Some of the coverage hints that this is only the tip of the iceberg. But if this is all the FBI and SEC have, oh, my.

So let’s headline the obvious question:

What’s next for Phil, Stealth Libertarian Crusader?

Will he go speeding and then be bludgeoned for demanding that he be allowed to tape the interrogation after the CHP pulls him over?

Will he go rad and complain that the great majority of stop signs should be yield signs?

Or will Mickelson go micro and foment local civil unrest over the preposterous fact that the manager of the Rancho Santa Fe homeowners assocation makes at least $275,000 a year?

We’ll see. It’s an exciting time to be a Phil fan.

It is easily demonstrated that in some cases, no, revenue wasn’t depressed by a tax hike. Marginal increases in state sales taxes aren’t generally driving revenue decreases.

But it is also easily demonstrated with some other higher taxes that individuals and businesses do in fact respond with changes in behavior that decrease economic activity.

Incentives drive behavior

It appears a ballyhooed 2012 ballot measure closing a supposed corporate tax ‘loophole’ falls in the latter category. This is from Cabinet Report:

“Proposition 39 or the California Clean Energy Jobs Act changed a corporate tax law to require multi-state or out-of-state businesses to source their sales of services and intangibles to the state where they were sold, rather than the state where the majority of work to produce them was performed. As a result, supporters of the plan expected that California – the nation’s biggest consumer – would see a big uptick in revenues. …

“Anti-tax advocates have long argued that imposing new taxes on businesses and higher wage earners hurts California in the long run because those targeted adjust their practices or relocate to avoid paying more. … It is an issue that the Brown administration is reportedly keeping a close eye on because of the income tax hike another November measure – Proposition 30 – imposed on the state’s top earners.

“Proposition 39 was aimed at corporate taxes, but some of the same issues are at work.

“Based on 2010 income tax data, the Brown administration estimated that Proposition 39 would bring in $928 million in 2013-14 and nearly $1 billion annually the next four years. But 2011 data showing a drop in those revenues forced the governor to revise Prop. 39 figures downward to $675 million in the current year and $726 million in 2014-15 budget.”

Runner is right

Cabinet Report puts this in perspective by talking to former state Sen. George Runner, who’s now on the Board of Equalization:

“We do a terrible job in all of our estimating of doing any kind of dynamic analysis that takes into consideration what the behavior of a taxpayer’s going to be. … One of the issues I always keep telling people is that tax policy changes behavior, and as a result of that, often times you’ll find government over estimates what it is that revenues are going to be because they forgot to or they can’t, sometimes, take into consideration the behavior of the taxpayer.”

Or maybe it’s that they refuse to “take into consideration the behavior of the taxpayer.”

Set to expire in 2018, it was sold to voters as a temporary tax.

“’We need to renew Prop. 30,’ Torlakson, the state Superintendent of Public Instruction, said Wednesday night at a coffee meeting with local PTA leaders in a Sacramento home,” the Sacramento Bee reported online.

Two days later, the Bee did a newspaper story  (and put it online) about that same meeting with Torlakson in a private home. But those pieces said the meeting was to talk to parents and teachers about the new Common Core state education standards. There was no mention of Torlakson’s call to extend Prop. 30 in the newspaper version of the story, yet both stories were written by Bee reporter Diana Lambert.

Perhaps Torlakson had an early copy of the Legislative Analyst’s Office 2014-15 fiscal review.

“As Proposition 30 Personal Income Tax increases phase out, much slower revenue growth forecasted,” the LAO headline said.

“Under Proposition 30, the increase in Personal Income Tax rates for high–income taxpayers generates a much greater proportion of revenue than the sales tax increase,” the LAO report found.

Under a hypothetical recession, the LAO explained, “the revenue losses would be offset somewhat by lower Proposition 98 minimum requirements, and we assume that the state would reduce spending to the lower allowed spending levels.”

The LAO warned against overcommitting, which could bring back budget shortfalls.

General fund spending

The California Personal Income Tax is two–thirds of the annual general fund revenues.

“We note, however, that the proportion of the general fund supported by PIT revenues likely would be growing even if Proposition 30 were not in effect due to more income concentration among the highest–income taxpayers and the other factors described earlier,” the LAO said.

Remember when Gov. Jerry Brown was campaigning to pass Prop. 30? “The taxes that I’m proposing on sales and higher income people goes to the schools — 100 percent of it,” the Los Angeles Times reported Brown saying. “But it goes in a way that integrates it with the budget itself.”

(Note: The L.A. Times stories with this quote are no longer available; the story linked is in the Press Democrat, but is a column by L.A. Times columnist George Skelton.)

However, what Brown wasn’t saying is that when state revenue increases, so does school funding, automatically. Proposition 98, passed in 1988 by the voters, guarantees K-12 public schools and community colleges about 40 percent of the general fund. So when general fund revenues go up, so does school spending. Conversely, when general fund revenues are reduced, school spending is also reduced.

“The first 18 months of the tax hike would raise $9 billion, according to the state Finance Department. Schools would be entitled to $3.8 billion, or 42 percent. The remaining $5.2 billion, or 58 percent, would be earmarked for budget balancing,” Skelton wrote.

So schools would not be receiving the bulk of the tax increase revenues. Is it any wonder Torlakson want to prolong the tax hike — other than a promise made to voters?

One of the groups accused of the “campaign money laundering,” the Center to Protect Patient Rights, plans to announce today it has resolved its portion of its legal dispute with the FPPC.

The issue was $11 million in Super PAC money contributed to fight the Gov. Jerry Brown's ballot initiative to increase sales and income taxes through Proposition 30, and the ballot initiative which would have weakened the political power of labor unions, Proposition 32.

There was relatively little media interest in the $66 million raised by organized labor to fight passage of Prop. 32, including $20 million from the California Teachers Association.

The $11 million donation made headlines and generated a controversy because of its source — an unknown Phoenix group called Americans for Responsible Leadership.

The Center to Protect Patient Rights, was the other Arizona organization involved in the donation.

FPPC Chairwoman Ann Ravel ordered agency attorneys to demand that Americans for Responsible Leadership disclose the contribution’s original donors,  after California Common Cause filed a complaint. When the groups would not, Ravel and Attorney General Kamala Harris opened a formal inquiry into the group’s donation to the Small Business Action Committee.

Settlement

“The California Fair Political Practices Commission has announced that the legal dispute over the filing of CPPR’s reports last year has been completely and finally settled,” said Sean Noble, President of the CPPR in an email.

“CPPR is pleased the Commission determined that the organization never intended to violate campaign reporting rules nor did it intend to conceal information from the public. CPPR ‘inadvertently’ erred largely because it had never previously made any contributions in the State of California,” said Noble.

“CPPR will remain vigilant in its work to encourage and support likeminded groups and individuals, and educate the public on issues related to limited government, free enterprise, and the protection of patient rights.”

The settlement seem large given the group was absolved of intentional wrongdoing.

Center to Protect Patient Rights

The first part of this civil dispute was settled last November when disclosure letters were filed prior to the 2012 election.

CPPR’s filing with the FPPC in 2012 was the organization’s first and only in the State of California, according to a source close to the case. Yet, the filing attracted more than its fair share of scrutiny from those on the left who disagree with CPPR’s mission of working to keep the United States financially and fiscally sound.

Many charged the controversial $11 million contribution came from the despised Koch brothers, who give to conservative causes. The recipient of the  donation was Sacramento-based Small Business Action Committee PAC and its No on Proposition 30/Yes on Proposition 32 efforts.

The FPPC made clear in the settlement that CPPR made an “inadvertent” error, but acted in “good faith” and never intended to violate campaign reporting rules.

However, another source who asked for anonymity because the details of the settlement have not been formally announced by the FPPC anticipates closure of this matter will not be enough to satisfy some on the left, and said these individuals and organizations will take every opportunity to try to silence those they disagree with.

The total FPPC settlement is $1 million, to be broken out among the accused groups.

The source said the unprecedented size of the financial settlement over an issue that amounts to an inadvertent filing error is a glaring example of the Commission’s power over non-profit organizations that pursue a constitutionally guaranteed right of free speech in elections.

Government overreach – think IRS scandal

According to my source, the FPPC overreach is similar to the IRS’s disturbing overreach with “conservative” non-profit organizations and Tea Party groups. “Americans should be rightly concerned about any misuse of power by government political ‘watchdogs’ against legitimate non-profit organizations,” the source said.