From the time I was in t-ball, my dad always used to tell me that I needed to use two hands when catching pop ups. Sure, 99 times out of 100 it’s no big deal, and the out is made. But then there’s that other one…
It’s with that in mind that I write about the last night’s budget votes.
Throughout the night, the Assembly leaders hustled to get a budget, some budget, any budget passed. Negotiations took place. Concessions were made. Entire sections of the budget were rewritten hastily in the middle of the night, being fueled by cold pizza and colder coffee.
But last night, unfortunately, it seems someone forgot to remind our leadership to use both hands.
As part of the grand deal that was cut, the Research and Development tax credit for businesses was to be expanded, to provide conformity with the federal tax code relating to R&D. As part of the package that was agreed to, those provisions would then sunset in 5 years.
However, that isn’t exactly what made it’s way into the final product.
Instead of those provisions sunsetting in 5 years, the budget as written sunsets the entire section of the tax code relating to R&D, thus cutting whatever breaks currently exist for businesses.
The Franchise Tax Board estimates this will result in a $600 million tax increase on California businesses.
Now, while I’m assuming this was simply a drafting error, it nonetheless is part of the bill that passed the State Assembly last night/earlier this morning.
I’m sure most of the Republicans in the Assembly were aghast when they found out what it is they’d actually voted for. But the problem is that the damage had already been done. And call me skeptical, but I’m none too confident that Don Perata is going to be any too sympathetic or willing to offer Senate Republicans a do-over, or a $600 million tax cut – at least not without requiring significant concessions elsewhere.
Now these negotiations are still ongoing, but it goes to show, the principles taught to Little Leaguers throughout the country apply even in the halls of government –when it matters: take your time, and do it right. You don’t get a do-over.
Here’s to hoping the Senate Republican Caucus remember these lessons and use both hands.