MOORLACH UPDATE — Award, Rankings and More Taxes — June 21, 2019

This week I had the opportunity to honor a dear friend, fellow C.P.A. Mark Wille. Mark and I became acquainted some 27 years ago when he performed my firm’s peer review. It was the first such exercise for Balser, Horowitz, Frank & Wakeling, An Accountancy Corporation, as it was a new industry requirement, and I fared well.

As we are encouraged to recognize businesses in our Districts every year, it only made sense to recognize a Certified Public Accountant. And since my old firm is located some fifty feet outside of my District, Mark was the natural.

In 2018, I recognized the family law practice of Hughes & Hughes (see MOORLACH UPDATE — Janus Decision — June 28, 2018). My recipient in 2017 was the Newport Beach Veterinary Hospital (see MOORLACH UPDATE — Alumni and Recognition — June 7, 2017).

The Orange County Business Journal was recognized in 2016 (see MOORLACH UPDATE — Taxportation Chronicles — June 4, 2016). And my first recipient, back in 2015, was Zov’s Restaurants (see MOORLACH UPDATE — SB 593 — June 10, 2015).

The Daily Pilot and the Orange County Breeze were kind enough to announce the news in the first and second pieces below. Thank you, Mark and Vicki Wille, for coming up and enjoying Sacramento for a couple of days.

It’s the beginning of summer, and many of the comprehensive annual financial reports (CAFRs) for the fiscal year ended June 30, 2018 are still outstanding. They are trickling in one or two a day, but we still do not have the complete set for the 50 states, and, for California, 58 counties, 482 cities and 944 school districts.

One city, Compton, hasn’t completed its CAFR since 2013. Now there’s a story for the local press in LA. We hope to publish the results of the per capita unrestricted net positions for the state, county and local levels soon.

Last year’s report on the school districts is still being referred to and Culver City Unified School District received a cynical barb in the Culver City Observer, which is the third piece below (see MOORLACH UPDATE — California School District Rankings, Group 13 — August 28, 2018).

Yesterday, the Senate approved a cell phone tax increase. Speaking of the continuation of yet more tax increases, your gas tax goes up another 5.6 cents in ten days. The LA Times reminds us of this upcoming burden in the fourth piece below (see MOORLACH UPDATE — Big Gas and Electric Costs — May 21, 2019).

Let me provide you with a friendly reminder that Gov. Brown intentionally kept spending on road repairs flat during his eight years in office, even as gas tax revenues rose, thus creating an artificial crisis to justify the need for a gas tax increase. He did the same during his first stint as governor, 1975-83. At least Orange County voters improved their roads by passing the self-help initiatives known as Measure M, the first time in 1990 and the second time in 2006. Consequently, you can tell where the LA County line is when you’re driving north on the Santa Ana Freeway.

Moorlach names Newport Beach CPA as district Small Business of the Year


State Sen. John Moorlach (R-Costa Mesa) recently presented Newport Beach-based Mark F. Wille, CPA, with the Small Business of the Year award for the 37th Senate District.

Along with its professional services, the firm has helped several charitable, philanthropic and nonprofit causes, according to a news release.

“Mark has been a pioneer in performing peer reviews for certified public accounting firms and has been a respected continuing professional education presenter and author,” Moorlach said in a statement.

Moorlach names Mark F. Wille, C.P.A. Small Business of the Year

Today, Senator John M. W. Moorlach (R- Costa Mesa) presented the Small Business of the Year Award to Mark F. Wille, C.P.A., A Professional Accountancy Corporation for the 37th Senate District.

“Mark F. Wille, CPA has become a recognized personal and business advisor for the Orange County community since 1987. Mark has been a pioneer in performing peer reviews for Certified Public Accounting firms and has been a respected continuing professional education presenter and author. In fact, he focuses 20 percent of his consultation time serving accounting practices. I am privileged to present this accountancy firm with this award,” said Moorlach.

Since the founding of the firm more than 30 years ago, they have assisted countless businesses to realize their dreams of sustainability and growth through their customized individual approach to each client they serve. In addition, Wille and the firm are service minded; they have assisted multiple charitable and service-oriented organizations. Wille also serves in various leadership positions with philanthropic and nonprofit causes such as the Boy Scouts of America and the Orange County Audit Oversight Committee.

This article was released by the Office of Senator John Moorlach.

Will CCUSD Seek Another Parcel Tax?

School Board President Claims, “We have no money”

By Neil Rubenstein
Observer Columnist

Is it possible? I spoke to the President of the Culver City Board of Education at the Clayton Library and Museum on Sunday, June 8, 2019. My question, “Are you going to put another parcel tax for us to vote on?” Well, Kelly Kent said, “We don’t have any money”. For those of us who have a fifth-grade memory will clearly remember a commentary from May 2019 when the Governor told us how much dough was in the pipeline. Although the exact amount hasn’t been decided the exact size of check just might be much, much larger to accommodate all those zeroes. The bigger question is where did all that tax money go? I just bet many of you remember State Senator John Moorlach’s fiscal responsibility rating of all the school districts in the Golden State. If we are honest with each other we would admit the Board doesn’t seem, in my opinion, to have a long-range policy other than throwing money at various projects. It just might take the strong hand of Superintendent Dr. Lockhard talking behind closed doors. How many more parcel tax increases do we get before the district hires a professional to audit the books.

California gas tax goes up July 1, but leaders say road repairs need even more money


California is poised to charge the highest taxes and fees on gas in the country when an increase kicks in July 1, but officials say the state is still billions of dollars short of what’s needed to properly fix the roads and are considering additional charges.

The gasoline tax is set to climb by 5.6 cents per gallon, the second in a wave of increases approved by state leaders two years ago to raise billions of dollars for road and bridge repairs and mass transit.

Combined with a 12-cent increase that took effect in November 2017, the taxes and vehicle fees approved in a bill known as SB 1 are projected to add $5.4 billion in the coming year to transportation funding.

But officials estimate $130 billion is needed to bring the state’s roads and bridges into a state of good repair. The gas tax increases of 2017 will raise some $52 billion during the first 10 years but that will leave a road repair shortfall of approximately $78 billion.

The tax does not expire after 10 years and will continue to grow with the cost of living in future decades.

“The current funding is not sufficient, it is not enough,” said Tony Akel, a Fresno engineer who is a leader of the American Society of Civil Engineers. “We know that there is a big gap that is a result of years of underfunding.”

The group just released a study that gives California’s roads a “D” grade, saying they are among the worst in the country. State Sen. Jim Beall (D-San Jose), who authored the gas tax measure, said the evaluation appears accurate, but argued it is not a failure of the tax measure, just too early an assessment.

“You won’t see the impact of SB 1 for another couple of years,” Beall said. “The grades are based on actual conditions, and the SB 1 projects are underway but they are not finished. Road conditions will improve.”

The state has completed about 100 transportation projects and 400 more are in the works, according to the administration of Gov. Gavin Newsom.

Projects funded so far include $135.9 million to improve 104 lane miles of Interstate 605 and $54.9 million for 99 lane miles of State Route 1 in Los Angeles County. Projects completed so far include repaving a stretch of Interstate 5 between the 605 and Washington Boulevard in Los Angeles County.

“SB 1 was never expected to completely fund all backlog work, but it has given us a great start to making up for years of underfunding,” said Jeff Burdick, a spokesman for Caltrans.

The increase taking effect next month means the total state taxes and fees on gasoline will be 57.8 cents per gallon, based on the current average price of gas across California.

That will just edge out the 57.6 cents-per-gallon charged by Pennsylvania. Washington state will remain in third place, charging motorists 49.4 cents per gallon.

(Some of the California tax is based on a percentage of the cost of a gallon of gas, so a significant drop in prices could cause the overall tax to drop — at least temporarily — below Pennsylvania’s.)

Alaska and Missouri have the lowest gas taxes in the country, with per-gallon charges of 14.34 and 17.35 cents respectively, according to the American Petroleum Institute. Motorists in all states also pay 18.4 cents per gallon in federal fuel taxes.

“California will be number one in another category that it shouldn’t be number one in,” said state Sen. John Moorlach (R-Costa Mesa), who opposed SB 1 as it made its way through the Legislature. “These incremental increases drive people nuts. They are trying to meet their budgets, and we keep pounding away at it.”

Assembly Democrats, in a 49-17 vote, on Monday blocked an attempt by Republicans to postpone the July tax hike. “Democrats reaffirmed their support for a regressive gas tax increase that punishes every Californian who can’t afford a Tesla,” said Assemblyman Devon Mathis (R-Visalia). “So much for being the party of working people.”

SB 1 calls for additional annual increases to California’s gas tax based on inflation starting July 1, 2020.

Beall, the chairman of the Senate Transportation Committee, agreed with the assessment of the engineers’ group that current revenue is insufficient.

“Money went to local [agencies] from the gas tax, but they still need more,” Beall said, adding that the federal government needs to increase its funding for roads, while counties also can go to their voters for local sales tax increases for transportation projects.

Voters in Riverside County are among those who may be asked next year to raise taxes to fill a funding shortfall to fix the roads.

The Riverside County Transportation Commission has launched a study to determine how to make up a $12.6-billion gap between its transportation needs and expected funding over the next 20 years, according to Cheryl Donahue, a manager at the agency.

“As part of its review, the commission will determine whether asking county voters to consider a sales tax measure to fund transportation improvements is part of the best overall approach to reducing congestion and improving mobility,” Donahue said.

The San Diego Metropolitan Transit System also is considering whether to ask voters to increase the sales tax by up to one-half cent next year to pay for transit, highway and road improvements, spokesman Rob Schupp said. The San Diego Assn. of Governments released a poll in March that found strong voter support for such a tax, with 70% of those surveyed saying “improving roads to support transit services” is important.

Voters in San Mateo and San Benito counties approved sales tax increases in November for road projects.

Moorlach said Orange County, where he lives, has approved two local tax measures to fund its transportation needs in recent years, and he does not have a problem with other counties following suit.

The group Move L.A. has proposed a grander plan, suggesting that raising local sales taxes by a half-cent in Los Angeles, Orange, San Bernardino and Riverside counties could bring in about $1.5 billion per year for public projects.

Much of the money would go to South Coast Air Quality Management District efforts to increase non-polluting transportation, including electric cars and trucks. But some could be spent on infrastructure including bike and pedestrian lanes, which SB 1 finances.

The air district has sponsored a bill, SB 732, that would allow it to ask voters to raise the sales tax by up to 1% in the four counties. The legislation is expected to be taken up next year.

State law requires a two-thirds vote to approve a local tax increase for transportation, but a pair of other pending bills could make approval easier. A bill in the Legislature would put a measure on the November 2020 statewide ballot that would allow cities, counties and special districts to impose taxes if 55% of local voters approve. The measure would benefit projects involving affordable housing and infrastructure, including improvements to transit and streets and highways.

Another bill, AB 1413, would allow local transportation agencies like San Diego’s to seek voter approval of tax increases in any portion of the county, so if some areas want better roads they can vote on them. The measure would allow communities to pay for “improving roads, transit, highways, or other transportation infrastructure as they see fit,” said Assemblyman Todd Gloria (D-San Diego).

But the Howard Jarvis Taxpayers Assn. argued agencies “shouldn’t be able to pick and choose among their tax base to make it easier to increase regressive sales taxes.”

State lawmakers also are considering a bill that would charge a 10% tax on every barrel of oil pumped from the ground in California to bring in some $900 million annually. That, critics say, would mean motorists will pay more at the pump. Backers of the bill deny there would be a significant impact on drivers.

Money raised by the bill would go to the general fund but could help with transportation, said Sen. Bob Wieckowski (D-Fremont), the legislation’s author.

“While other states have brought in billions of dollars for their constituents through an oil severance tax, California has had to dip into its own pockets to cover extensive clean-up costs brought about by the oil industry’s irresponsible actions,” Wieckowski said. “Californians deserve better.”


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