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Yacht tax?

Posted: March 26, 2008 4:58 p.m.
Updated: May 24, 2008 5:02 a.m.
 
To The Editor:

:In Ms. Wright's letter ("Republicans: Foes of Education," March 14, 2008) she insinuates that the Hart School District budget deficit was caused by the Republicans' reluctance to do away with the so-called "Yacht Tax." It would be best to know exactly what this tax really is.

If you were to buy a yacht or a plane in the state of California, you would have to pay a sales tax, just like any other item that would be taxable in the state.

Until June 2006, if you bought the same items out of state, you were required to keep it out of California for 12 months. If you brought it into the state before that period, you were required to pay a "use tax." This tax was at the same rate as the sales tax would have been.

This provision expired on June 30, 2006. After that date the requirement was set at only 90 days. If the bill in question had passed, all that would have happened is the waiting time would have been reset to 12 months.

According to state budget experts, the money brought in by these taxes and fees would be $5 million for the rest of the 2007-08 fiscal year, and $21 million for the 2008-09 fiscal year. After the cuts in the budgets for those same fiscal years, the state will have in the area of a $1 billion reserve this year and a $7 billion to $8 billion deficit next year.

The $5 million that would have been added to this year's budget would only add .5 percent to the expected reserve. The $21 million expected for fiscal year 2008-09 would only lower the deficit .25 percent.
Both of these amounts are optimistic at best, as many experts believe that most of the yachts and planes purchased out of state would stay the entire 12 months if the yacht tax bill had passed.

Hart school district's budget deficit will not change from its current amount even if the vote on this bill is reversed and it passes. The most that the district would expect to see from this tax money would be in the area of $10,000, or about .25 percent of a beginning teacher's annual salary.

Ms. Wright needs to look other places to vent her anger. Maybe she should look at many of the failed programs that were introduced by the Democrats in the state Legislature that have cost us billions of dollars.

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