Politics & Government

California lawmakers recycle ideas for balancing budget

When it comes to balancing the state budget, no idea ever wears out its welcome.

That explains why lawmakers are currently pondering a list of revenue raising proposals that bit the dust just last year.

Chief among them is a proposal to require private companies and government agencies to withhold 3 percent of payments they make to independent contractors.

That's a group estimated to consist of more than 3 million California taxi drivers, lawyers, farmers, miners, plumbers, real estate agents, food storage container salespeople, home builders and others who in essence act as their own bosses.

By withholding part of the payments as income tax and transmitting it to the state, the Franchise Tax Board estimates the state could pull in $1.4 billion during the year instead of having to wait until the contractors filed their tax returns.

Moreover, the FTB estimates that the forced withholding would produce an additional $140 million to $375 million per year that contractors don't pay now because they under report their income.

That would help close a fairly decent-sized chunk of the $19.9 billion budget gap the state faces over the next 17 months.

"We would be applying the same withholding rules to these businesses that we apply to people who work for employers," said state Senate President Pro Tem Darrell Steinberg, D-Sacramento, a leading proponent of the idea.

To read the complete article, visit www.sacbee.com.

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