3% Withholding Dead Again (For Now).

The 3% IC withholding proposal which we defeated 3 times last year was again on the table last week courtesy of Senate President Darrell Steinberg. Those of you at Indian Wells recall the discussion that the idea would be in play again this year as it would presumably bring in an estimated $2.5 billion dollars to off-set the $20+ billion projected deficit. Of course the money would come in this year and have to be refunded next year digging an even deeper hole for the 2011 budget – but thinking a year ahead has never been a strong point in Sacramento. Last week we were called on to lobby our Senators on this issue to keep it from coming to a floor vote or to defeat it if it did. It comes as no surprise that Senate Minority Leader Senator Dennis Hollingsworth was solidly in our camp having called Steinberg on it as soon as he resurrected the idea.

Yesterday the Senate Budget Committee, in its wisdom, decided not to bring up independent contractor withholding for a vote at its meeting. For the time being, we’ve won, but Steinberg is expected to push it again later in the year as the budget fight heats up.

For those members concerned about their $49 investment in political survival, you might ask them if they would rather have paid the extra 3% ($90 out of pocket on a $3,000 commission). This is what the $49 does – not travel for Directors, not salaries for lobbyists and not to pay for Chief Economist Lawrence Yun.

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