PD Editorial: Turbo pols

The state Legislature adjourned its regular session for 2009 last weekend without passing several important measures. Among them:

• A bill that would have saved cities and counties $200 million in borrowing costs to backfill funds lost when the state took $1.9 billion of local money over the summer.

• A bill that would have secured at least $42 million — and possibly much more — recently allocated by the federal government to deal with the swine flu epidemic.

• A bill allowing state Treasurer Bill Lockyer to renegotiate letters of credit with banks, saving the state about $150 million this year.

All three bills sailed through the Assembly, on unanimous or nearly unanimous votes, but stalled in the Senate in a dispute over ... Turbotax.

Yes, Turbotax, the popular but pricey income-tax software, whose maker wants a bigger share of the California market.

A news account in Saturday’s paper said Republicans in the state Senate were withholding votes from any measure requiring a two-thirds majority, a list of about 20 bills, including the three described above.

The Turbotax connection was made in a subsequent report in the Los Angeles Times.

Intuit, the Silicon Valley software company that makes Turbotax, has long opposed ReadyReturn, a state service to file simple tax returns online for free. And Intuit has aggressively challenged the five-year-old program, spending $618,000 on lobbying since 2007 and donating campaign cash to 29 of 40 senators.

Republican senators said their Democratic colleagues agreed to put the ReadyReturn program to a vote as part of the deal that ended the state budget standoff. In addition to ReadyReturn, another report said, GOP senators were demanding a vote to expand some of the corporate tax breaks passed earlier this year (as the state’s deficit soared and individual taxes were increased).

When those votes didn’t materialize, Republicans used their leverage to block other legislation.

“I’ve always thought it was wrong to use taxpayer dollars to compete with private enterprise,” state Sen. Tony Strickland, R-Moorpark, told the Times, which pointed out that Intuit spent $1 million on behalf of Strickland’s unsuccessful bid to become state controller in 2006.

Strickland, following the custom of politics, said he saw no conflict of interest. But we do.

According to the Franchise Tax Board, fewer than 2 million people qualify to use the state’s free online return. To use it, you must be single or file as head of household, have no income other than wages, no more than one employer in the past year and no more than five dependents. And you can’t itemize your deductions. In practice, this almost certainly means you’re a low-income taxpayer.

A study covering the first two years of the ReadyReturn program found that about 10,000 people used it annually, and they had a median income of about $33,000.

To deny them a simple method for filing tax returns, Republican senators drove up the cost of borrowing for state and local government, potentially forcing more cuts on cities and counties, and gave up federal money for swine flu.

The Legislature’s approval rating hovers around 20 percent. On this day, for Republican senators, that may be too generous.