VBJ July 2021

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THE VALLEY BUSINESS JOURNAL 22 www.TheValleyBusinessJournal.com July 2021 Hornswoggled Voters Approve $1 Billion/Year Tax on their Heirs REAL ESTATE by Steve Fillingim by Gene Wunderlich In 1986 California voters overwhelmingly voted to pass Proposition 58. This amendment to the California constitution excluded from reassessment property transfers between parents and children. What that meant was that a parent could provide their home to pass to their children without taxing the children out of the home by continuing the Prop 13 tax base. A decade later with the passage of Prop 193, the exemption was expanded to include grandparents. This became a favorite with parents and grandparents as a means of estate planning, benefitting both parents and children. Until last year that is, that is. California voters were hornswoggled into voting for the deceptively labeled ‘Home Protection for Seniors, Severely Disabled, Families and Victims of Wildfire or Natural Disasters Act’. A sweet title that painted an appealing picture. But nowhere in that grandiose title does it mention ‘$1 billion tax increase on your kids and grandkids.’ No, that’s the part that got buried by some very crafty internment specialists. All the hype was focused in Paragraph 1, allowing those over 55 to transfer their Prop 13 tax base from one house to another (tax portability), but scant attention was paid to Paragraph 2, the one that will burden your heirs with an estimated $1 billion a year in new tax revenue to the state (intergenerational transfer). As you might imagine, now that the law is about to kick in, folks are finding out what a pig-in-a-poke their vote bought. Suddenly their financial advisors are telling them if they leave a house to their kid, it’s likely the property tax bill will leap by factors of 10 or more, depending on when they bought. If the kid doesn’t move into that house as their principle residence, their tax bill would increase from whatever their old Prop 13 tax base was, to ‘current market value’ as determined by the state. But what if the kid is 50 years old and already has a principle residence, maybe in another state? And what if you have 2 or 3+ kids? Which one has to move in? Do they all? And what if you’re a grandparent who has worked hard and lived frugally to the age of 94 and want to leave your small house in Garden Grove that you’ve lived in since 1957 to your grandchildren as a way of giving your heirs a step up on the economic ladder – something increasingly hard to achieve for our youth in California? Nope, Prop 19 eliminated those opportunities for you and yours and replaced it with yet another tax that will be borne by our children and grandchildren. It’s hard to imagine anything more callous than the government sending a giant tax bill to a bereaved family, but here we are. A quick tutorial on how we got here. Back in 2018 the California Association of Realtors got Prop 5 on the ballot. Prop 5 was all the good stuff in Prop 19 (tax portability) with none of the bad. ‘None of the bad’ meant no tax increase. But if it doesn’t increase taxes, the perception was painted that it would probably cost money – especially money that certain unions were salivating over. With that kind of opposition, the measure failed. But as with many measures in Sacramento, this kind of stuff never actually ‘dies’, it just lurks around Zombie-like to reemerge again later. And remerge it did. In order to sweeten the pot (i.e. quid pro quo, buy-off) the opposition, the measure that emerged last year now included Paragraph 2, tax on intergenerational transfer with the proceeds accruing to? Well you didn’t hear about any union opposition, did you? Realtors spent over $40 million to get the new measure on the ballot only to back out at the last minute as a replacement measure emerged from the Legislature as ACA 11. If anything, ACA 11 was worse than the original but because proponents buried the tax increase, a slim majority of voters were snookered. Sadly, snookering voters in California is becoming a full time industry for some California entrepreneurs, and it’s surprisingly easy to do. Over the years California voters have strongly opposed state inheritance taxes, which were abolished by constitutional amendment in 1982. Proposition 19 has effectively resurrected the inheritance tax in California, with the added burden that families must pay it every year as a condition of keeping their property. But help may be on the way. Realizing early on that this is a fiscal disaster in the making for many California families, Senator Patricia Bates introduced SB 668, a bill to delay the effective date of the rules governing intergenerational transfer allowing families to adjust to this sea change. Assembly member Kevin Kiley (he’s the one suing Gov. Newsom over the lockdown) has introduced ACA 9, a measure that would fully restore Prop 58 (1986) and Prop 193 (1996), allowing parents and grandparents to once again pass along property to the next generation without reassessment. Will it work? Well, both bills are authored by Republicans, they propose to reduce tax revenue to the state/union supporters, and they will have to fight their way through the Democratic mega-majority in both houses. SB 668, the bill to delay, is still stuck in its first committee. A ‘working group’ has been convened to ‘study the issue’. ACA 9 has yet to be referred out to a committee even for discussion and we’re over halfway through the session. Chances of relief based on that scenario are slim and none, and slim is headed for the door. But hope springs eternal. So, if you see our local representatives – Senator Melendez, Assembly members Seyarto or Waldron, thank them for the hard work they’re attempting on our behalf against overwhelming odds. And let them know you’re not OK with the state milking another billion out of your kid’s pockets. They’re not OK with it either.
July 2021 THE VALLEY BUSINESS JOURNAL www.TheValleyBusinessJournal.com 23 MURRIETA ROTARY OFFICERS & DIRECTORS CONTINUED FROM PAGE 1 Steve Nicholson will take office July 1 to serve as President of the Rotary Club of Murrieta for the 2021/22 Rotary year, succeeding Lou Ellen Ficke. Director of Operations at Temecula Hyundai, Nicholson has lived in the Murrieta area for 20 years and has extensive experience in all areas of automobile dealer operations. He is a graduate of Liberty University with a degree in Biblical students. He has served on nonprofit boards like Quality West Wing, Uncle Bud’s and ARC Angel Foundation. Steve attends Calvary Chapel Chino Hills and has for some 30 years, serving the children’s and men’s ministries. He also facilitates a Men’s Bible Study with Calvary Chapel Murrieta and has been a baseball chaplain for the Angel’s organization. Serving with Steve: John Brown, president-elect while LouEllen Ficke will be the immediate past president. Patsy Orr serves as Executive Secretary, and LouEllen Ficke is Treasurer. Saomorn Wong is Foundation Chair, and Administration, Dawn Layton. BECOMING KNOWN AS AN EXPERT CONTINUED FROM PAGE 1 One sure way to show your expertise is to write a book. This may include lessons learned and best practices. Most importantly include how your business can and has solved the problems that your customers have brought to you. Writing a book may sound like an overwhelming task but there are techniques for breaking down the project. First put together an outline of the story you wish to tell. This will help you stay on track. Next, write your ideas down as they come to you. Carrying a deck of 3x5 cards is a great way to organize thoughts and ideas. When something comes to you, put it on a card. Then as you sit down to write, organize these cards by chapter and use them as starting points to develop an idea. To keep progressing, set goals. Figure out how much time you can commit to writing, whether it be a few pages a day or a chapter a week. You’ll know what you can do so make it fits your schedule. Stay on this timetable the best you can and before you know it, you’ll have a manuscript ready for publishing. If you’re not ready for a book, consider writing short articles to publish in an industry related magazine, on your website or offering a printed copy available at your place of business. This will provide an additional service to customers and clients while showing your depth of knowledge. Club Directors are: Vocational Services, Kelly Orchard; Community Service, Jim Yanoschik; Youth Services, Jody Lawlor and Liz Jones; Membership, John Brown; International, Doreen Tate and Public Relations, Linda Dozier. The club serves the City of Murrieta and surrounding area and is involved in international projects in cooperation with Rotary International which has as its ongoing theme “Service Above Self.” Chartered on April 28, 1992, the Murrieta Club is known for several signature projects including the Murrieta Field of Honor, which will celebrate its 13th year in November. Rotary is one of the largest international humanitarian service organizations in the world, with 1.2 million members in some 32,000 clubs in more than 200 countries and geographic areas. Rotary began in 1905 in Chicago and serves the needs of local communities around the world. One last popular method is creating a video and posting it on a sharing site. Some professionals will demonstrate simple home improvement work, automotive repair and other tasks where watching can help learn. Contact information is included prominently that many times results in new business. With a little imagination an interesting video can be created for any business. No matter which method you choose be sure to share this information in your store and on your website. Let your customers get to know you. Ted Saul is a business coach that assists with Business Plans and Project Management. He earned is MBA from Regis University along with a masters in project management. He is also ITIL 4.0 certified. Ted can be reached on LinkedIn or emailing TedSaulbiz@gmail.com. “ One sure way to show your expertise is to write a book. Local Student Earns Prestigious Award Tahquitz High School Student Elijah O’Leary, age 15 has served his community well – and his efforts have not gone unnoticed. Part of his voluntary accomplishments that has earned him The Congressional Award, Bronze Certificate is for volunteering at the Annual Angel Tree Christmas Party with the Community Outreach Ministry. The ministry, cofounded in 2000 by Dr. Mona Davies and her husband Bob, is a nonprofit organization dedicated to improving the lives of girls and boys like O’Leary, whose mother is in and out of prison. Now under the care of a relative, the high school student never lets any obstacles of having an incarcerated mother stop him from either achieving his goals or choosing to help others along the way. The Congressional Award offers young Americans the opportunity to be recognized for their service in four program areas including voluntary public service and youth up to the age of 24 can earn Bronze, Silver, and Gold Certificates as well as Bronze, Silver, and Gold Medals according to the website https://www.congressionalaward.org. The award accommodates young people with special needs or disabilities who are willing to take the challenge and achieve their goals. The Congressional Award is not based upon grade point average; however, Elijah is a high academic achiever with support from his caregiver. O’Leary’s great grandmother in San Diego cared and helped by tutoring him at home, picking him up from school, and meeting with his teachers until her death. Although his dad was also in San Diego, both mom and dad have been absentee parents. Elijah has had to face harsh realities as a young boy, and he is grateful for his great grandmother who intervened and demonstrated her love for him. Community Outreach Ministry offers a multitude of programs and services to at-risk children in Riverside County impacted by parental incarceration. From “Gearing Up For STEM” Mentor Protégé Workshops to camping activities and guidance on available community resources, the nonprofit organization also helps youth celebrate the holidays through numerous events including its annual Angel Tree Christmas Party. In partnership with the Prison Fellowship Angel Tree Program®, boys and girls like O’Leary are invited to a traditional holiday celebration replete with gifts, catered meals, and live entertainment. O’Leary participated in these activities over the years, and he decided to give back to his community by volunteering his time at events like this as a teen because he understood how important it was to celebrate the holiday season despite having neither his mother nor father to share in the moment. As a three-year-old, O’Leary began to receive Christmas gifts from his incarcerated mother and remembers how getting those gifts was important to him. At first, those gifts were all he received which is what motivated him to volunteer his time when he was older. His caregiver has encouraged him to register for The Congressional Award Program and he is now well on his way toward earning the Silver Certificate. O’Leary has a heart for baseball and is a player on the Murrieta Red Wolves Colt team. He has also registered with the Red Cross and is taking a first-aid course for dogs as well as walking dogs in his community. Donations for events hosted by Community Outreach Ministry are always welcome. Visit htttps://www. communityoutreachministry.org or send a text to DONATE CHAMPIONS to 609- 212-0627. For more information call 951-698-7650 or email the nonprofit group at info@communityoutreachministry.org.
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Page 15 and 16: July 2021 Murrieta’s Gal Graduate
Page 17 and 18: July 2021 Eye Protection by Pat Utn
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VBJ July 2021

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