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- Written by: Editor
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- Written by: Editor
OAKLAND – With tax season quickly approaching, Attorney General Edmund G. Brown Jr. is urging Californians to avoid high-cost tax-refund-anticipation loans, which force taxpayers to "borrow their own money," include numerous fees and can carry triple-digit annual interest rates.
According to the National Consumer Law Center (NCLC) and Consumer Federation of America (CFA), refund-anticipation loans cost 8.4 million American taxpayers more than $800 million in 2008.
"As tax season begins, hardworking Californians should avoid tax-refund-anticipation loans and any tax preparer who advertises these loans as early tax refunds," Brown said. "These loans carry steep interest rates and push taxpayers to borrow their own money instead of collecting their full refunds."
A refund-anticipation loan is a short-term loan secured by a taxpayer's anticipated income-tax refund. To obtain a tax-refund loan, taxpayers file electronically with a tax preparer who works directly with a bank to advance the refund as a loan- minus tax-preparation costs, a loan fee and other charges. The Internal Revenue Service (IRS) then sends the taxpayer's full refund to the bank.
According to NCLC and CFA, loan fees can range from $34 to $130 and other add-ons alternately referred to as application, administrative, e-filing, service bureau, transmission, or processing fees can range from $25 to several hundred dollars.
Tax refunds are available at no charge from the IRS. Taxpayers who file electronically and have their refund directly deposited by the IRS into their bank account will usually have their refunds in 8-15 days.
According to the IRS, refund-anticipation lenders often target low-income taxpayers, especially those who receive the Earned Income Tax Credit. Brown urges taxpayers who are considering tax-refund-anticipation loans to take advantage of the IRS's support programs.
These include:
The Volunteer Income Tax Assistance Program (VITA) Program, which offers free tax help to low to moderate-income people and members of the armed services; and
The Tax Counseling for the Elderly (TCE) Program, which provides free tax help to people aged 60 and older.
More information on these programs is available at www.irs.gov/individuals/article/0,,id=107626,00.html .
Some taxpayers may also qualify for free federal income-tax preparation and electronic filing through the Free File program, a partnership between the IRS and the Free File Alliance LLC, a group of private sector tax software companies. More information is available at: www.irs.gov/efile/article/0,,id=118986,00.html .
Taxpayers can also locate their nearest free tax service by calling the IRS at 1-800-829-1040.
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- Written by: Office of the State Controller
SACRAMENTO – State Controller John Chiang has nveiled a new actuarial report that shows California faces a $51.8 billion bill to pay for health and dental benefits for state retirees.
“Even as we try to claw our way out of the recession and provide needed cash to the state’s coffers, we cannot ignore the promise that we made to pay health and dental benefits for current state employees and retirees,” Chiang said. “As I have since 2007, I urge lawmakers to reduce the impact on future generations by putting additional dollars into the annual payments so that we can invest those funds, grow that money and tackle our obligation in a responsible manner.”
The unfunded obligation as of June 30, 2009, grew $3.6 billion from the $48.2 billion obligation identified in the prior year. However, the 2008 figure was lower than expected primarily because the California Public Employees’ Retirement System (CalPERS) used surplus funds to reduce that year’s increase in health care premium costs rates for the CalPERS self-funded plan.
Unlike state pensions, which are covered by pre-funding and investment returns, California pays for retiree health benefits on a “pay-as-you-go” basis as the costs come due each year.
The latest actuarial report estimated California’s obligation for retiree health and dental benefits, also referred to as Other Postemployment Benefits (OPEB), based on two different funding scenarios:
The current pay-as-you-go policy results in an actuarial unfunded obligation of $51.8 billion, which represents the total present value of future retiree health benefits earned as of June 30, 2009, by current state retirees and employees. Based on this unfunded obligation, California has an annual OPEB cost of $3.9 billion for 2009-10 – or the amount the State would need to pay toward funding these benefits. In the 2009-10 Budget Act, the State only provided $1.3 billion for retirees’ health and dental benefits.
A full-funding policy results in an actuarial unfunded obligation of $33.4 billion. The amount is lower than the actuarial unfunded obligation under the pay-as-you-go policy because the costs of future benefits are fully pre-funded. Pre-funding permits the State to earn investment income on the amounts set aside to fund future benefits. That investment income can be used to help offset the costs. The State would need to contribute $2.8 billion in 2009-10 to fully fund its obligation. Fully funding retiree health care benefits increases cash contributions by 115 percent over the budgeted amount.
The report showed that even partially funding the obligation would cut the actuarial unfunded obligation to $41.1 billion, assuming the state paid $2.1 billion of the $3.3 billion needed to meet the obligation for 2009-10.
In 2004, the Governmental Accounting Standards Board Statement 45 (GASB 45) required states and local governments to publicly disclose the future costs of paying for post-employment benefits other than pensions for current state retirees and employees. Chiang commissioned California’s first report shortly after taking office in 2007. This report is the third to be issued under his administration.
All three actuarial reports focused on a “closed group” population, as required by the GASB reporting regulation. A “closed group” analysis reflects only the present value of retiree health benefits for current state employees and retirees. It does not include benefits associated with future state employees hired after the valuation date.
While GASB 45 does not require states to fully fund its obligations, all three credit rating agencies have urged states to at least have a funding plan in place to avoid any future downgrades.
The actuarial report and a chart comparing its findings with those in the two prior reports can be found on the Controller’s Web site at www.sco.ca.gov .
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- Written by: Lake County News Reports
KELSEYVILLE – The Redbud Audubon Society will host Dr. Floyd Hayes at the upcoming Thursday, Feb. 18, meeting at Kelseyville High School, Room 203, 5480 Main St., Kelseyville, starting at 7 p.m.
Dr. Hayes will present a program on the birds and wildlife of the Galapagos Islands.
Hayes is an associate professor at Pacific Union College and an avid birder. His PowerPoint presentation will focus on his research experience in the Galapagos Islands and studies of the unusual birds and wildlife there.
The Galapagos Islands comprise an archipelago of volcanic islands that straddle the equator approximately 900 kilometers west of the South American continent in the eastern Pacific Ocean.
The marine environments of the islands are influenced by two major oceanic currents: the westward-flowing South Equatorial Current at the surface and the eastward-flowing Equatorial Undercurrent below the surface.
The interactions of these currents with the El Nino/Southern Oscillation result in an oscillating climate affecting both marine and terrestrial ecosystems, Dr. Hayes explains.
Hayes is a widely published ornithologist whose research on birds has especially focused on the birds of South America and the Caribbean. Before his teaching appointment at Pacific Union College, he worked as a wildlife biologist in the US Virgin Islands.
The public is warmly encouraged to attend this event.
For more information about the Redbud Audubon Society, go to www.redbudaudubon.org .