Poor, Elderly Would Get Tax Rebate Under Bill by Brown

About 650,000 mostly poor and elderly Californians who missed out on income tax rebates last year would get another chance for a rebate under legislation introduced Tuesday by Assembly Speaker Willie Brown.

The new round of rebates called for in the legislation would cost $21 million and come from part of the roughly $42 million that remains from last year’s budget surplus.

Targets of the legislation are Californians, most of them 62 and older, who did not have to file income tax returns because their incomes were below the minimum standards for filing or who were eligible for renter credits and senior citizen property tax relief.

$32 and $64 Maximums

Under the legislation, the rebates would be limited to a maximum of $32 for individuals and $64 for married couples. Those eligible would have to apply for the money.

Brown said he introduced the rebate bill to pick up most of those who “fell through the cracks” because of the way the tax rebate legislation was written last year.

The law last year declared that the rebates would automatically go to all those who filed income taxes by the April 15 deadline. Those who were not recorded as filing by the deadline were left out in the computerized check writing process, even though they would have been eligible, Brown said.

Brown said his office received numerous complaints from taxpayers wondering why they did not receive their rebate checks.

The Speaker said he had not shown the bill to Gov. George Deukmejian. He predicted that the legislation would win strong support in the Legislature. All the incumbents in the Assembly are up for reelection this year.

“I bet you I’ll have more co-authors on it than anything else that’s been done,” Brown said.

Last year’s rebates, paid from a $1.1-billion budget surplus, were required by a 1979 voter-approved initiative that created a spending limit for government and required that any excess tax revenues be returned to taxpayers.

The maximum rebate was $272 for married couples and $136 for single taxpayers.

Aside from the older and poorer groups already covered in his bill, Brown is considering including another major group of taxpayers who missed out on the earlier rebates. They are the 362,000 Californians who the Franchise Tax Board said filed their returns after the April 15 tax deadline without applying for an extension as required by law.

“These are people who procrastinated and filed after the due date. They were penalized by not receiving a rebate. The law wasn’t meant to penalize them, but it did,” said Jim Reber, a spokesman for the Franchise Tax Board.

Reber said that the Franchise Tax Board had not estimated what it would cost to extend rebates to this group, but it could be considerable because many of these taxpayers would be eligible for the maximum $272 rebate, rather than the $32 and $64 minimums.

Exactly how much of the 1986 surplus is left is not known.

State Finance Director Jesse R. Huff said the best estimate is that the pool of leftover funds adds up to about $42 million, but he said that number could drop once the final accounting is completed on the 1986-87 fiscal year.

The Franchise Tax Board estimates that the surplus is now between $36 million and $38 million.

Huff, who serves in Deukmejian’s Cabinet, said the governor so far had not taken a position on either the Brown proposal or some other means of distributing the leftover tax funds.

“We’re looking into it,” Huff said.