Budget leaves yachts to mull

Deirdre Newman

The state legislature has passed Gov. Arnold Schwarzenegger’s budget,

but a bill that’s part of the budget package could bring rough

conditions for the yacht industry in Newport Beach.

The Assembly passed the $105.3-billion state budget Wednesday and

the Senate gave its approval Thursday. Schwarzenegger is expected to

sign it Saturday.

The bill affecting the yacht industry extended the time yacht

buyers have to keep their boats out of state to avoid paying sales

tax. They can’t bring their boats to California for 90 days if

they’re bought somewhere that doesn’t have sales tax under current

law. The new bill extends that time period to one year.

Republicans prevailed in getting an exception for yacht owners to

be able to bring their boats into California during that year for

maintenance only.

That’s some consolation to J.R. Means, president of Bayport Yachts

in Newport Beach.

“We supported a six-month [period],” Means said. “Let’s

compromise. Let’s not whack us because we’re an easy target. Let’s

compromise and get something that’s good for the state and good for

us. And the Democrats in the Assembly didn’t want to work with us.”

Republican Assemblyman John Campbell said he supported the

six-month period and will continue to work to change the bill, even

after it was passed Wednesday night by the Assembly. He doesn’t see

the bill as an issue of taxes but as an issue of jobs, he said.

“However long you make [the extension], that’s how long people

will take to avoid a tax,” Campbell said. “They’re not going to pay a

tax they don’t have to pay when they can go to a jurisdiction

[without sales tax] like Oregon. All you’re going to do is cost jobs

because in Newport Beach and other places, there are people who fix

these boats, repair them, refurbish them, sell them -- all those

things.”

Democrats, however, have said yacht owners should have to share

the burden of the budget crisis like everyone else, said Nick

Velasquez, a spokesman for Democratic Assembly Speaker Fabian Nunez.

“The [Democrats’] concern was millionaires, who own yachts and are

able to get around the law by not paying their fair share of taxes by

parking their yachts in Puerto Vallarta, were not having to suffer as

well as people who were suffering the most from the budget crisis,

like losing their job or being denied from higher education,” Nunez

said.

The one-year extension will only last for two years and will then

revert to the 90-day period. A study will be conducted during this

time to see how effective the one-year extension is, Campbell said.

The overall budget negotiations took place in a mostly

noncombative atmosphere during the 12-hour marathon session in the

Assembly, Campbell said.

“It never got bitter, never got ponderous,” Campbell said. “It

really didn’t. I think people were determined on both sides to pass a

budget.”

For Assemblyman Ken Maddox, this was the first budget he has voted

for in his six years in the Assembly.

“This one did not have massive amounts of wasteful spending, but

it did protect important government functions,” Maddox said.