California
Contrary to conventional wisdom, California’s budget mess isn’t caused by restrictions on tax increases:
For instance, the claim that California voters balk at paying for what they want is easily refuted. There is no evidence that the public wanted the state and public-schools work force to explode by 24 percent — from 719,000 to 895,000 — between 1997 and 2007. There is no evidence that the public wanted never-ending pay and benefit increases for these public employees, in particular an obscene 37 percent raise given to prison guards. There is no evidence of public support for a 1999 law that allows many of these workers to retire in their 50s with pensions of up to 90 percent of their last annual salary.
Meanwhile, the argument that the two-thirds requirement to raise taxes has subverted sound governance implies that this obstacle has kept taxes unrealistically low. Hardly. California has the nation’s highest sales and gasoline taxes, the first- or second-highest income tax (depending on how it’s measured), and the highest business taxes in the West.
The claim that Proposition 13 crippled California’s revenue stream also doesn’t hold up. Because assessments can be raised to current values when property changes hands, property-tax revenue went from $6.4 billion in 1980–81 to $43 billion in 2006–07. That’s a nearly 600 percent increase, which is far higher than the combined rate of population growth and inflation over the same period. In fact, property-tax revenue went up at a slightly higher rate than overall state revenue. Krugman’s assertion that Proposition 13 amounts to a budgetary “straitjacket” is further undercut by the latest Tax Foundation data, which rank California 19th (out of all 50 states) in property taxes as a percentage of total state taxes.
Given this backdrop, it’s simply daffy to blame California’s budget process, its voters, or Proposition 13 for the state’s inability to live within its means. Blame the majority Democrats in the state legislature who have done unions’ bidding for the past decade — spiking public employees’ pay and benefits, expanding government programs to offer ever more taxpayer-subsidized services, using borrowing and other gimmicks when revenue was weak and spending every last dime when it was strong, and constantly adding new burdens to business that hurt tax collections and drove employers (and jobs) elsewhere.
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June 11th, 2009 at 7:07 am
Georgia has the best banks in the nation LOL!!!
http://finance.yahoo.com/banking-budgeting/article/107177/failed-banks-dot-georgias-vista?mod=banking-checking_savings
June 11th, 2009 at 7:19 am
Last night’s update on California disaster.
Get ready to bail us out, America!
June 11th, 2009 at 7:48 am
Weird. Thge places with the worst run governments,California,Michigan,new York,illinois,are controlled by liberals.
June 11th, 2009 at 10:49 am
Excellent analysis, Poli…
As a refugee from California now in Texas (since ’89; but still not long enogh to actually be a Texan), I lived through several Governors fumbling around. Brown and his daddy were both disasters. Dukmejian tried to destroy the CSU system, Reagan actually shut down most of the mental hospitals… But Gray Davis and Arnold Schwartzenegger have managed to finally bring the state to its knees…
May God have mercy on them. And us. Because California is just the first domino…
June 11th, 2009 at 11:11 am
Each vital sign of California seems worst than the last — and the last one said the state was on life supports!
What does it mean when all basic functions will be effected in 50 days if a solution is not found?
What is the democratically controlled legislation doing to avert this diaster, other than crawling under their desks with hands over their heads, chanting “We need higher taxation!”
What a bunch of worthless fools we have governing CA, as well as people, for continually voting them back into office!
June 11th, 2009 at 11:13 am
correction —-> disaster!
June 11th, 2009 at 12:16 pm
There is ZERO reward for doing the budget cuts option. They will get Federal Money instead. Why not increase spending instead of cuts?
Why don’t more States pursue this option? We’ll see how it works out for California first maybe.
June 11th, 2009 at 12:32 pm
Actually here is a state corruption chart that says that you are wrong. Where there is the most corruption is the worst run states:
http://www.usatoday.com/news/nation/2008-12-10-corruptstates_N.htm?se=yahoorefer
June 11th, 2009 at 2:06 pm
Another significant factor is that CA relies heavily on extracting higher rates from higher earners. The tax base is not broad, its very narrow. Now that the economy has nose-dived, there are fewer taxes to be paid by those at the top, and the bottom is largely exempted. So where does the revenue come from? Coupled with a Democrat controlled, never-say-no legislature, and extravagant pay schemes for Public employee unions, CA is a train wreck. And there will be a lot of damage. All in microcosm for where the US is headed now. Anyone see any similarities here?
June 11th, 2009 at 3:05 pm
Decent interview
David Boaz, Executive VP of Cato, Tells MHD Why He’s Optimistic About the Growing Freedom Movement
June 12th, 2009 at 4:17 am
Alex Jones interviews Lew Rockwell.
Two outspoken personalities seem somewhat synergistic when together.
part 1 (skip ahead to about 8 or 9 minutes when LRC comes on in part 1)
part 2
part 3
part 4
June 12th, 2009 at 4:20 am
DHS to expedite rightw-ing extremism report.
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August 4th, 2009 at 10:32 am
emm.. thanks ))
November 23rd, 2009 at 8:35 am
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