California crashing

Bus fares in San Francisco went up to $2. My uncle who works with the state budget in Sac. has had to pull several all-nighters over the last couple of months. My father who is a teacher was offered early retirement (didn't take it). A few much-loved state parks near me MAY be closed. When I go to get my license renewed I will need to make sure to check what the DMV's new, shorter work hours are.

Practically speaking, it hasn't affected me that much (although I do ride the bus!) On a macro level I think it has done what everyone predicted it would do: make Californians think long and hard about what our (collective) priorities are and whether or not our politicians are working to further those (collective) causes. Hopefully this crisis will have an ameliorative affect on the deeply ingrained, rank partisan politics in our state legislature.

I think California would prop up its credit rating better if it paid its debts with Confederate money rather than IOUs. California is the perfect example of "you can't have it all and balance the budget without tax increases while hosting millions of illegal aliens and giving unions and loon left Democrats absolutely everything they want and imposing more government regulation than any other state."

I feel bad for Californians. Education, especially, has taken it on the chin in ways hard for the rest of us to comprehend.

I saw an article today which suggested that those state parks which take federal money (that would be, nearly all of them) will not close, but rather be seized by the feds if California attempts to close them. I didn't read this too carefully, because I think the threat to close the state parks was just the Governator throwing a hissy-fit, and trying to make everyone else as miserable as he is. The amount of money "saved" would be trivial.

It's just spiteful. "You won't rubber-stamp my budget stuff, I'll close your parks, SO THERE!"

1. Teachers are being laid off in droves. Three friends have been laid off in the last three months.

2. State Serivices are being cut across the board. DMV waits are runnning 3+ hours in parts of Los Angeles.

3. Bus services are being cut.

4. Afterschool programs are being cut.

5. Charter School funding is being cut.

Just for starters.

Until California revamps it's Property Tax Laws, the state is screwed. I live in a $1.4 million dollar house (due to appreciation and AFTER the current downturn), but my property taxes are almost the same as when I purchased the home 22 years ago. I pay less than $1300 per year, yes PER YEAR, in Property Taxes. It's a joke. I can and should pay more, but the system doesn't require it.

My cousin, who lives in NYC in a condo, pays more than $5000 per year in property taxes for a condo much smaller, and in a much worse neighborhood than my house in Manhattan Beach.

I agree with JerryS. Prop 13 simply must be reformed. Also, as I may have mentioned on this blog before, I was shocked at how low vehicle registration costs here in a state that has so many cars…in AZ (not exactly a "loon left" state) I was paying twice as much to register my car.

We have an utterly profligate and dysfunctional government. Both parties are to blame. The Democrats are utterly doctrinaire, prisoners of the unions and the "helping professions" and the racial patronage blocs. The Republicans want to put everyone who steps on a crack in prison and won't raise taxes even when warranted.

When Earl Warren (moderabe Republican) and Pat Brown (moderate democrat) ran this state and the defense industries were strong, the freeway system was built (perhaps they should have kept the trains, but the freeways were well done), the University became one of the bast in the world, the state was reasonably friendly to business.

After the Free Speech Movement, and the crazy Jerry Brown (who may come back, God Help Us) and his crazy Supreme Court, and massive immigration from the whole world, and the decline of aerospace, the exodus of Hollywood to Vancouver and Toronto, anti-crime moral panics leading to a maassive expansion of the prison system, the rise of public employee unionism and racial patronage groups, the state has been descending into Hell in the proverbial handbasket. Middle-class people, white and otherwise have been fleeing. Business will go anywhere to get away from high costs, high taxes, and insane regulations.

If the weather weren't nice, and earthquakes on hold for the moment, the place would empty out.

No different, really, from New York and New Jersey. A preview of what could happen to the country if the free-spending, pro-racial-preference, pro-immigration, sold-out-to-bankers, crackpot environmentalists get their way. Meanwhile, the GOP is clueless and still dominated by Neocon interventionism.

Pray for the Republic. God could save what men are doing their best to destroy.

So endeth the rant.

JerryS, have you ever considered sending in more property tax dollars? I'm perfectly serious. If you feel you need to pay more, there would be nothing stopping you.
PS--I have a property (in WA state) that has been assessed at a slightly lower value than yours and my property taxes are 10 times what you pay per year. I'm feeling ripped off!

You might want to try Bing-ing "California state budget". I just ran it, and it came up with the official summary sheets for your province's '09-'10 budget. It made some references to "Proposition 98 expenditures" that I had to look up, but otherwise the information was there. It would take me a little bit to puzzle out exactly what programs are included in each spending category, but otherwise it's not dissimilar to the way NY province sets out its budget.

Either way, BOTH provincial governments spend WAY too sodding much.

I hope this helps.

Your servant,

Lord Karth

Sounds like Arnold turned into an economic girlie-man.

He could probably solve the budget crisis by making a few action films.

Amy, that union thing sure works out well for the taxpayers who have to pay for it, eh? (not)

For those who asked, www.ebudget.ca.gov is fairly informative if you like numbers.

Middle-class Californian (yes, there are a few of us). The state's problems have not affected my life, firsthand, in any notable way.

Even the IOUs, the banks will probably treat as cash. It's a testament to the powers of modern civilization that a government so badly run can continue to function passably.

That said, my city and county have laid off a number of sheriff's deputies and police officers, and a floor of the jail has been closed. Coincidence or not, there's been an unusual rash of burglaries in my neighborhood.

"Wonder if the anti-SSM crowd realizes how much gay weddings could have helped California's economy."

What an idiotic argument. There aren't enough gays in the world to provide marriage fees enough to even make a dent in Califorinia's economic mess.

I agree with the poster who says that California needs constitutional reform. Government by referendum and amendment (prop 8 for example) is bad government. There is a reason that our founding fathers feared direct democracy and favored a representative republic. California is the poster child for many of the fears and problems described in the Federalist papers.

As Kane said, the one good thing about this crisis is that it may force major changes. A group of huge foundations is launching an effort to rationalize the budgeting process, which could include a combination of flat tax (designed to take the volatility out of state income) and business tax (because business has quietly benefited enormously from Prop 13, more so than many homeowners).

We'll see about that. But what changes has it brought yours truly in CA? To date...nothing but a slight increase in my daughter's tuition at UC Berkeley...which is still, despite all the brouhaha, a tremendous bargain as a university.

I'm a financial advisor and work with businesses and individuals. There is almost a sense of hopelessness amongst baby-boomers that thought about retiring at 60 or 62. Now they assume they will need to work until 75 or longer. Businesses are hunkered down and many are just barely holding on. The system in CA is broken. It takes too long to build or expand a business, they are regulated to death and the layers of bureaucracy would test the patience of Job. Capital improvements take forever to get approved, the bidding process has been criminally hi-jacked by the unions, and consequently infrastructure is crumbling. We pay more and get less than just about anybody in the country. We must 1) Do away with gerrymandering. 2)Reign in public employee unions 3) Restructure the bidding process for public works projects. 4) Return fiscal control of such projects to the local governments. 5) Get rid of term limits, or extend the terms substantially. This is just a start . . .

From Warren Buffett:

The Wall Street Journal's Aug. 15 article about me, based on an interview that I gave one of your reporters about my association with Arnold Schwarzenegger's campaign, was seriously misleading in a way that caused far-reaching reverberations. For reasons that I will explain, I could not write to you about this matter until now.

The article, featured on the Journal's front page, carried a headline and opened with paragraphs devoted entirely to California taxes. That's fair enough: taxes were certain to be a major issue in the campaign.

In talking with your reporter, Joe Hallinan, I began by asking him to record the interview. He replied that his taping equipment was not working. Therefore, in verifying with him that what I'm about to recount is correct, you will have to rely on his notes. I do not expect you to find discrepancies, given that he asked me several times to repeat the key figures that I presented.

What I said in respect to property taxes was very specific. I gave him an example of three houses, two in Laguna Beach and one in Omaha.

* The first Laguna Beach house is a property that I bought in the early 1970s. It has a current market value of about $4 million and, because of the limitations embodied in Proposition 13, carried taxes of only $2,264 in 2003 vs. $2,241 in 2002.
* The second house, located just in back of the first, is one that I purchased in the mid-1990s. It has a market value of about $2 million and, simply because I bought it later than the first, carried taxes of $12,002 in 2003 vs. $11,877 in 2002.

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Here's the link: http://www.wealthandwant.com/docs/Buffett_Prop13.html
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As long as property taxes are based upon when you purchased your house, as opposed to market value, California is screwed.

The property tax situation in California is complex.

Because of our boom-and-bust real estate cycles, prior to Proposition 13 (which limits property taxes to whatever you were committed to paying upon purchase, plus I think a 1% increase a year) many people found their property taxes quadrupling because of price increases in the market. Unfortunately a quadrupling of the (theoretical) price of my home does not, in itself, confer on me the ability to pay such a huge increase, since the chance that my salary has also magically quadrupled is quite small. If market values behaved rationally this might not present as much of a problem as it does, but here, they don't.

Prop 13 has introduced, however, further complexities into the market. People who buy homes and stay in them for a long time pay taxes at a rate far below that paid by people who bought more recently. That in itself might be OK, but it does form a substantial disincentive to sell one's home and buy another. Thus the market has become somewhat "sticky," with results which would be better evaluated by an economist than by me. Because property tax revenues are limited, California has a high, progressive income tax, a very good thing in itself in my opinion (since it taxes the very people who do have the money to pay), but an income tax is also very sensitive to economic downturns such as the present one.

(People say that income and sales taxes are "dependent on economic prosperity" which I think translates out to, tax people who do have money to pay the tax, which ought to be a good thing, I'd think, as opposed to taxing people who do NOT have the money to pay.)

But it's pointless to whine about all of this. Prop 13 is quite popular among California homeowners, just as rent control is popular among renters; neither one is likely to be revoked, even if both are outstandingly bad ideas.

James P. and Maeb

The illegal alien question is a tricky one. I live in, not "pass through," an area in CA on the border of the US/Mexico where the top industry is agriculture. The following comments are based on my observations and also those of Mexican-born and Mexican-American friends and co-workers, and are in response to Maeb's questions about aliens financially burdening education and healthcare resources in this type of area.

I see how much the industry depends on alien labor - legal or illegal. I also see how education and healthcare are burdened, if not abused. Numerous families have their kids cross the border and attend K-12 local schools (one family will buy a house on the US side, just to have a US address for school purposes), overburdening them with students who don't speak English and, for the most part, never bother to learn it well because of the local culture. At least a couple of my Mexican-American co-workers are unhappy with the situation, including the abuses regarding finanical aid in higher education.

A friend of mine who works in emergency room admissions at a local hospital sees illegals get free medical care all of the time, thanks to California State, in addition to seeing the legals who go to the emergency room (paid for by CA State) at a higher cost for things as trivial as a headache and such (seriously), when these same people could have gone to a doctor's visit for much lower cost. But they're not paying the bill, so they abuse the system. She sees this on a regular basis, with some of the offenders showing up in the emergency room at least a couple times per month. Keep in mind this information comes from my friend, a Mexican-born woman (now naturalized), a single (divorced) mom who is barely making ends meet on $11/hour and who is too proud to take public aid. She is disgusted at how our system is abused.

I'm certainly aware that abuses, here or elsewhere, are not limited to any one particular ethnic group. I'd support comprehensive crackdowns on abuses across all racial/ethnic/gender lines. (Easy to say, of course; I'd love to say I have a plan for this, but I don't.) However, as this post is California-specific and Maeb's comment focused on agricultural areas, I'll say it's the Hispanic population within my local demographics that appears to be at the forefront of burdening state and local resources in terms of education and healthcare. Question is, do the decreased labor costs outweigh the education and healthcare costs? Doubt it.

Erica,

"Wonder if the anti-SSM crowd realizes how much gay weddings could have helped California's economy."

I'm with Denton. First, state fees and money spent on "Industrial Wedding Complex" sized festivities for gay weddings wouldn't save CA's budget problems. Second, I'll bet our gay brothers and sisters are feeling the employment and economic crunch just like the rest of us; so, even if they could get married, do you think they'd be crazy enough to spend Industrial Wedding Complex sized dollars, pumping them back into the economy? I'm guessing many of them would spend less. I've seen articles on how couples are spending less on weddings in these times. Makes sense. I can't see how gay couples would be very different.