California faces budget surplus

Discussion in 'Budget & Taxes' started by raytri, May 29, 2013.

  1. unrealist42

    unrealist42 New Member

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    The democrats had a majority for decades but the republicans had a stranglehold on finances because prop 13 required a two thirds vote for state spending and taxes. Now that the republicans have lost their minority stranglehold California has moved to eliminate the stupid crime laws, balance its budget and begon to repay the massive debt accumulated by the fiscal stupidity of the republicans.

    Stupidity. it costs money to pay for things, especially in a fast growing economy with a rapidly increasing population. New infrastructure and education are critical but, in order to get anything done the majority democrats were held hostage by the minority republicans, who demanded more and more absurd crime measures, which siphoned state revenues away from infrastructure and education and into police and prisons.

    It is not about just taxing and spending, it is about paying for what is necessary. Republicans think that if they just cut taxes and reduce spending everything will be better and everyone will be better off. It does not work like that. Economies need to grow and governments need to increase their spending in the things that they do if that growth is to be accommodated. Limiting property tax increases prevents local governments from increasing their spending to match their communities economic growth. There are cities in California whose population has doubled but revenues have increased by less than 50%. The result is not enough money for anything so everything falls apart. The schools are funded less and less every year despite a growing number of students. Police and fire are reduced. Road and bridge maintenance is abandoned except for emergency repairs. Business and people move away and tax revenues decline even more.

    The republicans get what they want, a race to the bottom that makes Texas begin to look better than California.
    If they keep it up Mexico will soon be better than either.
     
  2. Not Amused

    Not Amused New Member

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    It costs ~$200 to fly round trip between LA And San Franscisco, and takes about an hour, 2 if you add all the TSA crap (which is better in SFO because they chose not to use TSA).

    What exactly is the market need for a train?

    So it is "only" $68 billion, spent over 15 years. How many years will it take to pay back the bond, and what is the total cost after interest?

    What is the ROI?
     
  3. Battle3

    Battle3 Well-Known Member

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    It looks like the D's have had majority control of the California House & Senate since at least 1992, with the exception of 1996 when the R's had the House. Governor's have basically alternated D and R since 1953.

    Your attempt to implement a modified "blame Bush" claim is ridiculous. California is the product of the Dumbocrats. There is no way to get around that fact.
     
  4. raytri

    raytri Well-Known Member

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    Blame Proposition 13.
    http://en.wikipedia.org/wiki/California_Proposition_13_(1978)

    #1, it required a 2/3 majority in both chambers in order to pass any "urgent" bill, the annual budget, or any bill containing a tax increase.

    A voter referendum in 2010 finally removed the first two requirements, but a 2/3 majority is still required to pass any bill containing a tax increase.
    http://ballotpedia.org/California_P...ote_for_Legislature_to_Pass_the_Budget_(2010)

    So despite having a majority for decades, Democrats have been unable to do much because minority Republicans could block any bill involving new spending. Thus government revenue has not kept up with population growth and other things that drive an increased demand for services.

    #2, Proposition 13 also capped property tax levels, fixing assessed values at 1975 levels and allowing only minor (1-2%) increases to account for inflation.

    This made it very difficult to raise property taxes, essentially stripping local governments of their prime source of revenue. They became ever more dependent on state grants. For instance, the state has taken over most of the funding of public schools in California, because local school districts -- which also rely on property taxes -- couldn't raise enough revenue to operate.

    So while Democrats have had majorities in the legislature, their hands have been severely tied by laws that are a conservative's wet dream -- and which have demonstrated how such laws simply do not work in the real world.
     
  5. raytri

    raytri Well-Known Member

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    It has now been FOUR DAYS, and none of the posters who baselessly slandered me, Democrats, and California have come back to admit they were wrong.
     
  6. Lil Mike

    Lil Mike Well-Known Member

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    So in spite of having the second highest tax burden in the country, California is still not taxing enough! Well as the Republicans and middle class slowly vanish from that state, I'm sure future propositions will give you the taxing authority you want. Don't let New York keep you at number two forever! Don't give up the dream!
     
  7. cjm2003ca

    cjm2003ca Active Member

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    not true..tax assessments is not capped at 1975 levels....when the property is sold it is assessed at the new price...very few homes are owned by the same owner from 1975 til now...so if you buy my house right now you will be taxed 1.25% of the sales price..which right now is valued at 725,000...so your taxes yearly is $9062.50... sound cheap to you?
     
  8. Not Amused

    Not Amused New Member

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    If the Democrats have been unable to raise tax rates, how does California have one of the highest tax rates in the country?

    Was Prop 13 passed by the Republicans, or by voters? Why would the voters do that if the state was so well run? The voter have heard the Democrats discuss the taxes they would add, which is why they refused to overturn the 2/3's vote in 2010.

    Property tax is to fund schools (actually, 40% of all state income has to go to the schools), that was taken by the state to even out the funding between poor and rich school districts.

    When the recession hit, the state reduced / eliminated the payments they made to local governments.
     
  9. raytri

    raytri Well-Known Member

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    California already had one of the highest tax rates in the country when Prop 13 passed.

    In the intervening years, cities got around it by implementing fees and charges for nearly everything. The state government, meanwhile, managed its finances by crisis: tons of one-time gimmicks, underfunding things until the last minute and then passing a minimal change that barely addressed the problem. The 2/3 requirement lets a small minority hold the budget and tax policy hostage.

    Voters, of course. Hey, what voter wouldn't want a law that magically limited their taxes, when that law is divorced from any discussion of what a particular tax is for?

    Prop 13 was a reaction to the inflation and massive hikes in property values that occurred in the late 1970s. To an extent that reaction was understandable, but it was a simplistic and permanent fix to a temporary problem. Tax policy should follow the lines of "To do A, we need B amount of money. Do you approve it?" It makes no sense to set an arbitrary limit on spending without any reference to what that spending is for.

    That was only part of it. The rest was because Prop 13 sliced up the income base of local governments and school districts.

    So did a lot of states. So now imagine you're a city in California. Prop 13 slashed your revenue base. The state stepped in to help cover the gap. Now the state has slashed those payments. Your budget is in a hole, and you have no ability to raise tax rates. You're simply screwed.
     
  10. Battle3

    Battle3 Well-Known Member

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    Aren't those prop's voter initiatives? Isnt that what "democracy" is all about - the people having some control of their destiny and lives?

    Those propositions came about because the California govt was out of control and the people tried to rein it in. The people failed. The democrats simply worked around the will of the people and destroyed what was once the social and technological leader of the nation.

    What you are claiming is the typical "progressive" ideology that the elite ruling class knows best, and the people should just shut up and obey.
     
  11. raytri

    raytri Well-Known Member

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    Sure. That doesn't make them good legislation. Why not pass a bill that says "government spending will double every year, while government taxation will halve?" Wouldn't that be GREAT?

    California isn't destroyed. Note the title of this thread, which talks about recent budget surpluses.

    Not what I claimed at all. I just don't think mob rule always yields thoughtful results.
     
  12. Not Amused

    Not Amused New Member

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    The state could have reduced spending to match incomes. They have done that tons of times. They close all the visible services, expecting the voter to "come to their senses", only to find out the voter wasn't as effected as they hoped.

    Wonder how much hue and cry they'll get from the voter when they slow the spending could care less about?

    California has passed many tax hikes for the children, for law enforcement, for "insert what the voter will fall for this time" only to spend the money on other things. The voter isn't that stupid.

    Prop 13 was a reaction tax and spend with no benefit for the voter.
     
  13. Moi621

    Moi621 Well-Known Member Past Donor

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    The Family Home where I live was purchased by my family in1964.

    Without Prop 13, I would be taxed out of my home.

    I have met with people who have been taxed out of their homes because their States had no Prop 13.
    That strikes me as horrible. Some rich folks buy the home next door and your property tax goes up.
    Ridiculous system

    :woot: Prop 13 :clapping:
    It should be the Law of the Land



    Moi :oldman:

    r > g




    No :flagcanada:
     
  14. reallybigjohnson

    reallybigjohnson Banned

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    http://www.taxpolicycenter.org/taxfacts/displayafact.cfm?Docid=521

    Since liberals are to lazy or incompetent to bother to look at the actual breakdown of spending I will post it. California spends more per capita than most other states in the union. If you look at the breakdown of expenditures what you see is that CA spends an inordinate amount on welfare and less than most other states on highways which explains why their road systems are collapsing. CA government doesn't have a shortage of money what they have a shortage of is spending discipline. Another thing to look at is the catch all category or "All Other" where California way outspends ever other state......only Connecticut comes close.

    California is in the shape it is in because they spend their money on crappy ideas like the high speed rail boondoggle which even people that voted for it are saying it was stupid. Thank God our governor was smart enough to kick rail out of our state. Oh and by the way they still have over 400 billion in actual debt to pay off including liablilities to pensions that are not included in the budget when they talk about surpluses or deficits.

    http://www.usdebtclock.org/state-debt-clocks/state-of-california-debt-clock.html
     
  15. raytri

    raytri Well-Known Member

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    Which is a somewhat meaningless number. Look at the states that spend more -- or nearly as much -- per capita and try to find the common thread:

    Alaska: 17,698
    D.C.: 16,805
    Wyoming: 13,339
    New York: 12,123
    Vermont: 9,855
    Delaware: 9,466
    California: 9,460
    North Dakota: 9,396
    Massachusetts: 9,375
    Louisiana: 9,361
    New Mexico: 9,336
    Connecticut: 9,318
    New Jersey: 9,248

    See much common ground? I don't.

    California's $1,795 on welfare puts it at just #12 in that category. It trails Alaska, New Mexico, Minnesota, Pennsylvania, New York, D.C., Delaware, Vermont, Rhode Island, Massachusetts and Maine.

    California spends relatively little per capita on roads because it has a relatively high population density (it's our 11th-most densely populated state). By contrast, a state like Wyoming (big area, low population) has to spend a ridiculous amount per capita on roads. Alaska is the king in that category, spending a ridiculous $2,341 per person on roads. It has nothing to do with proper vs. improper priorities.

    You're reading the chart wrong. California is outspent in that category by Alaska, Wyoming, New York and D.C., and nearly matched by Hawaii, Colorado, Louisiana, Delaware, Massachusetts and Connecticut.
     
  16. Battle3

    Battle3 Well-Known Member

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    Citizen initiatives are not always good, and the process is frequently abused by political groups and businesses who think hoodwinking people is easier than going (legally or "crony") through the politicians.

    Politicians are not any better, possibly worse.

    The fundamental problem is a citizenry which seems to have traded their freedom (and the risk of personal failure that entails) for the govt dole.


    You mean the "recent" budget surplus of $4.4 Billion? That was before the audit found $32 Billion in accounting "mistakes". The entire 2014 CA budget is $96 Billion - the mistakes are over 1/3rd of the budget.

    The surplus is now a debt.

    http://www.americanthinker.com/blog/2014/06/california_hit_with_316_billion_audit_misstatement.html

    And I agree, but rule by a small elite class doesnt yield good results either. The only way to go is a small, limited government which has to move slowly - just as the Constitution outlined.
     
  17. raytri

    raytri Well-Known Member

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    Reread my post on that subject from a week ago. That audit doesn't mean what that blogger -- and the conservative posters here -- think it means. The surplus is real, and unaffected.
     
  18. reallybigjohnson

    reallybigjohnson Banned

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    You clearly don't know anything about road construction. Building roads in urban areas is far more expensive than in rural areas. The only expensive part would be roads directly located in the mountains themselves but that is a small minority of the roads in rural states. Roads with little traffic in less populated states will require far less upkeep costs than in a heavily populated state like CA. This is why CAs road system is falling into tatters because they have lots of people using the roads and yet they are not keeping up with the maintenance. This very situation is occurring in Milwaukee where the city cut corners on their road budget and now there are potholes everywhere and they can barely keep up with the repairs and it is busting their budget since they waited so long. CA has abandoned their infrastructure in favor of moronic ideas like light rail. If you want to see how a world run by liberals looks just look at CA and Illinois.

    http://www.artba.org/about/transportation-faqs/#20

    According to 2012 data from the Federal Highway Administration—the latest available— Connecticut has the worst roads in the country, with 52.2 percent of all federal-aid highway miles in poor or mediocre condition. Not far behind: Rhode Island with 39.1 percent and Hawaii with 38.9 percent. Other states with more than 30 percent of federal-aid road miles in poor or mediocre condition are New Jersey (38.2 percent), Michigan (34.8 percent), California (34.5 percent), West Virginia (33.0 percent), Kansas (32.0 percent), Oklahoma (31.8 percent) and Washington (30.8 percent).

    Hawaii and California have the worst Interstate Highways, with 29.7 percent and 8.5 percent of miles respectively in poor or mediocre condition. The states with Interstate Highways in the best condition in 2012 were Georgia, Illinois and North Dakota, each reporting no miles in poor or mediocre condition. (Source: 2012 Highway Statistics, Tables HM-63 and HM-64)

    California spends far to much on welfare and not enough on infrastructure. They have billions of dollars in in unfunded liabilities that are not included in the budget and WILL eventually have to be paid back no matter what. This is exactly what happened to cities in CA because they couldn't keep pushing the debt down the road as far as a state can. Since CA can't print its own money, unlike the Feds, eventually the state will have to deal with those pension liabilities which once again are not included when estimated deficits or surpluses.
     
  19. raytri

    raytri Well-Known Member

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    Then please explain why the per capita spending numbers correlate with population density. Alaska, Wyoming, the Dakotas -- all the low-density states have astronomical per-capita road spending. Your explanation appears to be at odds with reality.

    This is better, in that it's comparing the share of highways within each state that are in poor condition. By this measure, it does appear that California has a higher share of bad roads than most states.

    But note two things:

    1. Is this because California is neglectful of its highways, or is it because of other factors -- much higher usage of its roads, say, or tough environmental conditions?

    2. Note that the list of states with a high percentage of roads in bad shape include Kansas and Oklahoma. You clearly can't blame liberalism for the bad roads in those states. Which means trying to blame liberalism for the bad roads in California looks suspect. It's more reasonable to think that a high percentage of bad roads is caused by some problem other than prevailing political ideology.

    That is your opinion; it's hardly conclusive.

    Every state in the union faces the same situation. Why are you calling out California in particular?
     
  20. reallybigjohnson

    reallybigjohnson Banned

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    Most states aren't in the red nearly as far as CA or Illinois.

    You are only looking at per capita and not taking into account population density. Wyoming and the Dakotas have very very very few people in them. In fact there are dozens of cities in CA that have higher populations than Wyoming or the Dakotas. Why don't you compare TX to CA since they have large populations and similar demographics. unless you are deliberately trying to avoid that comparison. Texas spends more on their roads so they aren't nearly as bad as CAs but overall they spend less per capita which is why their taxes are lower. TX has better roads and better schools and a thriving economy and people moving into the state while CA has worse schools and roads and people are moving out and yet they are spending far more per capita than TX.

    TX manages to do a much better job and spend less money doing it.
     
  21. raytri

    raytri Well-Known Member

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    Wow, you're amazing.

    YOU brought up the per-capita analysis. We've been using the dataset YOU linked to in the first place.

    It was ME who first brought up population density, by noting that low-density states like Wyoming and the Dakotas will naturally have higher per-capita road spending than high-density states like California.

    In your last post, you rejected that explanation.

    In this post, you now embrace that explanation, and pretend you came up with it.

    Goodbye.
     
  22. reallybigjohnson

    reallybigjohnson Banned

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    You are the one that immediately cherry picked Wyoming and North and South Dakota, three of the least densely populate states in the nation. You had all sorts of states to choose from and you deliberately picked three of the least populated. Instead of picking a state with a large population and similar demographics you immediately went to states that are on the complete opposite side of the spectrum. Cleary I have made you look like a fool when I compared to TX which has a large population and similar demographics. Only someone who is specifically trying to obfuscate and lie about statistics would do such a stupid and asinine thing.

    Like most things in life road costs operate on a normal distribution...duh. I you have even the most basic of education which you clearly don't then you would understand this. On one side is a very small population which means that by definition per capita costs will be higher because there are so few taxpayers to get money from (this is the side you cherry picked) and on the other side are states with large poplation that have roads that are used heavily and will require more maintenance. I am sorry that your education is so woefully lacking and your attempt to candy coat CAs finanical situation completely failed but it isn't my problem that you are a partisan that ignores reality.
     
  23. raytri

    raytri Well-Known Member

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    Um, duh. Yeah. Because I was pointing out that high per-capita road spending was associated with low population density. I was giving you a *global* explanation for variations in road spending.

    Your initial post pointed to California's low per-capita road spending and said "Look. California is underfunding its highways."

    I pointed out that per-capita funding for roads correlates to population density, with low-density states spending more per-capita on roads.

    You said "No! Low-density states have less traffic, so their road repair costs are lower."

    I said, "On a per-capita basis, that's clearly not true."

    You then switched 180 degrees, and explained how low-density states have higher per-capita road spending because they're low-density. WHICH WAS MY ORIGINAL POINT.

    Your initial analysis was crap: per capita spending on various items isn't, by itself, an indication of under- or overfunding. low-density states require way more road-spending per capita; high-density states generally require more police, as more people living closer together provide greater opportunities for conflict. They also require more welfare and public-health spending, because people who need such services tend to cluster near the sources of such services -- and such services are more available in high-density areas.

    About the only things on that list that I would expect to be density independent is education.

    You then trot out Texas. Fine, let's talk about Texas.

    Texas is only the 26th most densely populated state, while California is the 11th. Therefore, we would expect Texas to spend more per-capita on roads, as they have to cover more distance per capita.

    Surprise! Texas spends slightly more on roads.

    Per above, we would also expect Texas to spend less on police, welfare and public health. Surprise! They do.

    How about education? Here Texas clearly does a better job: it spends more per capita on both elementary and higher education than California. Good for Texas.

    But the other differences are most obviously explained by differences in population density.

    Are some states better managed than others? Of course. But you don't get at that answer by a shallow drive-by "analysis" of per-capita spending. You have to take into account geography, demographics, etc. For instance, Minnesota has higher road-spending per capita in part because we live in a climate where it gets very hot in the summer and very cold in the winter -- thus causing the pavement to heave and crack. Roads simply don't last as long in Minnesota as they do in Texas -- or most of California, for that matter. This isn't because Minnesota is run by liberals -- it's because of where we are on the globe.

    You funny. For your "normal distribution", you use per-capita spending when talking about low-density states, and absolute spending when talking about high-density states. You might want to try comparing apples to apples instead. Why are roads in high-density states more heavily used? Because more people are using them -- and thus there are more people to pay the cost of upkeep. So even though the absolute cost of upkeep is high, the per-capita cost is lower.

    That's why the per-capita spending on roads correlates nicely to population density, and doesn't correlate AT ALL to the political ideology of the state government.
     
  24. reallybigjohnson

    reallybigjohnson Banned

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    No you picked three of the least populated states instead of more comparible states. I then chose TX which is a much more valid comparison and proved you were completely wrong. Tell me why you chose Wyoming, and the Dakotas specifically? The ONLY reason you would have picked them is because they are polar opposites of CA. Any statistician or scientist would laugh you out of the room for such a stupid comparison.

    Where did I say anything about political ideology being tied to roads? I simply said that in CA case that particular state has underfunded their roads and instead spent money on boondoggles like $200+ billion for that stupid train. Washington is liberal and they have very nice roads or at least they did when I spent the summers there as a kid. What is a valid comparison is liberal states having larger spending problems than moderate or Republican run states. Wisconsin now has a budget surplus ( a real one now the fake one CA had) and they are working on their pension issues that were the result of years of democratic rule.
     
  25. raytri

    raytri Well-Known Member

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    :facepalm:
     

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