Posted on 08/02/2013 1:31:33 PM PDT by ThethoughtsofGreg
An old adage cautions, “if something seems too good to be true, it probably is.” Such is the case with the now famous, “California Comeback.” Faced with a large budget deficit, California passed tax increases on the wealthy, balanced the budget, generated a massive surplus and seemingly solved the state’s fiscal woes.
The problem? In the surplus claim, California only counts revenues that will go into the $96.3 billion budget this fiscal year. This is an increase of $9.3 billion from just two years ago. However, the state’s unfunded pension liability debt is not calculated into the budget. There are several estimates on the actual pension liability that faces California, but if California were to use the accounting standards that private companies must use, its pension debt would be about $1 trillion. This is the little secret that allows California to claim a budget surplus: ignore the state’s debt.
The other main driver of the supposed California surplus is due to a massive increase in personal income tax revenues from 2012. In fact, California’s personal income tax receipts grew by a whopping 50 percent in total collections. This anomaly will most likely never be repeated, especially not every single year for the state’s budgeting purposes.
(Excerpt) Read more at americanlegislator.org ...
This article is confusing us with facts.
The media has been hailing Jerry Brown for leading this California comeback, and balancing the state budget. Would the media exaggerate how well California is doing to make a political statement?????
Those off the books pension costs are going to do in lots of cities and states in the years ahead. Detroit may just be the first major city tobankrupt.upt
Wait until the GOP passes amnesty. California is going to be in heap big trouble. Everyone living their is going to need a bailing bucket.
How can this be? Paul Krugman told us California was coming back. (I believe Stockton, CA declared bankruptcy the following day.)
Oil made California rich 100 years ago.
It can make California rich again.
California is still a major oil producing state. But offshore drilling is banned in California. There are major oil resources which we aren’t allowed to tap into. Since liberals run California, and liberals have decreed that fossil fuels are evil, further development of oil fields in California can’t happen.
liberals run the state and it financially mirrors Detroit and yet Governor Moonbeam has a 54% approval rating? I’d say there is a skunk in the Sacramento woodpile.
Just go back and do a retroactive tax increase on everyone every year for the foreseeable future.
Problem solved.
Taxes are just going to have to be raised.
Triple the tax on tobacco! Don’t touch my Big Macs!
“Just go back and do a retroactive tax increase on everyone every year for the foreseeable future.”
Business demands predictability. This not only eliminated predictability it added an element of craziness business will not tolerate. I’d wager that with this retroactive tax many more companies decided to close or move. The long term impact of this “one time” event will be significantly fewer companies (and employees) to tax.
I’m guessing once reality’s harsh light starts hitting Sacramento, it will get a lot easier to drill-onshore AND off. Mark my words.
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