Posted on 12/08/2010 8:14:27 PM PST by SmithL
SACRAMENTO -- Gov.-elect Jerry Brown and some of the state's leading politicians laid out a panorama of grim realities as California seeks a way out of its unrelenting economic crisis, emphasizing that gimmicks can no longer be used.
Brown, 25 days away from assuming the governorship, took the extraordinary step of calling hundreds of lawmakers and local officials together to confront what will likely be the defining issue of his term.
One-time solutions such as federal stimulus funds and temporary tax hikes are not options to fill in gaps left by the state's plummeting revenues, Brown said during the two-hour summit.
And, he said, lawmakers must step out of their ideological comfort zones to deliver results to Californians.
"The crisis, I think, will open the way to solutions because our backs are against the wall," he said. "I believe this breakdown will, of necessity, pave the way to a breakthrough because we can't keep going on the way we have. It's getting worse. Beneath the differences there is a zone of potential common agreement. That's where I'll focus in the coming months."
Joining Brown on stage at the venerated Memorial Auditorium blocks away from the Capitol were state Treasurer Bill Lockyer, state Controller John Chiang, Brown's newly named finance director, Ana Matosantos, legislative analyst Mac Taylor, Senate leader Darrell Steinberg, D-Sacramento, Assembly Speaker John Perez, D-Los Angeles, and Assembly Republican leader Connie Conway, R-Visalia.
The meeting took place as lawmakers are ostensibly in a special session after current Gov. Arnold Schwarzenegger declared a fiscal emergency to tackle a $6.1 billion budget deficit for the current fiscal year. Though they will begin hearings on Schwarzenegger's proposal today, Democrats have said it's all but certain that they will not take action until Brown takes office Jan. 3.
(Excerpt) Read more at contracostatimes.com ...
This discrepancy will cause chaos in the legislative process. The rats can pass any budget desired but they will not know if the tax increases will be enacted. Republicans are perilously close to oblivion because the rats have 2/3 control in one branch and almost 2/3 in the other branch.
One of the poorest communities in the state, Mendota in the Central Valley of CA, was made poorer by Boxer and her ilk voting for a 6 inch fish over farmers. I hope they can tax the heck out of the delta smelt. Cause when you have 45% unemployment in ONE community, I can guarantee you, there is nothing to squeeze out of them. It is absurdities such as this which is killing this state. Tax the damn trees and owls and delta smelt cause they own this state.
Mike Genest is a republican, but it was a refreshing statement nonetheless..
First thing CA needs to do is to turn their legislature from full-time to part-time. It’s obvious these idiots have too much time on their hands.
Thirty days a year in-session should be enough for this bunch.
Actually in terms of percentage of GDP, the California budget deficit is not that large. CA is about one eight of the US GDP, so a $25 billion deficit would be only the equivalent of a $200 billion federal deficit. But the big mistakes liberals have made in Sacramento and Washington is that they never figured out how difficult it is for high-tax states like CA to raise taxes by even a few hundred dollars per taxpayer and they forgot that states can’t run continuous deficits and have the Fed print money to pay for it all. It’s very difficult for a high-tax state like CA to raise taxes substantially because, for example, if they raise income taxes by 10% the result would be that something like 4% of residents with the highest incomes will leave the state. The end result of the intended 10% revenue increase would be only something like 3% because of migration of high income residents out of the state. That happened the last time they raised income taxes significantly in CA.
This is the big state fiscal trap that liberals and union bosses have never understood. It’s easier for Greece or Ireland to raise revenue than for California to raise revenue because it’s much more difficult for Greeks or the Irish to leave those countries. To leave California for good, all you have to do is find I-10 on the map, fill up your gas tank and drive east until you cross the Colorado river into Arizona. (...and no cops will be waiting there to check your immigration status). From there you can continue on I-10 into several low-tax states such as Texas and Florida. It’s going to be extremely difficult to raise revenue substantially in CA, but the liberal politicos in Sacramento will also go into childish fits of rage over the large budget cuts that will inevitably have to be made, either proactively or when the state simply runs out of cash. This will be quite a show to watch as the big fight over money erupts in the once golden state. (Note: I worked in CA for 14 years and left permanently early in the previous decade because of high taxes, high housing prices, and “cultural decay” in CA).
Their choice is to have Jerry Brown as the "Titanic" Captain.
We salute you Captain Moonbeam McGoon.
May the sinking of California be a peaceful event for the rest of America.
Power points from today’s briefing:
http://www.jerrybrown.org/sites/default/files/GovElectBudgetBrief_1.pdf
http://www.jerrybrown.org/sites/default/files/TreasurerBudgetBrief.pdf
http://www.jerrybrown.org/sites/default/files/ControllerBudgetBrief.pdf
I think you mean this article:
"...Despite Prop. 13 that capped property taxes at 1%, property taxes expanded from $6.36 billion from 1980-1981 to $43.16 billion in 2006-2007, an increase of 579%. For point of reference the CPI index increased just 133%, from 88 in 1980-1981 to 202.4 in 2006-2007."
As "Enterprise" said above, Prop. 13 caps the yearly increase at 2%...most of the gain was from the housing bubble, and property tax revenue has dropped back down by 30-40% (re-assesments).
Too low on some folks and not high enough on others.
Changing the income tax from the multiple-brackets as high as 10% down to a flat 4% on all compensation (including the value of benefits like employer provided health insurance) with no deductions or credits would raise more money and be more attractive to the productive people instead of the deadbeats. Changing the sales tax from 8% down to 4% while applying to all retail goods and services would increase that revenue stream while decreasing the advantage online sales have over brick and mortar; it would also give a huge boost to county and city finances unless they cut their rates correspondingly.
Then, by turning retired state and local public employees into Soylent Green pig chow, we can reduce much of the pension shortfalls. Decertify public employee unions like Mitch Daniels did in Indiana, and save all future pension benefit growth. Give public schoolchildren vouchers for $5K each and we can cut school spending in half, saving $25B/yr.
True, and it pays off twice — you no longer spend the money, and you stop attracting people who were coming for the gravy train.
Discouraging gravy-train followers can also be done on the tax side. Extend the sales tax to all goods and services instead of basically making it free for those that spend all their money on groceries, rent, and services. Eliminate the deductions and exemptions from the income tax so the rates are true tax rates and then lower them to a single 4% rate. These steps would increase revenue while making CA less of a draw for low achievers.
More importantly, they want to use the threat of cutting off essential or popular services to get tax hikes that will pay for the BS programs nobody would vote for if given that direct choice.
I’m wondering how many high-income Californians would be easily able to leave the state this time, if taxes were raised. I am thinking about the industries in which they are concentrated — tech, entertainment, what am I missing? My husband is in tech, and while it would be relatively easy for us to move between LA and Silicon Valley, there are lots of problems posed by working remotely out-of-state.
What do you think?
“It’s going to be extremely difficult to raise revenue substantially in CA”
Only if you try to increase the taxes on the high end.
Lowering tax rates on the high end including eliminating the corporate income tax entirely, while increasing on the low end by eliminating deductions and exemptions, would raise revenue significantly. It would also make CA “more expensive” for poor people to live, which would encourage them to move away and thereby reduce the spending in those programs.
Hopefully, we can get a few million people to do this...I'm kinda selfish, and I'd like to see 10 million leave California and head to your state or wherever..
We simply have too many people...
Let the greedy corrupt developers that hire tens of millions of low wage illegal aliens, pave over Arizona, Texas Colorado, Kansas etc......
Good luck!
“Hopefully, we can get a few million people to do this”
Yes, and we could hope it would be the lowlifes that leave if the tax rates at the top were lowered to retain the productive people but the deductions and exemptions that favor the lowlifes were eliminated to take away their “free ride”.
You lost me there. I cannot advocate raising taxes for anybody, even if those same animals vote for Democrat politicians to confiscate more from me. ...On the other hand, screw them. Yeah, raise the "gimme gimme" crowd's taxes. Why not?
Heh, you sound like you are destined to be “the last white farmer in Zimbabwe”.
Good luck with that!
FRegards,
LH
I like broader tax bases where everybody pays the tax at a *lower* rate. In the case of CA sales tax, the underachievers benefit much more than the high achievers when groceries and rents are excluded from the sales tax, because they spend a much larger portion of their income on those items. Taxation should be indiscriminate, not targeting specific items or persons. Justice is supposed to be blind, right ? Otherwise it is just too easy for politicians to carve out groups of voters that they “protect” from the tax and thereby buy their votes. Taxes that are not applied evenly breed corruption.
I found it sadly comical that the Bush tax rate extensions were characterized as the “GOP holding the middle class hostage to benefit millionaires”. I see it more as the “Dems wanting to perform human sacrifices to the tax monster to protect the low achievers”.
It’s funny - - you use the phrase “low achievers” while I prefer the good old, “Losers, bums, deadbeats, and parasites”. Hey, whatever! Same thing, I guess. The phrase, “Democrat party base” covers it just fine.
FRegards,
LH
Good luck in PA friend...You’ll need it.
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