Skip to comments.California's Casino Budgeting (Higher tax rates will speed the exodus from the state)
Posted on 06/04/2012 4:20:55 AM PDT by SeekAndFind
California's fiscal and governance crisis careens from bad to worse. The latest blow: a 70% increase in the state's projected budget deficit in Gov. Jerry Brown's revised budget, to $16 billion from $9 billion. Meanwhile, S&P warns of a downgrade to the state's bond rating, already the lowest of any state, and the latest CEO survey ranks California's business climate dead last.
Caught in the symbiotic financial embrace of special intereststeacher and other public-employee unions, trial lawyers and environmental extremistsMr. Brown and the state legislature repeatedly nibble around the edges of the budget broken by costly, ineffective programs, financed by an uncompetitive, volatile tax system.
Mr. Brown colorfully but correctly calls the budget, riddled with earmarks and creative accounting, a "pretzel palace of incredible complexity." He and the state legislature are choking on the pretzel. They've lost credibility by offering hopelessly optimistic projections; diverting revenue earmarked for other purposes (such as funds meant to help homeowners from the national bank-mortgage settlement) to the general fund; and gambling on Silicon Valley to produce more revenue from capital gains and stock options. Call it casino budgeting.
The governor describes his budget and November tax-hike ballot initiative as "real increased austerity" while calling on voters to "please increase taxes temporarily." Cutting through the shifting numbers and fanciful assumptions, what is actually proposed is closer to a permanent tax hike and modest temporary budget cuts to fund a permanent spending increase.
Mr. Brown's original bad idea, raising the state's top marginal tax rate of 10.3% to 12.3% for five years, is now even worse: a highest-in-the-nation 13.3% on individuals and small businesses for seven years retroactive to Jan. 1, 2012, and a small increase in the sales tax for next year.
(Excerpt) Read more at online.wsj.com ...
TAKE A NOTE OF SPENDING PROPOSALS:
Total spending nevertheless goes up to $91.4 billion in fiscal year 2013 from $86.5 billion in 2012, a 6% increase. Spending on K-12 education alone rises beyond constitutional requirements to $38.5 billion from $34 billion, a 13% increase.
Yes, I’m not at all surprised to see that Brown wants to RAISE the CA budget 6% into a now-projected $16 billion shortfall (which will be $20 billion ultimately). Brown never saw a socialist spending program he didn’t like. I harbor no hope that my state of CA will embrace fiscal responsibility before it is imposed on it from insolvency, like Greece.
No raises for union workers.
Union workers go on strike.
No payroll for striking workers.
Leave them on strike forever.
Mr. Brown and the state legislature repeatedly nibble around the edges of the budget.
They want to increase spending by 7% next year.
Increase taxes that’s the ticket. /s
They can only kick this can so far down the road. At some point, there will be a reckoning and even Brown and the legislature will have to do some heavy lifting. They can't print their own money, they won't get money from D.C., states can't declare bankruptcy, and if they keep up the spending, borrowing money is going to get a lot more expensive.
What did Brown promise when he was campaigning? This?
His party holds the balance of power in the California legislature by a wide margin, does it not?
The California legislature has ALWAYS been controlled by Democrats for as far back as I can remember.
The Dems are not serious about cutting spending. Brown is crying about the budget while pushing a multi-billion dollar bullet train that no one wants.
And where is that list of the 500+ CA government agencies? Many of them exist solely to provide do-nothing patronage jobs for term-limited-out pols.
When they kill the train and start eliminating useless agencies and boards, then maybe I’ll believe they are serious. Until then, it’s all utter BS.
this spending cannot be sustained. I see houses everywhere for sale and people are getting the hellout of this state. I guess this is the plan on how they plan on turning Cali over to Mexico. One of my dear neighbor friends, are moving, he is an attorney, she is a consultant. both of them have had cancer and survived, now he is having a lot of clients bankrupt and go to collections not paying him his fees and they are taking a HUGE loss on their income and are the heck outta here. Georgia is looking better these days they have purchased a new home twice the size for half the price.