California Gov. Newsom Misses Budget by $2 Billion in January

American Thinker ^ | 02/12/2019 | Chriss Street

[SeekAndFind]

California Gov. Gavin Newsom’s missed budget in his first month in office by $1.81 billion on a $2.53 billion crash in personal income tax collections.

Despite the State of California tax collection in December missing budget by -$4.82 billion, newly inaugurated Gov. Newsom proposed a record $144.2-billion spending plan for  the 2019-2020 Budget on January 9 that included spending another $5.2-billion for "Cradle-to-Career" education, $1-billion for earned income tax credit for the poor, and $100 million for refuge immigrants fleeing Central America violence.

California officials at the time, claimed December’s huge revenue miss was due to high-income taxpayers making 2018 payments in late 2017 to avoid the Trump Tax and Jobs Act maximum cap on state and local tax deductions of $10,000. Finance officers reassured this writer that January’s shortfall would be made up next month and the new governor forecast another $6 billion in revenues for the 2019-2020 Fiscal Year that begins on July 1.  

But January tax collections of $16.631 billion fell -$2.602 billion short of the $9.233 budget projection. Estimated quarterly tax payments by higher income fillers that can be somewhat variable came in -$2.079 below budget at $9.389 billion. But employer tax withholding that tends to be a true indicator of the state’s economic trend came in -$563 million below budget, an 8 percent shortfall.

The nonpartisan California Legislative Analysts’ Office has revealed that California has “Significant Variation in Monthly Revenue Collection that can exceed $10 billion due to the state’s reliance on unpredictable capital gains taxes. The LAO still predicts $15 billion capital gains tax collections, despite a 25 percent decline in Silicon Valley stocks. 

[Da Coyote]

We’re awaiting the 90% tax on H-wood, Pelosi, and Google slime.
Crickets..........

[PeterPrinciple]

Nothing changes until the cashflow stops.

[Karliner]

So bad. How many of us could use $100,000,000.00 for help with rent, food, meds and care? Is this state done for good?

[ConservativeWarrior]

This is what happens when taxpayers flee the state, and are replaced by un-taxed, resource-sucking illegal aliens.

[littleharbour]

The California marxists have almost run out of other people’s money to waste. It won’t be long before they have to start building a wall to keep the producers/taxpayers from fleeing the state. The exodus will only accelerate.

[Buckeye McFrog]

The Showdown Moment is coming for our Republic.

California, New York, Illinois, Connecticut, all stand to become insolvent soon.

When they do they will surely go to Washington to ask for a bailout.

Based on the history of 2009 I have no confidence that in the end they won’t get one. It would be an End of Existence moment for the Republican Party as their voters would just become totally disgusted and walk away.

That would be a field clearing moment for AOC and the Young Dem Radicals, and the end of the nation as we’ve known it.

[VTenigma]

Un-possible, gov. moonbeam left him a surplus.

[bert]

Well, for the sake of argument, how about cash flow restriction as noted here.

When cash flow is restricted, at some point you can’t pay all your bills.

Bankruptcy is the inability to meet current obligations as they come due

[Bubba_Leroy]

Nothing changes until the cashflow stops.

The problem is that the cashflow never stops. When tax income goes down they just impose a new tax. As tax income continues to go down they just impose more new taxes.

Then when the taxpayers that elected the democrat/socialists flee the resulting socialist "utopia" they elect the same democrat/socialists in their new states, spreading the plague to other states.

[jetson]

From Moon Beam to Ultra Sheen...California is doomed.

[PeterPrinciple]

Nothing changes until the cashflow stops.

The problem is that the cashflow never stops.

---

Well, you do accept my premise then.

USSR went down because the cash flow stopped, remember that.

Now as to the cash flow stopping here, how that might happen is interesting and worthy of discussion. There are several scenarios.

[CIB-173RDABN]

The problem is that the cashflow never stops. When tax income goes down they just impose a new tax. As tax income continues to go down they just impose more new taxes.

---

There is a tipping point when it comes to taxes.

As some have pointed out before, you get more of what your reward and less of what you punish. Taxes are punishment. Raise taxes and people will change their behavior and purchases to get around them. Some actually will give up and move to another state.

Another way around taxes is the “black market” or the “underground economy”. These appear when the government gets too greedy.

The last thing to happen is a revolt of the people. It may be just voting the bums out or if the existing government makes that impossible (keep in mind California is a one party state and they all but mandated only Democrats win elections) the people may turn violent. Look at Paris for an example.

I have no idea where all this will lead but I can say with certainty that raising taxes is not the solution to California’s financial problems but will simply make them worse.

[PeterPrinciple]

The problem is that the cashflow never stops.

---

Oh but it does, the only question is when and how. History proves this...……………………….

[Buckeye McFrog]

Cash flow is not gonna be stopping for a LOOOOOONG time.
The entire world relies on our Fiat printed money. They all have to be in on the scam, because none of them can afford to be without a chair if the music stops.

We’re gonna be printing and spending and subsidizing and piling up bad paper debt for as far into the future as the eye can see.

[luv2ski]

Aren’t you just a ray of sunshine this morning? but seriously, if DJT is still President when this happens, there will be no bailouts. He won’t stand for it.

[PeterPrinciple]

When cash flow is restricted, at some point you can’t pay all your bills.

---

I am a fan of Adam Smith and the Invisible Hand. I don't think we can escape.

A few thoughts:

1) cash flow stopping is a matter of perspective. A conservative sees it when he looks at the budget and history. A liberal may never see it but will will be forced into changing behavior but it is always someone elses fault.

2) Many things change cashflow. USSR is worth of study, it was several things coming together at the same time.

3) your "for the sake of argument" is good and leads to my corollary:

CASH FLOW AFFECT MANAGMENT (DECISION MAKING) MORE THAN MANAGMENT AFFECTS CASHFLOW.

My easiest example is if I will the lottery tomorrow, I start making stupid decisions. If I lose my job, I start making better decisions.

As a nation, we have been spending the wealth earned by prior and future generations. Easy money and stupid decisions. The cure is tough times, any takers?

[444Flyer]

Add him to the list.

2/4/19

“Cuomo announces income tax revenues have dropped by $2.3B”

http://www.freerepublic.com/focus/f-news/3725309/posts

[COBOL2Java]

[Buckeye McFrog]

if DJT is still President when this happens, there will be no bailouts. He won’t stand for it.

You don't think there's a butt-puckering Chicken Little tale of impending doom that could cause enough Republicans to join the Dems in overriding his veto? I do.

2009 changed everything. If the biggest, most hated banks got a bailout over the strenuous objections of Right AND Left, then EVERYONE gets a bailout. Them is just the facts.