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California's Crisis
I can be pretty critical of Paul Krugman, but this morning he absolutely nails the current California Fiscal Crisis.
The seeds of California's current crisis were planted more than 30 years ago, when voters overwhelmingly passed Proposition 13, a ballot measure that placed the state's budget in a straitjacket. Property tax rates were capped, and homeowners were shielded from increases in their tax assessments even as the value of their homes rose.The result was a tax system that is both inequitable and unstable. It's inequitable because older homeowners often pay far less property tax than their younger neighbors. It's unstable because limits on property taxation have forced California to rely more heavily than other states on income taxes, which fall steeply during recessions.
Even more important, however, Proposition 13 made it extremely hard to raise taxes, even in emergencies: no state tax rate may be increased without a two-thirds majority in both houses of the State Legislature. And this provision has interacted disastrously with state political trends.As sad as I am that it has taken 30 years for this situation to reach crisis proportions, perhaps the next few months will be enough to force us to the Constitutional Convention needed to remedy the damage caused by Prop. 13.
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Hear! Hear!
May 25, 2009 10:13 AM | Reply | Permalink
Did you just say you've been hoping for California to fail? :-O
May 25, 2009 10:38 AM | Reply | Permalink
Bullsh!t.
California's problems are caused solely because the state continued to spend more than it earned in income.
Had California restricted spending to within it's income, this problem wouldn't exist.
Individuals, companies and governments cannot continue to support borrowing as a form of income. The amount needed to pay the principle and interest will always increase to the point of bankruptcy.
The solution is unpopular and deadly to politicians, but it is simple:
Either increase income to meet expenses, or reduce expenses to match income.
May 27, 2009 7:57 AM | Reply | Permalink
Oh? Is that so? So even though home prices have fallen by nearly 50% property taxes would have remained the same? And all those people who are under water or losing their homes would have found this helpful?
What about sales taxes and other fees? Too regressive for you? Then at least say so. The way you phrase it there are only 2 choices; income taxes and property taxes. Dishonest.
Proposition 13 was sold as a measure which allowed older people to stay in their homes at a time when rising prices and insatiable demands of the less fortunate coincided with a decrease in their ability to earn. That argument is still valid. Younger homeowners eventually become older and, if they stay in their homes, benefit just as much. The state eventually gets the benefit of the increased value when a home is sold.
The real issue here is what to do about the less fortunate, the hordes of new immigrants (largely), who demand benefits. Why should the burden fall on homeowners? Why not - finally - face the fact that land is in limited supply and new residents cannot be endlessly accommodated? Why not accept limits to growth and try to deal with them?
May 25, 2009 10:42 AM | Reply | Permalink
your double-speak bigoted
May 25, 2009 1:07 PM | Reply | Permalink
Most other state simply give property tax breaks to their senior citizens. They don't paralyze the system under the guise of helping old people. If you fell for that line you were duped.
May 25, 2009 6:00 PM | Reply | Permalink
Possibly.
But I've seen no proposed reform which includes such a provision and no arguments comparing the protections afforded seniors in California with those in other states.
Further, despite "jonnienohand's" accusation I think there is a strong racial component to all this. To wit, most homeowners are white...while most of those who seek to overturn Prop 13 are not.
So I think it far more likely that it is you who were duped or are dishonest.
May 25, 2009 7:59 PM | Reply | Permalink
Proposition 13 was sold as a cure for lumbago, rhumatism, and the hives. But, it was, in reality a shift of taxes from businesses to individuals. Business property rarely ever changes hands, so Prop 13 froze business property taxes. But, homes sell about every 3-5 years on average, so taxes on homes escalated rapidly. There were many ways to give tax relief to elderly home owners, that would not have caused home property taxes to rapidly go up, but those would not have cut businessmen's taxes, so they were not considered.
Also, the loss of revenue from not just freezing property taxes, but doing so retroactively, caused other taxes, notably sales taxes, to increase considerably. This was another shift of tax burden to middle class individuals, away from businesses.
Californians, in general, haven't shown any ability to be rational when tax cuts are proposed, so prop 13 was followed by other similar propositions to further shift the tax burden to the middle class. Now we are reaping what we sowed.
And, a new state constitution is the only way I can see to get out of the mess we now find ourselves in. But, that will allow Repub business interests to further shed tax burdens and load them on the back of the middle class. So, perhaps there really is no light at the end of this tunnel.
May 26, 2009 1:23 AM | Reply | Permalink
Property taxes would fall even more rapidly than income taxes if they were based on actual market values, which have fallen about 50% in most of California.
The only reason property taxes haven't fallen is due to lag in reassessments. However, there is a growing number of homeowners who are contesting the assessed values, which are unrealistic in the face of the market drop.
Maybe "mark to market" is more popular when applied to securities than to assessed property values?
May 25, 2009 10:45 AM | Reply | Permalink
No, market values have not fallen 50% in CA generally. Some properties have fallen that far, and some locations may have a lot of properties like that, but they are few and were mostly inflated in the first place. In my middle class area 3br houses are still priced crazy high.
Also, some people who bought near the top have been able to easily renegotiate their assessed valuations down. I know one personally. So you're correct on that point. But keep in mind that owners pre-2003 or so are generally not seeing the house market value below the purchase price.
May 25, 2009 4:48 PM | Reply | Permalink
You are right. According to Case-Shiller it is Phoenix that is down 50% and Las Vegas that is down 48% from the peak.
Los Angeles is down only 39%, San Diego down only 41% and San Francisco down only 44% from the peaks occuring April '06, March '06 and Feb '06 respectively.
This is from the seasonally adjusted spreadsheet.
May 25, 2009 6:54 PM | Reply | Permalink
I don't know how they figure that for SF Bay area, but I live here and I'm seeing 3br houses which are priced crazy high still. It could be that the stats are biased by high volume in foreclosures on problem properties while other properties are going more slowly but at higher prices. Or maybe the properties I'm looking at didn't blow up out of proportion so high in the first place so they didn't fall so far. I wasn't looking in 2006.
I know someone who has been looking in a nearby city (Oakland) who has been seeing some places at about 40% off highs but they "ain't pretty" and she still has not found something.
May 25, 2009 7:21 PM | Reply | Permalink
www.zillow.com provides graphs of estimated price for the last few years for at least some prices. I looked up a couple of addresses in East Bay, and they are down significantly from the peak.
May 25, 2009 7:45 PM | Reply | Permalink
That gives -25% in my area of the East Bay since the peak, for average.
May 26, 2009 5:16 AM | Reply | Permalink
zillow = garbage
May 26, 2009 7:32 PM | Reply | Permalink
Prop. 13 has some serious flaws, but it is misleading to attribute all the blame to it, or even to the hyper complex constitution and endless inscrutable special-interest initiatives generally (of which Prop. 13 is only one). The limits to growth that commenter Ordinary mentions above are a related but distinct issue. The key problem is the cyclic nature of California's economy clashing against fixed, often constitutionally mandated, spending commitments. The rainy day fund idea would make sense, but politicians and pundits need to get behind it instead of trying to use the crisis to advance other agendas.
May 25, 2009 10:58 AM | Reply | Permalink
What are California's prospects for economic recovery?
I visited San Diego and Los Angeles in 2007 and it seemed that the business sections of the newspapers were mostly about real estate development and the entertainment industry.
Real estate is unlikely to recover soon. Entertainment will have some challenges as the media goes digital. The federal budget for high-tech military aerospace projects is likely to be constrained. Much of Silicon Valley's business is moving to China. Colorado water shortages are limiting agriculture.
And California has a huge investment in civil engineering that requires a significant operations, maintenance, and replacement budget.
May 25, 2009 11:13 AM | Reply | Permalink
At a symbolic level, you and Krugman are right. Prop 13 represents a failure of political will to pay for basic government services, a form of wishful thinking encouraged by politicians of all stripes and promoted by those who would likely pay the most in taxes, that government can just slim down and there is plenty of money. This wishful thinking has been going on for a century now, or if you think about the "Boston Tea Party," perhaps it has gone on for more than two and a quarter centuries. This is not dreaming, it is delusion.
May 25, 2009 12:06 PM | Reply | Permalink
The entire ballot initiative process is wack. While it sounds feasible in the abstract, in reality, it's usefulness is pretty well limited to faux-populist special interests, such as making gay marriage illegal and installing the Terminator as Governor. Meanwhile, last week, the only initiative that passed was the populist feel-good measure of denying raises to politicians if there is a deficit, saving the state thousands of dollars. Yay!
May 25, 2009 12:13 PM | Reply | Permalink
I'm not a Californian, but I have learned from the media that the first question to ask about any California referendum is "Who is financing the thing?"
As a Texan who detests the low-tax; low-service mentality the wealthy Texas rulers [*] share with the rulers of the state of Mississippi, I used to envy Californians their referendum. No longer. Here in Texas it would just be another political took used by the wealthy to hold the average people down and keep them uneducated and disorganized. That makes the masses unable to recognize what is in their interest, what is against it, and how to influence government to protect their interests.
Is it fair to say that the media is more powerful than the mob in political terms? It used to be the case that the ruling classes had to make concessions to ordinary people to avoid mob actions. No more. Now the "mob" (that is, a true mass movement) is astro-turf and it is any such "mobs" are only reported on as part of the media manipulation that currently appears to actually create such actions. Since Texas as either six or seven media markets, no true "mob" can ever form around a single issue.
How many media markets are there in California? If the broadcasters and publishers are all controlled by advertising-financing, then they are the mouthpieces of the wealthy and they control the mass "movements" that become politically significant. The idea of the Referendum was supposed to be an institutionalization of the power of the real mob on politics, but with the growth of the political power of the media the referendum seems to me to have been taken over by the wealthy as a tool of political oppression to hold the masses down and protect the ruler's wealth and power.
That's hypothesis on my part, of course. I certainly haven't documented proof or attempted to disprove it.
**********************
[*] They control Texas because the governor has few formal powers, leaving the Speaker of the Texas House as the most powerful politician in Texas. The legislature is controlled by the wealthy in part because the pay for Representatives has never been increased from the $7200 a year that existed in 1948. You can't afford to get elected to the legislature unless you are wealthy or are sponsored by someone who is wealthy.
May 25, 2009 3:06 PM | Reply | Permalink
Initiative propositions used to be a good way for citizens to force needed changes. But, that was when you could not legally circulate an initiative petition except in the city/county where you were registered to vote, and you could not pay someone to circulate such petitions. They were true government by the masses.
Today, initiative petitions are a thriving business. You can get anything you wish on the ballot if you have the money to buy the signatures. Of course only groups backed by the wealthy have the money, so initiative petitions are invariably written to benefit the wealthy at the expense of the less wealthy. In short, it is always the best idea to vote no on all initiative ballot propositions.
May 26, 2009 1:32 AM | Reply | Permalink
"The real issue here is what to do about the less fortunate, the hordes of new immigrants (largely), who demand benefits. Why should the burden fall on homeowners?"
I think it's really the other way around. We have homeowners who insist on receiving public services, such as streets, sewers and so on, which are priced in today's dollars, but who only want to pay what those services cost 30 years ago (or whenever they bought their home). The difference, of course, is made up by the immigrants, who actually receive very few services, certainly nothing to what the older residents receive, and certainly less than they're paying in taxes. Why should the burden on providing public services that all citizens enjoy fall entirely on the newer residents? Why can't the longer-term residents pay their fair share?
"Why not - finally - face the fact that land is in limited supply and new residents cannot be endlessly accommodated?"
There may come a time when California may run out of land for new settlement, but that's a very long time away. The entire north half of the state is very sparsely populated. There's tons of room out here. And even southern California still has plenty of room to grow.
In any case, at the moment, the largest burden on California taxpayers isn't providing for California services at all, but coming up with the hundreds of billions it takes to bail out the dysfunctional companies in states like NY and Michigan. One in eight Americans live in Calif, and one in eight federal tax dollars come from here, and that means that one-eighth of the bailout costs come from here. The amount we've shipped back east just in the last year would more than balance the state budget for a number of years. Easily. So while California's finances may be in a bad state, the real underlying problem is the infinitely worse condition of the federal government, which makes California practically solvent. It's incredibly arrogant of people like Krugman from NY, whose banks are draining the country of trillions, to tell us to get our act together. It's NY that's the problem, not California.
May 25, 2009 12:19 PM | Reply | Permalink
The only thing wrong with your arguments is everything - you don't know what you're talking about.
Look closely at the state budget. Are most of the expenditures going to provide infrastructure or education, health care, etc? Suggest that taxes be spent only to benefit those who pay and guess who'll squeal?
This was Julian Simon's (and later Thomas Sowell's) response to Paul Ehrlich. It's a huge pile of crap, and very dangerous crap. It's the reason nothing is done about environmental threats. You really believe that as long as the state isn't converted entirely into farms, suburbias, and cities there's lots of room to grow?
Pathetic.
May 25, 2009 12:45 PM | Reply | Permalink
The difference, of course, is made up by the immigrants, who actually receive very few services, certainly nothing to what the older residents receive, and certainly less than they're paying in taxes.
Not if you include first-generation Americans who are still dependents of immigrants in the "immigrant" category.
People often talk about how much mroe law-abiding immigrants are, with the implication that immigration could not possibly raie the crime rate. What is ignored is that the children of immigrants (i.e. first-generation Americans) have a higher crime rate than those whose families have been here for longer.
May 25, 2009 7:57 PM | Reply | Permalink
California for decades has paid more to the
Federal government than she has received. I believe as of 2004 CA got .77 for every dollar sent to Washington.
The main problem is that 2/3 majority is required to pass any budget, this means that every year a crisis occurs as the most fringe elements in the legislature must be placated. It is a mess. The super majority provision is the biggest flaw in prop. 13.
May 25, 2009 12:35 PM | Reply | Permalink
I don't know if Taplin, like Josh Marshall, is periodically kidnapped by Mareen Dowd, but it sure looks like it reading this latest insight.
Even if you accept the obvious stupidity of his point on Prop 13, the issue, as he sees it, is that California's REAL problem is that it's unable to raise taxes even further into stratosphere.
A simple technical issue, in other words, nothing to do with anything else, like out of control spending, current tax rates, the proposals that were just voted against by the people of California, etc.
May 25, 2009 1:12 PM | Reply | Permalink
ah yes, dingbat republican alternate universe explanation. sure, it isn't that the tax burden has been shifted from businesses to individuals, it's just that taxes are somehow so much higher than they were at some fictional non-specific point in history.
May 26, 2009 8:03 PM | Reply | Permalink
In the discussion of Prop 13 it is seldom mentioned that the voters were conned into taking the burden of paying for state services onto their backs. Property tax valuations change on change of ownership; homes change hands more often than the Transamerica Tower. For property, the minor injustice of 13 is unequal taxes on neighboring homes. The major structural effect is to transfer the tax burden from owners of shopping malls onto owners of homes, from corporations onto individuals.
May 25, 2009 1:25 PM | Reply | Permalink
Oh, Boo frickin Hoo. The left is despondent because taxpayers won't allow them carte blanche? Too bad. Get used to it.
May 25, 2009 2:42 PM | Reply | Permalink
Idiot!!
May 26, 2009 7:50 PM | Reply | Permalink
I've heard this argument. If true it's certainly worth pursuing. But is it? What's to stop corporations and mall owners from passing the added cost onto consumers? And, if they can't, from leaving the state to places where R.O.I. is higher?
May 25, 2009 3:04 PM | Reply | Permalink
All corporations pass all their tax burdens on to their customers. Where do you think they get any money to pay their taxes, if not from their customers.
You make a good case for NOT taxing corporations and place the tax burdens directly on people - who are paying them anyway.
.
May 28, 2009 9:27 AM | Reply | Permalink
It's inequitable because older homeowners often pay far less property tax than their younger neighbors.
Taxing older people out of their homes is pretty inequitable too. Jerry Brown and the California legislature could have made Prop 13 a harder sell by addressing that issue separately.
May 25, 2009 4:17 PM | Reply | Permalink
The main problem you ignore is that if this is a true crisis you'd think a 2/3 vote wouldn't be so hard to achieve for emergency measures. The lack thereof points to either a failure of will or a strong difference of values (when it isn't mere political maneuvering or outright ignorance).
I see a lot of smoke, but why isn't there a fire under the Legislature in Sacto?
"limits on property taxation have forced California to rely more heavily than other states on income taxes"
Wait a minute. Prop 13 limited assessed valuation increases. But each sale produces a new assessed valuation so overall property taxes have been going up. It's true that not all states charge significant income tax, but the real problem is that CA government spending has continued to grow at almost explosive rates for years and years. And the budget shortfall is a steeper than the proportionate drop in taxable incomes.
May 25, 2009 5:03 PM | Reply | Permalink
Another problem is the "free lunch" syndrome. People will gather en masse to protest reduction in services, then vote down the tax increases to pay for them.
May 25, 2009 5:22 PM | Reply | Permalink
Maybe you're right. I don't have any examples handy.
But "free lunch" is a problem in another sense, that a lot of nominally progressive notions treat lunch as if it were free or would automatically be paid for somehow. My fiscal conservative side is suspicious of such notions.
May 25, 2009 6:11 PM | Reply | Permalink
As is mine.
If government set priorities and budgeted from a zero base, then both the objectives and the cost of achieving them would be apparent.
That government doesn't operate that way is half the problem. One quarter rests with the electorate, who have been brainwashed into believing that the primary responsibility of government is to cut taxes, and that you can have whatever -- wars, farm subsidies, homeland security -- without paying for it.
The final quarter is government sawing away a chunk of the tax base here, a chunk there, instead of overhauling the entire tax system.
Sorry about the arbitrary percentages. I don't know how you'd slice it, but it seems to me that those are the components.
May 25, 2009 8:05 PM | Reply | Permalink
I got the gist. When cutting up a "known unknown" or an "unknown unknown" intelligently but heuristically it is fair enough to cut it at an apparent half-way line as a starting place.
May 26, 2009 3:47 PM | Reply | Permalink
California never has met a problem it couldn't spend its way out of - that mindset is the Golden State's biggest problem. If Proposition 13 was such a cultural deathknell, why hasn't the state crapped out in the 32 years since it became law? There were vast inequities written into it, to be sure, but it was approved by the state's voters and never has been rescinded. It was spurred by a specific cyclical event - booming property values caused mostly by speculative investment. The much-maligned "old people" saw taxes on their homes shoot through the roof in the 1970s, mostly because property around them was ballooning in the speculation bubble. Legislators loved it - more taxes in the short-term. In the long-term - who cares? Sacramento doesn't give a shit about "long term". Never has.
Blaming Prop. 13 as the biggest reason for the state's current (as per usual) dire straits is like blaming designers of the Presidential limo for the Kennedy assassination.
And, no, goddammit, we can't spend our way out of this fix!
May 25, 2009 7:04 PM | Reply | Permalink
According to the statistics at www.taxfoundation.org, Californians paid state and local taxes totaling 10.5% of their per capita income of $47,706.
Nationally, we paid state and local taxes totaling 9.6% of our per capita income of $44,254.
New Jerseyans paid 11.8% on $56,116 (so long Gov Corzine).
New Yorkers paid 11.7% on $55,032 and Nutmeg Staters paid 11.1% on $63,160.
Percentages in Maryland and Hawaii also exceed California, which is in sixth place.
Actually, when you consider all state and local taxes together, the burden doesn't vary all that much from state to state. Most are within 1% of the 9.6% national average, with those below 8.6% being those with lots of oil, gambling, drugs, or a lack of indoor plumbing.
May 25, 2009 7:25 PM | Reply | Permalink
Amazing. California tax revenue is higher than all but a few other states. It would seem that whatever California's problems are they cannot be attributed to paltry revenues.
May 26, 2009 4:10 PM | Reply | Permalink
Given the categories on which the most is spent, the money is undoubtedly going fo employee costs.
So there are three approaches:
- reduce state and local employee benefits,
- reduce state and local employee salaries,
- reduce the number of state and local employees, preferably from the adminstrative, managerial, bureaucratic, political appointees ranks.
May 26, 2009 5:07 PM | Reply | Permalink
I wonder how much "fat" there is at upper levels.
May 27, 2009 12:01 AM | Reply | Permalink
It appears that the proposed budget ( http://www.ebudget.ca.gov/BudgetSummary/BSS/BSS.html ) for 2009-2010 is almost all health and human services, education, and corrections. Amounts for other activities are very small by comparison. It should be pretty easy to take 10-20% out of these kinds of consumption expenditures.
May 25, 2009 11:08 PM | Reply | Permalink
Well, I live in California and have fought this issue for almost 30 years. Yes, Prop. 13 causes these problems. In addition, Prop. 13 reduced the property tax on corporate property. It was not just little old people in their homes, it was also Bank of America and others. The level of taxes paid by corporations has dropped in California in the last 25 years- forcing middle class tax payers to pay more for their schools, roads, etc.
There have been efforts to change this, called split-roll, but they have not passed.
So, the crisis is caused in part by reduction of corporate tax responsibility, not private home ownership.
Another alternative is to use the initiative process to change the 2/3 rule. That will be coming.
May 25, 2009 11:23 PM | Reply | Permalink
That initiative will be voted down by about 65 to 35%. Read the posts above yours. The majority of people in California are very willing to cut services for children, poor, handicapped, or anyone else, just to avoid paying another $10 a year in taxes.
May 26, 2009 1:39 AM | Reply | Permalink
.
Well . . .
I hope the majority of those same people here in California who are very willing to cut services for children, poor, handicapped, or anyone else, just to avoid paying another $10 a year in taxes are prepared to have those same folks camping on their front lawns and shitting on the curbs and gutters in front of their homes.
By the way ... what's Taplin's address maybe a few unfortunates can take up squatting on his door step.
~OGD~
May 26, 2009 4:33 AM | Reply | Permalink
Why would "a few unfortunates" take up squatting on Jon Taplin's door step? He is most certainly on "our" side.
In the next few weeks, if not days, California will be cutting services in order to balance our budget. Perhaps seeing the consequences of doing that will move enough people's hearts to gain the votes needed to make the changes needed. But, don't bet on it. We have gated communities here just to keep sights like that away from us.
May 26, 2009 11:56 AM | Reply | Permalink
.
Uhhhh . . .
Gee, that's just wonderful. Maybe we can stack up a few bodies on each street corner to really let others in the state know how bad it is. Now there's an idea, eh?
And . . . "our" side????
You've directed your statement to a Californian. Southern California. From a 5th generation agricultural based family.
As far as I am concerned Sacramento might as well be located next to the Face on Mars.
And uh . . . Please clue me into what you know about the organization that professor Taplin provided a link to that is spearheading this California Convention concept. . .
~OGD~
May 27, 2009 2:40 AM | Reply | Permalink
Here is the webpage for a group advocating a new constitutional convention for California: http://www.repaircalifornia.org/index.php. You can research it if you wish. I did, and found nothing that stands out to indicate that this is another right wing effort. If I am wrong, please correct me.
May 27, 2009 6:43 PM | Reply | Permalink
.
Uh . . . Gee Hoppy
Where the heck did I say anything about that organization being some "right-wing effort"? Don't go jumping before you look and see how far down it is off the cliff.
If you follow the link provided at the About us it will send you to the organization that is the primary initiating source of organizing this "California Constitutional Convention." There (pdf board of directors pgs. 10 & 11), the majority of members of that organization are corporate entities and concerned business leaders, bankers, investors, etc. etc. The organization has been around 60 years and has accomplished many positive outcomes but has specifically lobbied for the San Fransisco/Bay Area region.
And although they call this "California Constitutional Convention." "...a people's movement" it's not some grass roots ground swell movement that some unsuspecting individuals may think it is at first glance.
If the intention of this organization is to truly unite and to bring together the entire 36+ million Californians spread across the 163,696 sq mi of the state, I'm all for... But I have serious doubts that that is the intention.
Time will tell . . .
~OGD~
May 28, 2009 3:15 PM | Reply | Permalink
.
And one more little thingy . . .
Maybe Professor Taplin can come back in here and give us some of his knowledge about the "Repair California Organization" and the actual people and funding behind it.
He provided the link, he must have some info that we don't have.
Or ... was that just something he read or heard about and pulled it out of his hat?
Do ya' hear me Jon?
Come on down...
~OGD~
May 28, 2009 3:43 PM | Reply | Permalink
Prop 13 is a problem, and it led to others, but it's not the only problem. Prop 13 made it very unprofitable for local governments to provide affordable housing, as only the most expensive housing would pay for itself in taxes. In addition, commercial and retail developments, which don't cost as much in local services, became much more profitable for local governments. And retail brought in sales tax revenue, a main source of income for both state and local governments. So local governments concentrated on the development of expensive housing, office parks and shopping malls. And with the recession...
But California also became the most neoliberal of neoliberal states, where the majority of the population simply doesn't make enough money to pay for the necessities. Housing costs, in particular, outstripped the ability of the majority to pay along about 30 years ago. So a poverty line adjusted for actual costs in California would put about half of the population, and 2/3 of the state's children, below it. So the need for public services has increased, without the income necessary to pay for it, as the 2/3 requirement to increase taxes prevents the state from raising money by taxing those who have money.
May 26, 2009 12:25 PM | Reply | Permalink
You've got it;
You're asking homeowners to pay taxes for things which will not benefit them. Naturally they're not keen to do so...and all the rationalizations in the world won't convince them. Why? Because you're not talking about people like Gates and Buffett for whom a few extra dollars in taxes mean nothing, but middle class people who are working like hell just to maintain their home ownership.
May 26, 2009 3:25 PM | Reply | Permalink
These same owners don't want to pay taxes that don't benefit them. Well what about firemen, policemen. The money goes to pay for the services. As it is now, our services have been cut severely. These people want everything and don't want to pay them. I am sure the voters of California would agree to pay a few more dollars on their property taxes to clean up this mess. It's that thuglican mentality. I want it all but I don't want to pay for it. Let someone else pay for it.
May 26, 2009 8:10 PM | Reply | Permalink
You're wrong. People are glad to pay for what benefits them.
You're also wrong about Proposition 13 and the causes of California's demise. California was rich because the climate was great and land was cheap. So the rate of development was breathtaking. But about 1975 we crossed a line and land was no longer cheap. From that point on it was all downhill.
May 27, 2009 12:07 AM | Reply | Permalink
Unfortunately these middle class Californians are receiving huge benefits from low wage workers who require government subsidy. The people who serve them (clean their houses and offices, prepare and serve their food, check them out at the store, etc. are the people who get state subsidies. We'd expect even more screaming if the middle class were forced to pay the full cost of these services.
May 28, 2009 11:48 AM | Reply | Permalink
I have lived in California since 1965, When I arrived in California (prior to Prop 13) this state was rich. The school system was incredible, the campuses were beautiful. I can atttest that Prop 13 was another scheme by republicans to not fund the public school system with their taxes.
I have friend who has a house valued at $600,000 (an old house bought in 1973 for $53,000 and the taxes per year are $1,200 a year.
That is insane.
May 26, 2009 7:47 PM | Reply | Permalink
I would love to know where the money from the state lottery is going. It was supposed to help our schools. I don't believe that is happening but where does the money go. It seems to be a mystery
May 26, 2009 8:06 PM | Reply | Permalink
.
The Lottery? Ha Ha Ha . . .
The ridiculously small amount that eventually trickles down to the entire State of California public schools most likely doesn't even cover the cost of all the toilet paper flushed down the school commodes, let alone much else.
Just another feel good "sales pitch" to help establish the lottery system in the first place. And even at that the school idea was added as an afterthought.
~OGD~
May 27, 2009 2:54 AM | Reply | Permalink
When I read all of these articles about California's collapse I begin to wonder if they're talking about the same California I've lived in for over 50 years. The California I live in is still extremely prosperous, maybe more prosperous than I've ever seen it. Housing prices are still very high. I'm self-employed and have plenty of work. Most restaurants are still pretty crowded, concerts sell out, I don't know anyone personally who is out of a job, and on and on. The only real problem I see is the people in the rest of the country draining California of tens, if not hundreds, of billions of dollars a year to bail out their dysfunctional governments and companies. (We're one-eighth of the national population and are paying one-eighth of the costs of the bailouts, which is a ton of money, more than enough to balance our budget for years.) I read about companies in other states (GM, Chrysler, Citicorp, etc.) going bankrupt. I haven't heard about any in California doing so. The movie studios are having a record year, Apple and Google are doing well, and so on.
California's great. Great people, incredibly multicultural, progressive, and very wealthy. The climate is awesome. I think people are just jealous.
May 27, 2009 1:52 PM | Reply | Permalink
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Dang ... Mike . . .
Now you let the rabbit out of the bag...
The 3 million when the times are good visitors that just recently up and left and headed east in that long exodus line of U-hauls when their paper pushing home loan company jobs folded will be replaced with double that if you keep it up.
As I say, "Everybody's gone surfing ... Surfing U.S.A."
~OGD~
May 28, 2009 3:31 PM | Reply | Permalink