LA Times: California budget's going to be dreadful

[marmar]

California budget's going to be dreadful
Until long-term structural issues are fixed, there is no way legislators can produce an honest spending plan so the state lives within its means.

By George Skelton
Capitol Journal

November 22, 2009 | 8:32 p.m.


The Capitol's budget oracle projects $20.7 billion in new red ink for the next 19 months. Here's my projection: More punting, "kicking the can down the alley" and numbers-rigging.

Hope we're both wrong. Hope there's an economic miracle or political heroism, which would require sacrifice to the demagogues. But, based on history and facts, that's too much to hope for.

Here's how nonpartisan Legislative Analyst Mac Taylor gently put it last week in calculating the latest general fund deficit: "Addressing this large shortfall will require painful choices, on top of the difficult choices the Legislature made earlier this year."

But, he added, "It is unlikely that the Legislature can address all of the state's massive, ongoing budget problems with permanent, ongoing solutions in the next year."

I don't have to be so diplomatic. I'll just say that there's no way these people can produce an honest budget that forces Sacramento "to live within its means," as Gov. Arnold Schwarzenegger persistently preaches, while consistently being one of the first to sin. .........(more)

The complete piece is at: http://www.latimes.com/news/local/la-me-cap23-2009nov23,0,1458845.column

[Dreamer Tatum]

1. CA has one of the highest high tax brackets there is

plus you get to the second-highest one (9.3%) at around $48,000. Until someone explains to me why California is so magical that its marginal tax rates should be even more out of line with the rest of the US, I will wipe my butt with the suggestion of raising taxes.

Oh, and if you make $1MM or more, the MTR is 10.3%. Even if you double that rate, there aren't enough rich people to pay it to make up the deficit, not by a longshot, especially after you consider that a lot of those millionaires will leave to avoid taxes (if you think those are "right wing talking points" consider the recent story that Oprah herself only stays in her Montecito mansion a certain numberof days a year so she can avoid paying CA taxes in favor of IL taxes, which are flat at 3%. If you think other millionaires wouldn't do the same, you're fucking crazy).

If you think the solution is to jettison Prop 13, tell me where people who are paying taxes at 1980 levels are supposed to get the 3-5x increase from? Is it somehow more noble to lose your home over a tax lien than foreclosure?

We spend too much money in CA. Plain and simple, as pure as it gets.

[Craftsman]

2. Bingo

Besides many of us in what it left of the middle class are just plain tapped out.

[yurbud]

3. do you have a source for those tax rates?

[Dreamer Tatum]

4. No, I made them up out of thin air

http://swz.salary.com/salarywizard/layouthtmls/swzl_statetaxrate_CA.html

http://www.taxadmin.org/fta/rate/ind_inc.html

For starters.

[yurbud]

12. thanks! I didn't see the first. Calling for sources isn't calling you a liar-- it means you made

me curious.

[Dreamer Tatum]

15. Well said. Apologies. nt

[Throd]

This state needs an enema

Serious redisricting reform is a critcal start.

[Throd]

6. This state needs an enema

Serious redisricting reform is a critcal start.

[Xithras]

9. The "raise taxes on the rich" meme is easy to say, and fair on the national level, but not here.

Most people who think that the solution to California's tax woes is to simply raise taxes on the rich haven't looked at the real numbers and done the math. California has NEVER been shy about taxing the rich, and the rich already pay a massive share of our tax revenue. Someone pointed out last year that even a 100% confiscatory tax rate on California's top 5% wouldn't have closed last years budget gap.

We have some of the highest income taxes in the country, we have THE highest state sales tax rate in the country, AND we're decidedly middle of the pack when it comes to property taxes (in spite of the Prop 13 rhetoric, California actually ranks 17th out of 50 when it comes to property taxes paid as a portion of median income...Californians typically spend just over 3% of ther income on property taxes).

The problem in California is very simple. California has a per-capita tax base that is well above average, but which is far from the highest in the nation. At the same time we have built a network of educational, social, and environmental support agencies that are the envy of most other states, and many nations. You cannot support the costs of that exceptional social structure using a tax base that is merely "above average".

So Californians have a choice. It's simple, but we've been avoiding it for years. We can either fund our exceptional social network with an exceptional level of taxation to match it, or we can pare the network down to fit within our current tax structure. We can only put the decision off so long, and every year we put it off we end up shaving a bit more and inch closer to that second option.

Exceptional tax rates means increasing taxes on EVERYONE. The rich, the middle classes, and yes, even the poor. Sales taxes need to go up, property taxes need to go up, and income taxes need to go up.

The only other option is to cut.

[Dreamer Tatum]

10. Post of The Year.

Sheer virtuosity.

[taught_me_patience]

11. great response

The middle class is tapped out here in CA. You did leave out the fact the the federal government is sucking us dry by taking $30B more than they give back per year. Getting some of that money back would help too.

[KamaAina]

13. Prop 13 also made it next to impossible to raise *any* tax

by requiring a two-thirds supermajority in both the Assembly and Senate, effectively giving the Party of No absolute veto power over even the slightest tax increase.

And Prop 13 applies to commercial as well as residential real estate, amouunting to a tax brake of billion$$$ for big developers.

[Dreamer Tatum]

14. Keep in mind there are hundreds of thousands of properties

that have changed hands within the past several years, and are therefore taxed at a more realistic rate.

[yurbud]

5. I found a link. There are a couple of states with a higher top rate, but CA's does kick in too low

http://www.taxadmin.org/fta/rate/ind_inc.html

[Xithras]

7. I heard some Rethug on the radio the other day propose privatizing the UC system.

He was actually arguing from a populist position that kinda threw me. He pointed out that California taxpayers currently fund three different college systems. The CC system is there for everybody, the CSU system is there for good students, and the UC system is there for the elites. He was proposing that Californians stop funding "the elites", and that the state should treat the UC's like private universities and ask students to pay their own costs, or just sell them off entirely.

I don't see it happening, but the nuts are starting to plant the seeds.

[Flaneur]

8. Time to tax and regulate marijuana. It wouldn't solve the problem...

...but it would help, to the tune of over a billion dollars a year.

For drug reformers, the silver lining to the California budget crisis is the opening it provides for legalization. There is a bill before the assembly, AB 390, which would do that. And if the legislature doesn't act, it seems pretty clear there will be a legalization initiative on the November 2010 ballot. C'mon, California, lead the way!