The California Budget

[can't sit still]

Well, California got a debt downgrade,,, not a big surprise.
There is far too much pork in wages and retirement money;
http://www.cato.org/pubs/tbb/tbb-59.pdf

"California's SPENDING AND STATE EMPLOYMENT LITERALLY DOUBLED over the past 10 years which is absolutely ridiculous given the fact that the population of the State is about the same as it was 10 years ago. There are so many overpaid people in State government that it is beyond ludicrous.

The University of California is paying its many Chancellors over $400,000 per year plus expenses for basically just glad handing. The Office of the President of the University of California has a staff in excess of 1,000 people.

The State of California is running itself like a A COUNTRY CLUB DIVISION OF GS for its top people, and both the the salaries and pensions for State and many municipal works are higher than many top executives of large companies elsewhere in the world.

It is not unusual for firefighters to be paid $200,000 to $300,000 per year with those benefits extended in life-long pensions upon early retirement. All of these salaries and pensions need to be radically cut and the State needs to start comprehending the concept of PUBLIC SERVANTS as related to its employees."

The public service unions say that they won't accept any cuts. California is the poster child for runaway legacy costs. I doubt that DC will bail out Sacramento. True, DC has gone crazy on salary and hiring but, that doesn't meant that they approve the same for the states.
DC has loaned Ca about $ 1.5 billion to support unemployment. I think that Ca should NOT count on any more. A chunk of California's woes are from paying for federally mandated programs that are NOT federally funded.
California now has a lower credit rating than Greece.

[can't sit still]

Well, we now have Chicago politics in DC. Look at what it's done for Illinois;
http://www.chicagobusiness.com/cgi-bin/ ... 0&seenIt=1
Illinois is bankrupt. If you read this paper, it gives a good blow-by-blow of the progress/process.
One of the main culprits was the overly generous pensions given to GOV workers. California wasn't quite so egregious but, it still hired WAY too many people. Democracy is mob rule. The mob always votes for more bacon than the economy can provide.
Ca is a DEM state and a very big % of the US economy. It doesn't look like Ca will get bailed out. I believe that Illinois has even less chance.

[can't sit still]

Well, the mayor says that bankruptcy for L.A. is not an option. Mish seems to think that he means that it is a foregone conclusion;
http://globaleconomicanalysis.blogspot. ... cy-is.html

Breaking Bad: California vs. the Other States
by Richard Rider, Chairman, San Diego Tax Fighters
Version 1.53 Revised 22 January, 2010

Here’s a depressing comparison of California taxes and economic climate with the rest of the states. The news is breaking bad, and getting worse (I keep updating this article):

California has the 2nd worst state income tax in the nation. 9.55% tax bracket at $47,055. 10.55% at $1,000,000
http://www.taxfoundation.org/files/bp59_es.pdf

By far the highest state sales tax rate in the nation. 8.25%. 7% is next highest (does not include local sales taxes)
http://www.taxfoundation.org/files/bp59.pdf Table #15

California corporate income tax rate is the highest in the West (our economic competitors). 8.84%
http://www.taxfoundation.org/files/bp59.pdf Table #8

2010 Business Tax Climate ranks 48th in the nation.
www.taxfoundation.org/files/bp59_es.pdf

Fourth highest capital gains tax 9.55%
http://www.thereibrain.com/realestate-b ... state/109/

Highest gasoline tax (averaging 65.8 cents/gallon) in the nation (October, 2009). When gas hits $3.00/gallon, we are numero uno – because unlike many states, we charge sales tax on gasoline purchases (built into the price).
www.api.org/statistics/fueltaxes/

Fifth highest unemployment rate in the nation. (December, 2009) 12.4%. National rate 10.0%.
www.bls.gov/news.release/laus.nr0.htm

One of the highest state vehicle license car taxes. 1.15% per year on value of vehicle, up from 0.65% in 2008.
http://tinyurl.com/lrvmtd

California’s 2009 “Tax Freedom Dayâ€

[can't sit still]

Well, there's no doubt that California taxes the crap out of Californians. But,,,,, where does all the money go? The biggest sinkhole of them all; welfare. Ca has 12% of the population and [currently] 35% of the welfare cases.
http://weblog.signonsandiego.com/weblog ... 34662.html
California is killing it's tax base while handing out money right and left to voters. Democracy in action. As Margaret Thatcher once observed; "socialism is fine until you run out of people to steal from".

[can't sit still]

How much do you think a bus driver should be paid? How about "$108,295 average annual compensation for drivers"
http://www.reuters.com/article/idUSTRE62255A20100303
" Mayor Gavin Newsom plans to send layoff notices to more than 15,000 city employees this week. "
SF needs to save hundreds of $ millions.
L.A. needs to cut a couple of $ billion.
That's a few billion less being spent into the economy.
Deja vu all over again; The Ca budget gap was posted at $ 16 B just a few weeks ago. Now, it's stated at $ 20B.
A couple of years ago, it was stated at $ 3B, then after 2 weeks, it jumped to $7B and then 10,, then 12,,, finally arriving at $26B if I remember correctly.
Ca is already talking about IOUs again. I won't be surprised if some higher numbers sneak out again.

[can't sit still]

This is a pretty good article talking about how California is bubble-dependent. Supposedly, the next bubble is scheduled for next year. It won't happen.
http://www.oftwominds.com/blogmar10/Cal ... 03-10.html

[can't sit still]

Well, California is in the news again. Seems that they're missing a half trillion dollars for pensions. $ 1/2 trillion is a substantial chunk of change. Recent court decisions claim that public sector employees don't have the same pension protection that private sector employees have, Someone on the court must have a crystal ball.
http://www.kcra.com/money/23061893/detail.html

Not to be outdone by the state, Los Angeles city is grabbing headlines too. They plan to run out of money in 4 weeks. They want to use reserves. Nothing like waiting til the last minute. With a little more stupidity, they could commit a federal offense in the process. The very-famous mayor who is a camera hound seems to be out of his depth. I'm not sure where his depth is ,, exactly. He's a former "community organizer".

My Guatemalan friends told me NEVER to vote for a Mexican mayor. They said that he would run the city into the ground. They aren't bashful about their perceptions. SO, the circus may move from Sacramento to L.A for a while.
http://globaleconomicanalysis.blogspot. ... n-out.html

[can't sit still]

Here's a very good article about the public service unions using their money and power to get salary and pension packages that are far too generous. The pensions are busting the budget. Their answer is to raise taxes. This can be counted on to chase away even more business. So, as the tax rate is raised, the tax base is diminished.
This is a good illustration of why democracy never works.
http://city-journal.org/2010/20_2_calif ... ns.html#ad

[Rabbi Dali Rick]

Wow, good article about Villaraigosa, and his gang. I did like him until I found out about the crap he's been pulling behind the scene's. And now with all the email leaks, too find out that none of the city employees being laid off are Hispanic really burns my taco. This is similar to the construction, food and any other industries currently being assaulted by this nefarious takeover agenda.




the rebbi

[ygmir]

yeah, "they" all seem like good politicians, until we find out who the "really" are...........

and, here the hispanics are really pushing to take over........IMHO........but, don't call 'em on it, because, then, you're labeled as racist.......

[Rabbi Dali Rick]

well, at least they are only working jobs that nobody else wants, like the Mayor of LA....




the rebbi

[ygmir]

good one...........

[can't sit still]

I've never been worried about being labeled racist or anti-semitic or whatever. I have no trouble making distinctions based on race,, or creed. There are valid examples everywhere. Look at the military accomplishments of the Scots compared to the French. Why do you think that there are no black wrestlers and almost no white boxers? Look at swimmers.
The Basques are decedents of the Neanderthal. They have sport competitions called "Rural Games" Nobody but Basques can compete. Nobody has close to the strength needed.
Some differences are genetic and some are learned. The Latinos tend to be more family oriented and more clannish.
It's completely natural for them to try to get their relatives employment wherever they work. Whenever we hire a whitey in here, they give em hell.
It's perfectly natural to want to associate with people who feel the most familiar to you. Why call it racism? We don't call all the people in Chinatown racists.
The hispanics may be trying to take over but, they do it by grabbing any job niche available and immediately starting a family.
When was the last time that a white teenager came to your house and offered to mow the lawn for a few bucks? I don't see any whiteys out picking grapes in the Central Valley in 110 degree heat.
Too many whites have gotten too complacent. The Orientals have kicked their ass in education because their parents instill a real drive to learn and accomplish.

I seem to have wandered off-topic. The public employees have squeezed out FAR too much remuneration. I was just informed by a L.A. Times reporter that public pensions can NOT be cut by federal law. That would seem to mean that GOV will have to cut way back on services. GOV would probably like to privatize some areas. That would meant that those employees would no longer fall under the generous contract. I presume that the unions will oppose privatization.

[Rabbi Dali Rick]

Here is one of the reason for the budget..

http://projects.latimes.com/big-pensions/los-angeles/




the rebbi

[can't sit still]

Private sector wages are falling about 1 % a month. Public sector workers prefer to cut the throats of their fellow workers as opposed to taking across the board wage cuts.

"In Los Angeles, which has gutted its education budget by $1 billion in the past year alone, 5,200 school employees received pink slips last month. Since then, two thousand positions have purportedly been saved in a deal worked out with the unions that offsets job cuts with a reduction in the school year by five days, and a corresponding reduction in pay. However, with the city facing a further $600 million in education cuts this coming year, more job cuts are possible."
http://www.globalresearch.ca/index.php? ... &aid=18816

[can't sit still]

Ca has a budget shortfall of about $ 51 billion. The Jarvis foundation claims that it is actually $ 200 billion. At $ 51 billion, that's a 56 % shortfall. Somethings gotta give.

[Ugly Dougly]

Is Meg Whitman campaigning for Steve Poisoner? Every other one of her commercials focuses on Poisoner being "more liberal than he says he is". Come on, this is California, a liberal state. Arnold won when he convinced people he was a moderate.

[can't sit still]

Well, the tax projections from the Govenator turned out to be TOO optimistic. BIG effing surprise. Govenator says no tax raises. Unlike most politicians, the Govenator will try to avoid killing the economy by taxing it to death.
"California may have to eliminate entire welfare programs, including the main one that provides cash and job assistance to families below the poverty line"
OK so, welfare gets the axe.
The Dems in the legislature have only made $ 1.4 billion of cuts. If they drag their feet too long, Ca will be unable to keep up with bond payments. The credit rating of Ca is on par with Slovakia already. This is the 11th largest economy in the world. How did we fall so far,,, so fast?
http://www.businessweek.com/news/2010-0 ... ate1-.html
The Govenator says,, no FED money, no welfare. The feds are currently cutting off assistance for unemployment, I doubt that they'll print money for welfare.

Income tax revenues in Illinois fell 8.1 %. The GOV plans to increase the income tax rate by 50 %. That should make the unions happy.
http://globaleconomicanalysis.blogspot. ... reach.html
The govenor in New Jersey? did that and lowered the state revenues by $ 100 billion because the wealthy just changed their state of residency. Gonna get messy.

[can't sit still]

This isn't California, It's Illinois,, for the moment.
"A supplier refused to sell bullets to the Department of Corrections unless it got paid in advance. Legislators have gotten eviction notices for their district offices because the state wasn't paying rent. One legislator said he had to use campaign funds to pay the telephone bill after service was cut off at his office."
http://globaleconomicanalysis.blogspot. ... ushes.html
California has been in legislative gridlock. The chickens are coming home to roost. The ROSY revenue projections failed to materialize. The cuts will be much worse. Supposedly, new taxes are "off the table" I'm sure that the gridlock will continue. The original January budget is unworkable.
http://www.sacbee.com/2010/05/12/274412 ... eeper.html

[can't sit still]

Well, it seems that tax revenues in Ca are not what was expected. Very strange. Just because 1.4 million people left and thousands of businesses escaped,,, why would tax revenues be affected?
Here's a list of current escapees;
http://67.59.172.92/article/Local_News/ ... tate/67412
The pols just don't fucking get it. Socialism does NOT work.

[can't sit still]

As usual with GOV, everything negative is hidden and buried until it explodes onto the stage. There are some huge structural problems;
"By law, CalPERS can force the state to make up any shortfall, and for the coming fiscal year, that will amount to almost $7 billion."
"May 11, 2010, California was in the top ten for highest government default probabilities in the world, "
"The California budget assumes $6.9 billion in federal funds. If the entire amount is not received, then an all-or-nothing trigger will force several billion in further cuts. So far, the federal government has only guaranteed about $3 billion."
"completely eliminate (not just cut back) welfare"

http://caivn.org/article/2010/05/17/cal ... -you-think
These cuts have to be made soon or there won't be a budget in place this summer. It's questionable if vendors will accept IOUs again.

This pretty much assures that pot will be legalized. GOV can't afford to prosecute. Look at contra Costa county.
"Misdemeanors such as assaults, thefts and burglaries will no longer be prosecuted in Contra Costa County because of budget cuts, the county's top prosecutor said Tuesday.

District Attorney Robert Kochly also said that beginning May 4, his office will no longer prosecute felony drug cases involving smaller amounts of narcotics. That means anyone caught with less than a gram of methamphetamine or cocaine, less than 0.5 grams of heroin and fewer than five pills of ecstasy, OxyContin or Vicodin won't be charged. " He didn't even mention pot

http://articles.sfgate.com/2009-04-22/b ... sta-county
NOT prosecuting burglaries is going to cause some real problems.

[can't sit still]

The comptroller of Miami says that L.A. will go bankrupt in a couple of weeks;
http://www.nbcmiami.com/news/politics/M ... Miami.html
Seems doubtful to me. The former L.A. mayor, Riordan, says it will go bankrupt before 2014. I'm guessing that it will go bankrupt by the end of the year??

[can't sit still]

Here's a good article talking about budget problems in Ca.
http://www.theglobeandmail.com/report-o ... le1609891/
They never mention cutting welfare. All they talk about is raising taxes. They never mention all the businesses that are leaving. If Sacramento doesn't end the "nanny state", bond investors will do it for them.

[geekster]

Good grief, there is SO much that could be done. The California Air Resources Board could be completely eliminated. What other state has one? CARB was put into place so that unelected bureaucrats could make unpopular decisions without having to be responsible to the people. The Legislature and the Governor could wash their hands of the decisions of the board. Now we have a group that is answerable to nobody making decisions that are driving business out of the state.

Elimination of public employee unions would be another good step. Or, actually, you don't need to eliminate the unions, you just need to outlaw their political activities. It should be against the law for the unions to donate a dime to a political campaign or a party. I have no problem with teachers, police, firefighters, or any other civic employee donating to whomever they want individually but it should be illegal for the unions to donate or bundle donations. They should not be involved in politics.

I would also support a return to a part time legislature. Texas has the right idea. Elect for a 2 year term, your salary is $200 and you meet once for 90 days producing s 2 year budget. Texas is growing and has billions in a "rainy day" fund. California is broke and people are leaving.

But things are changing. The political clout of places like California, Pennsylvania, Michigan, Ohio, and New York is declining. Arizona, Nevada, Texas and Utah are expected to gain House seats in 2010. California for the first time since statehood will not gain a House seat and might even lose one. The political balance of power is shifting as the states with more "liberal" agendas are finding their economies collapsing and people moving away.

The Passage of Proposition 14 will likely hasten that process as now third parties have absolutely no shot in general elections. California is becoming a one-party state based on buying votes but they have run out of other people's money to give away. Tax the rich ... until they move away ... and the only ones left are the poor people demanding their "right" to a comfortable living. Proposition 14 will eliminate competition to that single party and cause it to go even farther out into left field which will hasten its collapse.

Actually, I say let California do whatever it wants. I and many like me will simply move away. Our earnings will no longer be taxed by an irresponsible legislature that sits around day after day cooking up new ways to bestow the fruits of my labor onto other people.

[Rabbi Dali Rick]

For the 24th straight year, California legislators have failed to deliver a state budget to the governor by the constitutionally-required deadline of June 15. This year, the date came and went without so much as whimper.

http://www.nbcbayarea.com/blogs/prop-ze ... 51154.html






saying that to say, what's new...




the rebbi

[can't sit still]

Geekster, at the risk of stating the obvious, GOV is all about waste, not efficiency. In the Democratic, Keynesian swamp, GOV has the responsibility of providing make-work for the people who have no productive capability to offer to the private sector
The U.S. has 3 % of the world's population and 50 % of the lawyers. It could be argued that the purpose of GOV is to make the world safe and lucrative for lawyers. You take the average shyster who can argue til the jury falls asleep... What could he do as an alternative?
What has DOE done for the country? You can name hundreds of boards, etc, that don't make any visible difference to the country. In the Keynesian dreamland, GOV creates these positions so that it can justify a bigger budget. The GOV workers can be counted on to vote for any programs and taxes that GOV wants.
The Keynesian lie meshes perfectly with the Hegelian Dialectic. Both are tools for attaining total GOV control and socialism. The U.S.S.R proved quite nicely that it can't possible work but, that won't keep the 'NEOnuts" from trying.
There is no possibility of having a productive state if you remove motivation and incentive. There is also no possibility of having a productive economy if you remove the very strong protections on private property.
Keynes and Hegel have a great poison recipe that appeals to GOV.

[ygmir]

the way I see it, the NeoComs don't think communism is bad, or that it failed.
They think the people running it were not smart enough to do it right...

they have no such opinion of themselves.......they think they're smarter than Marx, et al, and, can do it right "this time"......

[geekster]

ygmir, I believe you state a very accurate observation.

They believe it just wasn't done right. The fact is that it has never worked to ANY degree. Where are the socialists in Italy and France now? Even Sweden is moving right. The notion that you can redistribute someone's earnings and they will continue to be just as efficient in providing you with more of their earnings to redistribute is plain nuts.

Spain will be next. Last week they eliminated their "green power" projects as they learned that each "green" job cost them 2.2 conventional jobs. Spain may be the next Greece. You can not simply keep increasing "benefits" to people and expect tax increases to pay for it. It *just doesn't work* and Thatcher was right, you DO eventually run out of other people's money.

[can't sit still]

California RE is expected to continue to crash until 2012. That is going to crash state revenues also. I doubt that Sacramento is planning on this;
http://www.doctorhousingbubble.com/cali ... alifornia/

[can't sit still]

Well, once again, the Govenator is trying to pay minimum wage until the state has a budget.
The state controller refuses to go along. The payroll system runs COBOL. He says that he can't get it to be flexible.
http://news.yahoo.com/s/ap/20100703/ap_ ... nimum_wage