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Old 01-21-2009, 09:30 PM
 
46 posts, read 82,056 times
Reputation: 29
Default New set back in balancing CA budget crisis

Gov. A.S. had ordered a 10% reduction in salary across the board for state employees as well as two furlough days a month for the next 18 months. This was supposed to help aliviate and balance the budget crisis. It would also save many people from loosing their jobs. The measure would start next month (February 09). However, the State Controller has refused to follow orders and cut salary on state employees.

Furloughs illegal, controller says - E-mail Alerts -- Election News - sacbee.com (http://www.sacbee.com/1095/story/1563302.html - broken link)
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Old 01-21-2009, 09:43 PM
 
Location: The High Seas
5,511 posts, read 6,477,710 times
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Is Arnold's middle name Siegfried?
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Old 01-21-2009, 09:57 PM
 
Location: LB/OC for now...
5,112 posts, read 11,294,337 times
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sounds like a sound plan.. too bad the legislature doesnt have the balls to push for it as well
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Old 01-21-2009, 10:07 PM
 
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I guess the problem isn't as bad as it's hyped up to be... or the powers that be want the State to crash and burn.
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Old 01-21-2009, 11:05 PM
 
Location: In Transition
1,304 posts, read 819,366 times
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Quote:
Originally Posted by miss cali View Post
However, the State Controller has refused to follow orders and cut salary on state employees.

Furloughs illegal, controller says - E-mail Alerts -- Election News - sacbee.com (http://www.sacbee.com/1095/story/1563302.html - broken link)
Hmmm. Funny, didn't hear a peep from him when the Assembly tried to pass an illegal tax increase (http://www.nctimes.com/articles/2009/01/20/opinion/walters/zd5e9d64561b6efd78825753e006c951a.txt - broken link). Can you say partisan politics anyone?
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Old 01-22-2009, 01:18 AM
 
3,843 posts, read 7,807,925 times
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The budget crisis is going to get worse. I have been looking at the budget numbers (I am studying accounting so yes, I did enjoy it haha). The first thing to look at is where is the money coming from. See this chart for where the $$ is coming from:



As you can see, the largest source is from personal income tax and the second is sales tax. Nearly 70% of the revenues are coming from these two sources. Now, here is where the problem arises. CA is in a major economic meltdown. Job loses are high as well as unemployment. When people are unemployed they don't pay income taxes and they don't spend as much. To say the least in the next couple years CA is going to see these two sources of revenue drop. This will make the crisis that much worse.

We also need to look at where the money is going:



Education and health/human services comprise nearly 65% of the spending. If we are to tackle the root of this problem that is where we need to look.

Doing a straight line cut is a quick fix but not in the long run. You need to go in there cut out the fat and make it more efficient. We need to go after spending simple as that. Raising taxes will only LOWER the overall tax revenue. As you can see, more people are leaving CA than coming in. That could be a big problem. People are getting to the point of saying, "Why stay in CA and pay 0-10% personal income tax when I can go to Texas and pay no income tax? I am one of them.

Last edited by killer2021; 01-22-2009 at 01:30 AM..
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Old 01-22-2009, 04:27 AM
 
Location: Las Flores, Orange County, CA
26,365 posts, read 51,689,764 times
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Quote:
Originally Posted by killer2021 View Post
"Why stay in CA and pay 0-10% personal income tax when I can go to Texas and pay no income tax? I am one of them.
Wouldn't it be more complicated than that considering the property tax rate in Texas is significantly higher than in CA?
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Old 01-22-2009, 08:43 AM
 
1,078 posts, read 2,418,797 times
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Quote:
Originally Posted by Charles View Post
Wouldn't it be more complicated than that considering the property tax rate in Texas is significantly higher than in CA?
The rate is higher, but the property values are far lower for similar properties.
What you need to look at is the total tax burden.
Here is a site that has some comparisons:
StateMaster - Total tax burden (per capita) (most recent) by state

This can also vary dramatically from one person to the next. But it is a good place to start.
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Old 01-22-2009, 08:48 AM
 
1,078 posts, read 2,418,797 times
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Also, let me add. The chart measures "per capita". This can be deceptive. If you will notice that Wyoming is a high tax burden state. But Wyoming has no sales tax and no income tax. It's property tax is effectively average. But because the state collects a ton of tax from the coal and energy industries in the state and because the state has so few people, the effective tax burden per person is high. But each person is not paying these taxes, it is industry that is. That industry is charging that tax to all its's customers, who are nationwide.
Comparing what you or any person will pay in taxes is purely individualistic. I might be better off in Texas, while someone else might be better off in Hawaii or Calif.
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Old 01-22-2009, 08:52 AM
 
566 posts, read 1,216,023 times
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I think Texas taxes are better especially for high earners. You will pay 1% property tax or $6000 per year on a $600,000 California home. Texans pay 2.5%. However the $600,000 CA home only costs $300,000 in Texas. So the Texan will pay $7500 in property tax compared to the $6000 paid by the Californian for the same house.

But California income taxes more than make up for the small difference in property tax. Assuming the average Californian pays $5000 per year in state income tax and the Texan pays no income tax the Texan pays less in total taxes.

Where the big problem lies for California is the way it taxes high earners. Become one of those targeted with California's 10.3% tax rate and Texas becomes much more attractive. And it's those in the 10.3% bracket that provide the capital to create new jobs. What is California thinking? Drive away those who are the most benneficial to the state? It's truly a case of wanting to eat the golden goose. Democrats wake up!
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