Why is CA broke after having very high taxes (excpt Property)? (Sacramento: sales, incomes)

[ashguy77]

I have been wondering about this. After moving from Dallas here last year, I have to pay additional 9-10% State Income Tax. The Sales Taxes are ridiculously high. Registering my car was 4-5 times as expensive. Then why is CA broke??

I read a few articles and the main reasons cited are:
* Proposition 13, limit on increase in Property Taxes
* People on welfare including Illegal Immigrants
* High Prison costs due to 3 strikes and other rules
* Unions, like Teachers etc.

What other things cause this? It's unimaginable where the revenue goes as the revenue must be one of the highest in the US.

Thoughts?

[Lovehound]

The answer is simple. It's the budget, in the same way that you or I or anybody has to live within a budget.

You earn so much (i.e. taxes), you spend so much (government programs) and you borrow money and pay off your debts. In the short term if you spend more than you earn then you have to borrow money, but in the long run if you keep spending money you will go broke.

There are only two ways out of the mess: either raise taxes or reduce the size of government programs. (Or both.) Of course the devil is in the details.


It would be interesting to know what percentage of the California state government's income comes from property taxes. Thirty percent? Five percent? If the number is small then Prop 13 shouldn't be a very big factor in the current problem.

My opinion, they just spend too damned much.

[SoCal35]

Actually, the state's REVENUES are volatile in ALL recessions largely because household incomes DROP in recessions too. Calif. relies quite heavily on INCOME taxes and to a lesser degree business taxes.

See this report from 2005 from the non-partisan Legislative Analyst Office which explained the volatility in the state's tax revenues.

http://www.lao.ca.gov/2005/rev_vol/r...ity_012005.pdf

[SoCal35]

The BIGGEST problem in the California budget process is two fold in my opnion:

1. A two-thirds vote is required in the state legislature to pass a budget;
2. A two-thirds vote is required in the state to pass any tax increases;

Point number one dates back many decades and is unfortunately written into our state's extremely outdated and in need of reform state constitution. I do NOT think there is any other state with such a crazy requirement.

Point number TWO is directly an outcome of Prop. 13 and REQUIRES a 2/3's vote for any tax increase.

Very hard to govern when you have tied the hands of the legislators in such a way. I am NOT saying we need to RAISE taxes. But I am saying let the pols we send to Sacramento have all the tools at their disposal. The voters can decide if they went to vote them back in or kick them out. But handcuffing them and crying foul everytime there is a budget impasse is just pointless.

[ashguy77]

I believe Government should be clearly posting "Here is where the money goes" on a website or such. Where are they squandering all the money? I definitely want to see "Here is what we collect and here is where it goes". If anyone has a link, please post!

[SoCal35]

That info is readily available from both govt and non-govt sources. I don't have a link...but you can try one of the following:

1. Departement of Finance (state agency)
2. Legislative Analysts Office (also a state agency)
3. Public Policy Institute of Calif (a private, non-profit think tank)
Public Policy Institute of California (PPIC)

[SOON2BNSURPRISE]

Reagan and Deukmeigan were 2 govonors that were able to reduce taxes and get us out of a financial jamb. Both owe the problems that got them into office left over from former Govonor Brown's. When Reagan became Govonor Edmond Brown was the Govonor and he had left the state with a very large debt. Reagan was able to correct the problem and left office with the largest surplus that the state ever had at any time in its history.

Jerry Brown became govonor after Reagan left office and he ended up taking the surplus that the state had, spent it and left the state in debt again.

George Deukmijan was elected when Jerry Brown left office and he left he paid off the deficit left over by the Brown administration and left the state with a healthy reserve fund. Prop 13 was in effect at this time showing that property taxes are not a factor in staying out of debt.

Now we are in bad shape and Brown is back again to seek for office as the Govonor. Does anyone read history? Why in the current condition of the state would we want to turn the state back over to that guy?

Why do you ask are we in this mess? We elect officials that create budgets that the state can not sustain. we allow them to spend, spend, spend when we the people of this state have no way of paying the bill. They create unatainable budgets promise to pay when we have no money and then claim that the only way to get out of the mess is to raise taxes.

[SoCal35]

Originally Posted by SOON2BNSURPRISE

Reagan and Deukmeigan were 2 govonors that were able to reduce taxes and get us out of a financial jamb. Both owe the problems that got them into office left over from former Govonor Brown's. When Reagan became Govonor Edmond Brown was the Govonor and he had left the state with a very large debt. Reagan was able to correct the problem and left office with the largest surplus that the state ever had at any time in its history.

This is simply NOT true. Reagan RAISED taxes while Governor of California. In fact, they were the BIGGEST tax increases in the state's history (up to that time).

[Lovehound]

Originally Posted by SoCal35

The BIGGEST problem in the California budget process is two fold in my opnion:

1. A two-thirds vote is required in the state legislature to pass a budget;
2. A two-thirds vote is required in the state to pass any tax increases;

Point number one dates back many decades and is unfortunately written into our state's extremely outdated and in need of reform state constitution. I do NOT think there is any other state with such a crazy requirement.

Point number TWO is directly an outcome of Prop. 13 and REQUIRES a 2/3's vote for any tax increase.

Very hard to govern when you have tied the hands of the legislators in such a way. I am NOT saying we need to RAISE taxes.

That's simply ridiculous. If there wasn't any two-thirds super majority required then taxes would skyrocket. The two-thirds is the only reason they haven't.

What we need is to cut the size of our bloated government programs.

[SoCal35]

Originally Posted by Curmudgeon

For SoCal35, two other states require a super majority to passed their budget. Arkansas' legislature must obtain a three-fourths majority on appropriations for all purposes except education, highways, and paying down the state debt. In Rhode Island, appropriations for local or private purposes require a two-thirds majority vote. Because the state typically drafts all main appropriations bills for operations into a single budget bill, a two-thirds vote has been effectively necessary for all appropriations.

Until there is realistic, non-partisan redistricting and until Californians take enough interest in the process to educate themselves politically and until the people eschew political party affiliation in favor of real policy and until the super majority is no longer necessary and until the constitution is changes to require all propositions to be self-funding and until the people rise up and say, "No!" to deficit spending, tricks, smoke and mirrors, borrowing and unfunded mandates, the problems will only continue.

Meanwhile, CA continues to circle the drain at an ever-increasing pace!

Ok, I wasn't sure...I stand corrected. Still, I think it's a real problem...though definitely NOT all of the problem.