2nd furlough begins as Calif. budget talks stall

[villager]

Source: AP

2nd furlough begins as Calif. budget talks stall
By The Associated Press


SACRAMENTO - Most state government workers are staying home today for the second time this month while Gov. Arnold Schwarzenegger and top lawmakers work to close California's $26.3 billion budget deficit.

Without a balanced spending plan, the state was operating in a lopsided manner as the recession drags down tax collections. The projected deficit amounts to more than a quarter of the state's general fund, and to conserve cash, the state has begun issuing IOUs to contractors and government workers are being furloughed three days a month.

A state-sponsored children's health insurance program planned to stop enrolling new clients Friday, the first time that the Healthy Families program has done so since it started in 1997. And at least one more major bank was scheduled to stop accepting the state's IOUs.

California's budget impasse brought rebuke Thursday from state Treasurer Bill Lockyer, who warned that further delays on resolving the state deficit will threaten the state's ability to build schools, highways and levees. Lockyer said the state's recent credit-rating downgrade could jeopardize its ability to secure financing for infrastructure projects, which would hurt businesses, local governments and ultimately, taxpayers.

"Give Californians and the world a pleasant surprise for once: Balance the budget now, and get back to the work of getting our state back to work," Lockyer said in a statement.

It was not clear if a meeting would be called today. The governor didn't meet with Democratic lawmakers on Thursday.

<snip>



Read more: http://www.dailynews.com/news/ci_12858862?source=rss

[Flaneur]

1. I really don't get it. How do you fix a $26 billion budget hole?

[slackmaster]

2. You avoid the hole in the first place by budgeting responsibly over the years

It's too late for that now. The state has to cut spending.

[Flaneur]

4. Well, that's what I mean. Where do you cut $26 billion?

Shut down the university system for a year?

Quit providing benefits to poor people?

Empty out the prisons?

Lay of half of state employees?

Renege on pension payments?

Are we even getting close yet?

[Javaman]

5. The reality is, they have to raise taxes while also cutting programs

but no one wants to be the first one to say, "let's raise taxes".

all those morons in the california government are more concerned with getting reelected that doing what needs to be done.

it's like the queen of hearts and her court presiding over things.

[dysfunctional press]

25. "Shut down the university system for a year?"

just a year?
the budget shortfall will be back next year as well. and the year after that...etc.
unless they make fundamental changes.(i.e. cut programs & raise taxes on the people with the money)

[lindisfarne]

7. The problem isn't irresponsible budgeting. The problem is what the state is dependent on for its

revenue. Plus the 2/3 requirement to create/raise a tax.

[Garbo 2004]

16. Budgeting responsibly includes not further reducing revenue by cutting taxes to big corporations.

Or not touching tax loopholes for wealthy, corporations while targeting and cutting programs for poor, disabled, public health and safety, etc.

For example, re: tax break on corporations passed in February of this year while State trying to close deficit:

Budget Includes Billions in Corporate Tax Breaks
http://www.californiaprogressreport.com/2009/06/budget_includes.html

Corporate Tax Breaks in Last Budget Deals Benefit Few, Says Report
http://www.californiaprogressreport.com/2009/06/corporate_tax_b.html

Feb LA Times article: California budget plan includes corporate tax breaks, individual tax hikes
Business would get nearly $1 billion in breaks, while the average person would pay higher taxes five ways. Republicans say the plan would create jobs, but others dispute the claim.
http://articles.latimes.com/2009/feb/14/local/me-budget-taxbreaks14

A 2005 LA Times article on leaving intact tax breaks/loopholes for wealthy, corporations: https://caclean.org/problem/latimes_2005-01-24.php

[WriteDown]

3. The state could win the CA state lottery...

Oh wait....

[lindisfarne]

6. Spread out over 36 million people in CA, it's not that bad. MN had a $5 billion deficit

with <5 million population.
The problem in CA is that it takes a 2/3 majority to raise taxes, and Prop. 13 keeps property taxes ridiculously low for very rich people - income based property tax reduction would have made far more sense, and kept the state from this kind of a mess.

[WriteDown]

8. Income based property tax?

Isn't that known as just "income tax." Considering that CA has some of the highest taxes in the country, this does not appear to be the problem. And how exactly does prop 13 allow very rich people to pay low taxes?

[bobalew]

9. Let me try to explain...

This is a very 'Historical' problem: Only Those who owned property at the time Prop 13 was passed, and continue to do so are benefiting from the Low Property tax rates. These tend to be the Older, and More affluent members of our population here in California. If You Sold & bought thereafter, you don't get the break, but a seriously large number of property holders are still hanging on to their properties that benefit from the Reduction provided, so, the property tax rates have not gone up with the rest of us, for ~20 years. This has resulted in a large chunk of missing cash from California's tax coffers.
Now, add the fact that it's darn near impossible to raise any more State taxes, and revenue streams, and you got the picture. If you weren't cognizant, or born at the time this occurred, You might have missed the idea of the Impact this proposition would have in the future, at the time it was implemented. We all felt some Tax relief for the first few years, but the law of unintended consequences had it's way with us, in the ensuing years since. Just Sayin. If you were around and could figure it out at that time, My apologies...
Regards, Bobalew

[WriteDown]

10. Why does older automatically mean more affluent?

Where is the correlation there? They may have accumulated more wealth, but it seems unlikely that their income streams are higher. Regardless, even without ANY property taxes, CA's taxes are some of the highest in the country (I believe NJ has it beat though.) The amount of tax revenue does not appear to be the problem.

[Bette Noir]

12. The previous explanation was unclear.

Our property taxes are based on the amount you paid for your property, and can never go up unless you build onto the house. Usually, property values in California only go up, so people who stay in one place for several years pay their taxes based on a small fraction of their homes' worth. In years like this, when values go down, people can have their taxes lowered, and not have them go up again later.

Business properties are immune from increasing taxes, due to loophole shenanigans that insure their assessments never go up. These properties are paying taxes based on what they were worth in the 1970s, which is maybe 10% of their current value.

[WriteDown]

13. Not necessarily a bad thing....

Given the meteoric rise in property values in CA over the last few years (all due to an artificial bubble), can you imagine how many people would have been forced out of their homes do to skyrocketing property taxes?

[ProgressiveProfessor]

22. You mistate the law and the facts

When property values go down, the owner can get a tax cut. However, when the value goes back up, the taxes can rise at an unlimited rate until the prior original value is reached.

The Hamm study, using Board of Equalization data, found that owner-occupied residential property is assessed at 53% of the current market value; at 60%, commercial/industrial property is assessed closer to the higher current market value.

[Star]

37. Really?? 53% of current market value?

Not my home in SoCal. When I bought it in 2005, it was assessed $20,000 HIGHER than what I paid for it. They re-assessed it this year, and lowered its value by $190,000, which is just about market value right now.

[David__77]

14. It's the problem if you want to maintain the existing social contract.

California is not the same of other states in its social contract. Low fee higher education, health care for all children, better care for the disabled, mandates regarding minimum education funding - all these things are part of the institutional structure of the state. Revenue certainly is the problem, because we're simply trying to meet our pre-existing commitments, not expand them, and yet the revenue isn't there. The solution is to alter the social contract or to expand the revenues.

[WriteDown]

15. When the "existing social contract" simply promotes...

gentrification. It needs to be changed.

[David__77]

17. How does it promote gentrification?

I am curious what you mean...

[WriteDown]

18. Just go to San Francisco....

All white, all the time. Seattle may be a close runnerup.

If the elderly and poor were hit with proportional property taxes based on the bubble, then they would be forced out of their homes. Seattle is a good example of how this works. http://www.blackpast.org/?q=perspectives/gentrification-integration-or-displacement-seattle-story

[David__77]

19. I do not propose that.

I do, however, think commercial property taxation should be reformed in this state.

San Francisco is not all white. It's a "majority-minority" city, and there has been no trend toward an increase in the share of whites of the total population.

That said, high housing costs are a real problem there. But I do not think that scrapping social services, building codes, or repealing labor protections is the solution.

[WriteDown]

20. These are the results though....

I go to my old haunts in Spanish Harlem and see the same results. And the only reason that San Francisco can be considered minority-majority is due to the large Asian-American population.

[junior college]

23. I call BS on "All white all the time"

Whites make up around 49 percent of the population. There are large neighborhoods in San Francisco that are dominated by blacks and Hispanics such as Hunters Point and parts of the Mission, Excelsior, Sunnydale/Visitation Valley.

[WriteDown]

24. Tokens at best....

http://quickfacts.census.gov/qfd/states/06/0667000.html

compared to NYC

http://quickfacts.census.gov/qfd/states/36/3651000.html

[junior college]

27. One hundred and seventy thousand blacks and hispanics are tokens?

I'd keep that opinion to yourself next time you visit here. Your health depends on it.

[WriteDown]

28. Typical San Franciscan...

We have enough dark people here. See! We're diverse! :eyes: 7.9% is pathetic.

[junior college]

29. I'm black and I don't appreciate your racist assertion that I am a token

And secondly, you originally referred non-whites and now you've decided to focus exclusively on blacks for your 7.9% statistic. I don't mind a spirited debate but please leave your racism at the door.

[WriteDown]

33. Blacks are subject to a different kind of racism than say

Asians as you well know. Just look at the demographics for education between the groups. I am not just throwing out opinions on San Francisco. These are well known facts.


http://socialismandliberation.org/mag/index.php?aid=709

http://www.sfbayview.com/2009/gentrification-the-new-form-of-segregation/

[junior college]

34. To be honest

I'm not black. But we are not a city of all white and Asian people as you suggest. Blacks and hispanics combined make up 22% of the population. 22% is not bad when you compare it to say Manhattan, where the percentage of white people is greater than that of San Francisco.

[WriteDown]

35. Thanks for your honesty...

My sister lives in San Fran (well Alameda) and coming from NYC and then Dallas, I was amazed by the different demographics. Its a well-known issue that many Black leaders have addressed. It really is fascinating.

[slackmaster]

31. Fascinating

:popcorn:

[ProgressiveProfessor]

21. Utter Nonsense

The 1% limit is for all homes. Everyone gets "the break" you describe. Its not limited to homeowners who owned their property when it passed.

[slackmaster]

30. Your understanding of California property taxes is weak and incomplete

The idea is to lock in a reasonable annual tax payment based on what you paid for your home, so that it remains predictable throughout the time you own your home. Under the system that preceded Proposition 13, your property could be reassessed every year and the tax on it raised accordingly.

People (like my parents) who were fortunate to have bought property that appreciated in value dramatically were subjected to unconscionable increases in property tax. My mom's house quintupled in value from 1966 to 1978, and so did the tax on it. But our family income did not increase at anywhere near that rate. People who were on fixed incomes suffered the most. How can you budget for a tax that is based on a market value that may fluctuate wildly over time, and over which you have no control?

Only Those who owned property at the time Prop 13 was passed, and continue to do so are benefiting from the Low Property tax rates. These tend to be the Older, and More affluent members of our population here in California.

That is nonsense. I'm 51. I bought my house in 1994. Even with the recent drop in prices, mine is worth about three times what I paid for it. Would it be fair to me to have my property tax triple what it was when I bought the house? I don't believe it would. My property tax has increased steadily by 2% every year. Stable, predictable, and affordable. That is actually a big factor in my decision to keep this house. If I sell it now and buy another one of comparable value, the increase in property tax would cost me more than $200 per month in addition to having a mortgage payment about triple what I currently pay. The people next door to me on either side bought their houses in the early 1960s and pay a lot less in property tax than I do. That doesn't bother me a bit. That is how the deal works. You buy your house, you pay your mortgage, taxes, and insurance. Maybe some day you have your mortgage paid off, and the tax assessor cannot hit you with an unexpected increase in property tax.

I voted for Proposition 13 when I was 20 years old because of what abusive property taxation was doing to my parents and many people I knew. I would not even consider voting to repeal the whole thing. The only real problem as I see it is that it's too easy to avoid reassessment on commercial property by forming and dissolving businesses. Commercial property changes hands in reality without doing so in the eyes of the assessor's office. That is wrong and should be changed.

But politicians can keep their money-grubbing hands off of my home. I didn't buy it as a financial investment. The fact that I have gained substantially in equity means little to me, because I have no intention of selling the place, ever. I have not profited from the gain in market value, and probably never will.

[Bandit]

36. You go where the money is

Tax the VERY WEALTHY.. They will still be VERY WEALTHY but the rest of society will function better or just function..

[Bette Noir]

11. We Californians have to demand that our government start acting like grownups.

We have to take the lead, and act like grownups, ourselves.

We know, as grownups, that having nice things takes money, and bills have to be paid. We can't spend $100 and expect to get a new Lexus. If we buy a new Lexus, we know we have to make the payments every month. Yet our government, with the support of the voters, goes into this routine every year, where it threatens to hold its breath until it turns blue, unless that $100 Lexus turns up in the garage, no further payments owed.

If we want nice things, if we want to live in a state with good schools, nice hospitals, and parks that are open and available, we have to pay for them. We have to freakin' pay enough taxes to have the kind of state we want to live in, rather than pay Bangladeshi taxes, and expect a Swedish quality of life.

Edited for typo.

[Wednesdays]

26. K&R

:kick:

[warrior1]

32. It's three days not two.