California Commits Suicide

California is on its way to self-destruction. The Budget which was just passed by both houses means that a family of four will be paying approximately $1,500.00 more in taxes at time when California can least afford it and in an economy that Obama has repeatedly equated to a quasi-Great Depression.

Why doesn't California understand that when you raise taxes, the ones you want to stay, leave? The ones who leave are the job creators, and those with resources who are tired of California's confiscatory tax system. The ones who stay are the illegal immigrants or those who clamor for the social services California provides. California's unemployment rate is 9.3% and climbing. Its budget deficit is 42 billion dollars, and this tax increase will not solve the deficit – it will make it worse.

There is an exodus from California. Millionaires in California dropped from 44,000 in 2000 to 29,000 in 2002. They are leaving in droves. In addition 1.5 million people have left California more than entered in the past decade. People are leaving because of the onerous tax burden California imposes on its citizens.

Tax revenue is decreasing not because the state doesn't tax enough, but because people leave for greener pastures where they don't have to worry about the government confiscating their hard earned money to support a state that cannot manage its own affairs because of prolifigate spending by an out-of-control legislature. Retirees take their 401ks and IRAS with them depriving California of a source of tax revenue. Businesses relocate outside the state depriving California of even more tax revenue. Anyone would be crazy to retire in California with California's tax burden. I know several people who would not come to California for that reason. two-thirds of the economy is from consumer spending. This tax increase will only cause consumers to spend less. So, what is the answer to California's ills – Raise taxes.

Yesterday California passed its budget after a grueling 48 hour stand-off. California voted in a so-called "temporary" sales tax of one cent. Nothing is more permanent than a temporary tax. Vehicle registration fees will increase from the current level of .65% to 1.15%. How is that for destroying an automobile industry already on the brink? And then we have a .25% percent surcharge on personal income tax. Aw – but that would be cut in half if we receive more federal stimulus funding than expected. Here is the kicker - California will only allow annual expenditures to increase 5% annually. Why are they allowing expenditures to increase at all when tax revenue is failing to keep pace with expenditures? Any business would slash costs when it fails to meet its goals. Tax revenues do not materialize, but California continues to spend. When tax revenues fail to materialize, the state will try and raise taxes again.

The Wall Street Journal stated the following:

It's sad to watch. The Golden State -- which a decade ago was the booming technology capital of the world -- has been done in by two decades of chronic overspending, overregulating and a hyperprogressive tax code that exaggerates the impact on state revenues of economic boom and bust. Total state expenditures have grown to $145 billion in 2008 from $104 billion in 2003 and California now has the worst credit rating in the nation -- worse even than Louisiana's. It also has the nation's fourth highest unemployment rate of 9.3% (after Michigan, Rhode Island and South Carolina) and the second highest home foreclosure rate (after Nevada).

Political Vanguard reports that the California budget was a mere $50 billion in the early 1990s. It more than doubled since then and in the last five years, it increased over 40%. That constant growth matched against a fluctuating revenue stream is the anatomy of our current crisis.

Year	Revenue	Expenditures	Deficit
00	88,419,000,000	96,382,000,000	-7,000,000,000
01	89,780,000,000	99,220,000,000	-9,440,000,000
02	95,794,000,000	106,779,000,000	-10,985,000,000
03	96,365,000,000	104,223,000,000	-7,858,000,000
04	104,462,000,000	107,591,000,000	-3,129,000,000
05	118,347,000,000	119,612,000,000	-1,265,000,000
06	120,663,000,000	129,968,000,000	-9,305,000,000
07	126,030,000,000	145,227,000,000	-19,917,000,000
08	129,788,000,000	141,031,000,000	-11,251,000,000

Source Politicalvanguard.com

All Democrats and three Republicans from the Senate and three Republicans from the House voted for passage of the Budget. Republicans who voted for this should be voted out of office. The Republicans who should be voted out of office are: The Senate: Roy Ashburn of Bakersfield, Dave Cogdill of Fresno, and Abel Maldonado of San Luis Obispo. The three Republicans in the Assembly are Anthony Adams of Claremont, Roger Niello of Sacramento and Mike Villines of Fresno.

California is racing to be number one, number one in the highest state taxes in the country.

Who will be the last man standing in California?

The Dow is down another 172 points at 7,293, and there is no bottom in sight. Again, how does the market like Obama's stimulus package?

 
 

California – Paradise Lost

Santa Cruz is only about an hour's drive from where I live. I love to eat on the wharf with an ocean side view by the boardwalk. It is one of those many pristine places that beckons visitors who come from miles around to see what California has
to offer. I have posted several pictures. The first one is of the restaurant where

we ate, and the second one is of my daughter standing on the wharf. The others are various pictures taken from the wharf near the Santa Cruz beach boardwalk.

California is a beautiful place to visit, and for years it has been the "in" place to be. Of course, with the incompetence of the current governor and legislature, one has to think twice before settling in California. California is drowning in an ocean of debt. The current governor Arnold Schwarzenegger is a pompous, arrogant,
incompetent ass. Arnold's anti-business policies have caused an exodus of companies and the well-to-do in search of greener pastures. Millionaires in California dropped from 44,000 in 2000 to 29,000 in 2002. It's not because they are poorer – it's because they are leaving in droves. In addition, 1.5 million people have left California more than entered in the past decade. Liberals have said less people in California is a good thing, but then who provides the jobs and pays the bulk of the taxes. It's not the immigration from Mexico. In fact, it is this exodus that hurts the poor even more. I wonder how much tax California will collect once every productive citizen is gone.

If you look at the migration pattern from moving van companies, many more people leave California than enter. In fact, it is much more expensive to hire a moving van company to move out of the state than into the state. This is because of more people leaving than entering the state.

California has one half trillion dollars of outstanding bonds (voters keep voting in bonds even though the state is 40 billion dollars in debt, most recently a fast speed train to go from San Francisco to Los Angeles). California has the third highest income tax rate in the nation, 10.3% for its highest earners. The richest ten percent pay 75% of the income tax burden.

Recently on 60 minutes, Arnold blamed the recent California forest fires on man-made global warming. His ignorance on the subject is astounding. The massive fires in California were caused by environmentalists such as the Sierra Club preventing the cleaning of the forest floors and controlled burning. How can you fix something if you cannot even identify the problem? Schwarzenegger has begun a one man crusade against man-made global warming, a pseudo-science perpetuated by those with an agenda and the ill-informed. The terminator has in effect set up California as his own kingdom. He doesn't believe his anti-business actions will have any detrimental consequences to the state. Of course, the data shows that the converse is true. In 2007, California passed legislation to restrict carbon emissions on power plants, cement producers and oil refineries. Even if man-made global warming were true, you do not have to be a rocket scientist to figure out that California's legislation would have little impact on the world's greenhouse gases, and you don't need to be a hollywood actor to figure out how destructive it would be to business. Arnold campaigned on being pro-business, but he has been just the reverse.

Arnold campaigned to increase the minimum wage in California. California's minimum wage is already one of the highest in the nation. This further crimps business, and causes even more companies to shut down or leave.

One of Bill Clinton's successes was putting people on welfare back to work, but not California. California requires a five year time limit on welfare benefits. The cost to the state is 1 to 2 billion dollars per year. Because of this, California was one of the least successful states in reducing welfare in the late 1990s. Moreover, people have been drawn to the state for its welfare benefits.

Ten years ago the budget increased from 65 billion dollars to 130 billion dollars during the terminator's tenure and with less revenue. How is that for insanity? Of course, the time bomb is CALPERS, (The California Education Retirement System) with 26 billion dollars of unfunded liabilities, the teachers retirement system 20 billion dollars in the red, and health benefits another 48 billion dollars.

We are lucky that the terminator failed in his attempt to nationalize California's health care system. The cost of this program would have been 14 billion dollars a year. Employers that didn't provide health care to their employees would have been assessed a payroll tax – so take that businesses. Ronald Reagan once said when running against Jimmy Carter, "It is a recession when your neighbor is out of work, it is a depression when you are out of work and it is a recovery when Jimmy Carter is out of work." Will we have a recovery when the terminator is out of work? Can't he find employment in Austria? I can't wait to hear the words, I won't be back.

The electorate needs to revolt like it did with proposition 13 in 1978. California could become the place it once was, but the state has become so entrenched with inept politicians, one has to wonder when it will happen. This state is run by morons.

Source: "The End of Prosperity" by Arthur B. Laffer, Stephen Moore and Peter J. Zanous

Budget Crisis in California?

Every once in awhile the San Francisco Chronicle does a good investigative piece. Could this have something to do with the budget crisis in California?

(06-29) 20:24 PDT -- A nurse at a state prison in Monterey County collected $198,000 in overtime last year - bringing her total pay to more than $310,000.

The chief investment officer for the state's pension system earned $403,000 in bonuses - for a total paycheck of $945,000.

<< Find state workers' overtime and other extra pay >>

And a deputy chief for the California Highway Patrol collected a lump-sum payout of $103,000, even though she retired almost two years ago and didn't collect a cent of regular pay last year, according to a Chronicle analysis of state workers' pay.

The extra pay is among $2.1 billion given to state employees in 2007 - including overtime, bonuses, premium pay, relocation allowances and lump-sum payouts.

Pushed upward by a surge in overtime, these payouts are helping to drive up the state's costs at a time when California is facing a $17.2 billion budget deficit.

"There's a lot of unaccountability around these types of extra pay," said Christina Lokke of the nonpartisan government watchdog group California Common Cause. "Who is making the decisions about who gets this money? Why are certain people getting these benefits that others don't get? Many of these things seem to be decided under a veil of secrecy."

The extra pay pushed the total earnings of 616 of the state's 364,000 employees to more than the $212,000 Gov. Arnold Schwarzenegger would make if he accepted his annual paycheck. That included 274 psychiatrists, 48 investment officers, 23 prison guards, 18 nurses and three fire battalion chiefs.

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