Been reading that California has a $19 BILLION  :o budget shortfall problem for the 2010-2011 time period.  Schwarzenegger has proposed some pretty serious cuts to a number of programs and the criticisms have been pouring in.

Howevere I will not choose sides on those specific cuts, pro or con.  What I have done is pull up the proposed budget document:

http://www.ebudget.ca.gov/pdf/BudgetSummary/FullBudgetSummary.pdf

Basically here is how spending breaks out in California:


K-12 education $35.0 billion
Colleges $10.5 billion
Health & Human Services $24.9 billion
Judicial $1.9 billion
Prisons & Rehab $8.2 billion
Everything else $4 billion


Meanwhile, the primary sources of income are $47B from income tax, $29B from sales taxes, $10B of corporation tax, and the rest are various usage fees or vice taxes.

Seems to me that California's problem is very structural and they will HAVE to incur deep cost cuts (and perhaps some tax increases too).  Why?

A $19B cost problem would mean roughly a 40% increase in personal income taxes.  Or a TRIPLING of corporation taxes.  Or a 50% increase in sales tax.  Those things are not going to happen, at least not on that scale.

Looking at the spending breakdowns, taking out $19.9 Billion will REQUIRE cuts to health, education, prisons, etc. 

Time has come, I think, for California to "get real" and address its finances.   That definitely means drastic spending cuts and likely some tax increases too.  They cannot keep living the way they have.

I do have one recommendation... in those top 3 spending categories, how much $$$ is being wasted on bureaucracy and featherbedded staffing?  Also, how much state money is being blown on paying for services to illegal immigants?  These should be clear targets to budget attack.  Get rid of the waste, and funding criminals and you'd have alot of savings right there.  Although not enough to get all $19 billion, I would guess.

(Note that costs reductions on illegal immigrants will also, however, cause some reduction to revenues, because illegals do pay sales tax, etc... on transactions, so this is not all "gravy")


Any thoughts? ??? ??? ???

If they raise taxes too much, people won't be able to afford to live and do business in California. 
If they cut spending too much, people won't want to live and do business in California.
BUT
California has to do one or the other so they're damned if they do and damned if they don't.
:-\\

Getting rid of their ridiculous referendum system would be a nice start.

Getting rid of their ridiculous referendum system would be a nice start.


That has already been proven to not work.  Over and over the people of the state will pass such a referendum, and the legislature simply ignores it.

A great example is how taxes are enacted.  Because of Proposition 13 and others, the legislature can't raise or implement new taxes without the approval of the voters.  The idea behind this was to prevent them from raising property and other taxes to an unrealistic level, and to help curb the spending.  However, this has largely failed.

And this is because even though the legislature still finds more and more clever ways to take money from the citizens, they now call them fees, not taxes.  If you get a traffic ticket, there is a 100% fee in addition to the fine you have to pay.  When you register your vehicle there is the registration charge, then an additional fee that depends on their assesment of the value of your vehicle (set at roughly 2-4 times what the bluebook says).  Thet are not allowed to raise sales taxes without voter approval, but they can enact a tempoary (less then one year) increase in the sales tax.  So you now have a permanent sales tax that is 1-2% higher then that approved by the voters, that expires for one day, then comes back with a new name.

Of course, those referendums also do other things.  Prop 187 was intended to curb illegal immigration, but it has been tied up in court since the day it passed.  Proposition 215 is the one that legalized medicinal marijuana, and we know what that has turned into.  Proposition 209 abolished affirmitive action in the state school system.

But to some people, I guess they would rather see everything in a state dictated to the citizens by the legislature, with no recourse by the citizens to do anything about it.

Generally speaking, fiscal policy works best when politicians are allowed to make decisions without referendums being involved.  If the policies are bad, then the people can simply vote out the offending officials.

Referendums really only work with social issues.

Generally speaking, fiscal policy works best when politicians are allowed to make decisions without referendums being involved.  If the policies are bad, then the people can simply vote out the offending officials.

Referendums really only work with social issues.


There is no such thing as a social issue that does not have fiscal impacts.

Generally speaking, fiscal policy works best when politicians are allowed to make decisions without referendums being involved.  If the policies are bad, then the people can simply vote out the offending officials.

Referendums really only work with social issues.


Absolutely.  Cal's budget problems have led to the destruction of what was one of the best public university systems in the country.

Absolutely.  Cal's budget problems have led to the destruction of what was one of the best public university systems in the country.


Understood.  That's a problem.  Now...

-Where do they need to CUT SPENDING ?

-Where do they need to RAISE TAXES ?

I did some research (see http://www.taxfoundation.org/taxdata/topic/15.html ) and apparently California ranks as in 6th place for the highest state/local individual tax burden, and 48th (near-worst) in terms of business tax climate, and 7th highest corporate income tax rate in the country.

Given the above tax ratings, I am kinda thinking that substantial tax increases are not going to be in the picture.  So... where do the cuts have to take place? ???

There is no such thing as a social issue that does not have fiscal impacts.


To a degree, yes.  However, I was referring more to things like gay marriage.  There isn't much of an economic side to that.

To a degree, yes.  However, I was referring more to things like gay marriage.  There isn't much of an economic side to that.


To mix zoological metaphors "gay marriage" is a red herring to distract you from the 800-pound gorilla in the phone booth!
:D

And what is the 800-pound gorilla in the phone booth?  The complete and utter failure of Reaganomics, not just in California, but everywhere it has been tried.

To mix zoological metaphors "gay marriage" is a red herring to distract you from the 800-pound gorilla in the phone booth!
:D

And what is the 800-pound gorilla in the phone booth?  The complete and utter failure of Reaganomics, not just in California, but everywhere it has been tried.


In the grand scheme of things, gay marriage isn't an important issue, but that's precisely why it's one of the few issues I would actually allow the people to make a decision on.  We elect politicians to make the important decisions, because (at least in theory) they are supposed to be more competent than the average person.

Granted, in practice, this principle has shown itself to be somewhat flawed.  The problem is that the average person is too stupid to properly judge the character of a politician.

In effect, a democratic republic is only as good as its people allow it to be.  In turn, people are only as good as their leaders allow them to be.  It's a vicious cycle.

To a degree, yes.  However, I was referring more to things like gay marriage.  There isn't much of an economic side to that.


Sure there is.  Gay marriage means (amongst other things) employee benefits etc for the new spouse.

Sure there is.  Gay marriage means (amongst other things) employee benefits etc for the new spouse.


A straight guy could marry his buddy so his buddy could get health insurance.  That arrangement would work out fine until one of them wanted to marry for love.
http://www.inthe00s.com/smile/08/rainbow.gif

Anyway, that wouldn't be an issue if we had universal healthcare like a normal country.

Sure there is.  Gay marriage means (amongst other things) employee benefits etc for the new spouse.


True, but the costs of that are far outweighed by the necessity of having consistency of civil rights by sexual orientation.

Sure there is.  Gay marriage means (amongst other things) employee benefits etc for the new spouse.


I work within spitting distance of Silicon Valley.  These companies would be offering those benefits even if not required by state law, because it enables them to attract talent from other states.  At least two of my more productive co-workers wouldn't have moved to the area from if they hadn't been able to cover their partners as domestic partners.

Personally, I don't care for the state getting involved in that sort of thing.  Discrimination in hiring isn't just wrong, it's bad for business, because it means you're hiring the best heterosexual for the job, rather than the best person for the job.  Unless you're in the pr0n business, that's usually a mistake.

Disclaimer: I'd like to see Meg Whitman get the governorship for no reason other than to see her put the whole state up for auction on eBay.  The state is doomed either way.  And because if that's what it takes for the Disposable Heroes of Hiphoprisy to update California Uber Alles, it'll be worth it.

I work within spitting distance of Silicon Valley.  These companies would be offering those benefits even if not required by state law, because it enables them to attract talent from other states.  At least two of my more productive co-workers wouldn't have moved to the area from if they hadn't been able to cover their partners as domestic partners.

Personally, I don't care for the state getting involved in that sort of thing.  Discrimination in hiring isn't just wrong, it's bad for business, because it means you're hiring the best heterosexual for the job, rather than the best person for the job.  Unless you're in the pr0n business, that's usually a mistake.

Disclaimer: I'd like to see Meg Whitman get the governorship for no reason other than to see her put the whole state up for auction on eBay.  The state is doomed either way.  And because if that's what it takes for the Disposable Heroes of Hiphoprisy to update California Uber Alles, it'll be worth it.


Funny, I never can recall doing a hire where we asked if the dude was gay or not.  You mean they have recruiters out looking for gays to import into California? ???

Funny, I never can recall doing a hire where we asked if the dude was gay or not.  You mean they have recruiters out looking for gays to import into California? ???


In Texas, they hand out free plane tickets for gays to GO to California!
:D

In Texas, they hand out free plane tickets for gays to GO to California!
:D


"Only steers and queers come from Texas..."

http://www.youtube.com/watch?v=vyFSdj1J5Vw

;D ;D

  So... where do the cuts have to take place? ???
They should start by purging most of the workers at these health clinics. My girlfriend's best friend works at the main one here in Modesto, and her and her co workers spend all day listening to music and talking about guys while there's a mile long line of people waiting to fill out forms and see a doctor. The state is simply throwing money in a black hole by paying her and the others a salary. Get rid of all these non essential workers. One person can do the job that ten of them do.

They should start by purging most of the workers at these health clinics. My girlfriend's best friend works at the main one here in Modesto, and her and her co workers spend all day listening to music and talking about guys while there's a mile long line of people waiting to fill out forms and see a doctor. The state is simply throwing money in a black hole by paying her and the others a salary. Get rid of all these non essential workers. One person can do the job that ten of them do.


Good idea.  Then they can go on unemployment and spend all day listening to music and talking about guys!
:)

Funny, I never can recall doing a hire where we asked if the dude was gay or not. 

And you had better not, because doing so is illegal.  I once was asked during an interview if I was married.  The guy got visibly upset when I responded "No, I am a widower, my wife died 6 months ago."

You will never have those kinds of questions asked, because it opens you up big time for a discrimination lawsuit.  The last several jobs I applied for, if such a personal question was asked, I would simply say "That is not on my resume, and has no bearing on my potential for employment here."

And you had better not, because doing so is illegal.  I once was asked during an interview if I was married.  The guy got visibly upset when I responded "No, I am a widower, my wife died 6 months ago."

You will never have those kinds of questions asked, because it opens you up big time for a discrimination lawsuit.  The last several jobs I applied for, if such a personal question was asked, I would simply say "That is not on my resume, and has no bearing on my potential for employment here."


I hear you there.

About 15 years ago I was a senior figure in a sales operation. What I found out was that the worst offenders in asking that sort of question were actually women.  I had some subordinates asking candidates questions like "what does your husband think of you working" or "How you gonna take care of your kids while you are at work".  Our Female Sales VP wanted to turn down a woman for promotion because "she's pregnant and we won't ever see her again".  :o

Man, I had to do some damage control.  Finally I brought ALL of them (including the VP) into a room and reiterated what they had already been advised in our hiring pamphlet that you can't ask that sort of thing.  Crazy.

Very fortunately nobody ever reported these incidents to the EEOC.  If they had, we woulda been dead meat.  :P