This is so weird. I don't understand why CA (and just about every government entity) doesn't just cut programs and stop the spending.
Even with gerrymandered districts, politicians are the most gutless when they have to make a tough financial decision.
Yep. Drives me nuts. You should be PROUD that you stopped spending unnecessary tax dollars. Taxpayers should reward that behavior. Gah. Damn you Toqueville.
It isn't about spending exactly. Trust me, they are making huge cuts in spending. The largest school district in the state has has cut more than 60% from it's headquarters, and every mini-district has cut it's budget and staff in half. Teachers may have to give up one week of work, and are going to have to cut their benefits that they get as well. It's about foreclosures and property tax drops. The old budget was made based on property taxes that they were on record as being due. CA. leads the nation in foreclosures. Once people foreclose they don't pay property taxes. Also because of the housing crash property values have gone done, and so have the property taxes. Spending is being drastically cut. The state just doesn't have enough money. Arnold cut taxes on automobiles when he became governor and that also reduced state revenue. Things are bad here.
Because the governments deal in reality and not anti-tax conservative or libertarian dogma. Folks want these services. Though politicians take the easy way out and pretend that they can have tax cuts and provide service while only cutting government waste it is not possible.
Don't tell Obama he's a libertarian, then....because he's made it pretty clear he aims to clean up govt waste AND cut taxes.
I find it hard to put all the blame on the politicians when these "folks" want services without paying for them. Solution? Codify a balanced budget. Force the state/fed to raise taxes or cut programs until it balances out. I suspect, but could not prove, that most folks would then suddenly not want the majority of these "services".
I thought the main reason was that property taxes in CA never really kept up with prices. Isn't CA's property tax system locked into the selling price of the house, not the current Fair Market Value? Also, the real estate bust there HAS affected tax revenues, not to mention they are hemmoraging higher paying jobs to less expensive and more business friendly states.
I believe all states are legally required to have a balanced budget. But there are all sorts of ways to get around it by reclassifying things or issuing long-term debt or whatnot. As FB mentioned, I think they've been cutting services (and raising various small taxes) for the past year or two, but forecasts keep shifting on them and their revenues keep coming in below expectations.
He also plans to raise some taxeon folks who make more than $250,000 per year. I don't believe he has pretended that just cutting taxes and eliminating government waste is sufficient.
Then get rid of the loopholes. This ain't rocket science - try hard not to spend more than you get. (Yes, I understand that CA and many other states have a greatly exacerbated problem, I was speaking far more generically than intended)
Two separate problems here: 1. The "loopholes" aren't always really loopholes. They are there for a purpose because allocating money is different for short term things vs. long term things, etc. 2. The bigger problem here is that budgets are done yearly - but things are changing much faster than that. So they may have had a balanced budget as of 6 months ago, but then revenues didn't keep pace. Over the long haul, all the states maintain balanced budgets. They are much more fiscally sound than the federal government - mainly because they can't print their own money. The problem is that you can't just slash programs left and right for short-term severe blips. Nor can you build a reasonable budget planning for a a once-in-a-lifetime financial crisis. Many of the social welfare programs have probably skyrocketed in cost - you can't just eliminate them or you could exacerbate the problem and make it even worse a few months from now.
You also shouldn't make budget increases year after year assuming the tax revenue will always be there, this has driven the cost of some government programs to insane levels. Here in Massachusetts, we have at least a 1.5 billion budget deficit, yet we are building a brand new high school for 200+ million dollars. 200 million for a single high school, no wonder we are broke.
This is absolutely true - and hopefully going forward when we get out of this mess, states will better budget. I know Texas has some kind of rainy day fund to help with things like that. The other problem though is what we saw with the federal government in 2000. If the state is consistently bringing in more revenues than they are spending, then there's a temptation/demand to cut taxes. Which is fine - but then you go back to spending as much as you bring in. And then when you have the inevitable downturn, you're still left in the same boat where you either have to cut more spending or raise taxes. In that scenario, raising taxes is more possible since you lowered them earlier, but it's going to be politically unpopular and it could still exacerbate the problem. In principle, though - I do agree and hope this will be a wakeup call for states that got out of control with their spending.
