California's minority-rule budget rules and ridiculous ballot initiative process have made crafting a reasonable budget impossible. Combine that with the slow fuse of the Prop 13 tax time bomb and you've got a disaster on your hands, and there's not much the legislature can do about it.
> ... and there's not much the legislature can do about it.
Spend less.
California has the second highest income tax rate, highest effective overall tax rates, highest sales tax rate, highest tax as a percent of gross income, highest corporate tax rate, highest incorporation fees, highest minimum corporate taxes, highest tax yield per citizen, and highest tax revenues in all of the United States. California gets more money per person in California than any other state, and more total money than any other state.
In plain English: California has gets more money per citizen and more money total than other state in the USA.
Prop 13 (property taxes can't be set above 1%, and aren't reassessed until a home is resold) has kept a lot of middle class and blue collar people in their homes. I'm in California, and my friend's parents are retired. Their modest house tripled or quadrupled in value over the last 15 years. If their property taxes had tripled or quadrupled, they wouldn't have been able to afford their house.
Taxes aren't too low here by any stretch of imagination. It doesn't matter how much money you have if you spend more than that amount of money. That's California's problem.
The people of California figured out how to cut their taxes and increase spending at the same time using ballot initiatives. The Legislature has extremely limited authority to close the budget gap because most of the spending is already set, and the Republican rump won't allow taxes to be raised.
California's taxes as a percentage of income are really not that bad. It's #10 as of 2006:
On my planet Democrats believe in financing government programs responsibly, instead of borrowing money for them like California has done. If the Legislature didn't have to deal with the no-new-taxes Republican rump or the utterly ridiculous ballot initiative-funded programs they would have a lot more leeway to fix the budget without slashing services.
Gov. Arnold is more liberal socially and fiscally than most Midwestern democrats. California is so blue-state that its republicans wouldn't pass as republicans in most other states.
Uhm, this is patently false. California is gerrymandered to hell, there are safe Republican districts which elect some rather far-right representatives, to both national and state legislatures. It's actually very hard to be a moderate Republican in California. You're not right-wing enough to win the Republican districts, and still have the Republican stigma in the Democratic districts. It's only in full statewide elections that being a moderate Republican works, hence the governorship trending mostly that way.
It's actually the far-right Republicans who are part (but not all) of the problem with regards to the budget issues. They are mainly unwilling to compromise, any sort of tax increase is anathema, even the idea of bringing tax rates back to to late-1990s levels.
> Tax revenues are now above those levels (after adjusting for inflation and population growth).
Got a source for that?
> Do you really want to argue that CA isn't spending enough money?
No, where was I saying that? CA has a problem where it's spending money it doesn't have, not that it isn't spending enough. There's certainly plenty of spending cuts that could happen too, but the Republicans and Democrats can't seem to agree on much of that either.
Texas is a model citizen? I have only thing to say to that: oil. Sometimes it seems like Houston doesn't so much have an economy as a local oil-money leak.
> Sometimes it seems like Houston doesn't so much have an economy as a local oil-money leak.
This stereotypical perception of Houston is false, as it does have a diversified economy. For example, it is home of the Texas Medical Center -- the largest medical center in the world. In addition, is also as industrial center for aerospace, as NASA's Johnson Space Center is also located in Houston.
Dude, I don't know if you are from Houston or what, but @stcredzero is right.
I live in the Museum District right outside the Medical Center by Sunset. Yes, I am one of the rich b@$tards behind the gates driving up all of the housing prices inside the 610. I can tell you categorically that the medical center is built on "oil money philanthropy" and bonds. Both of which have taken a hit recently triggering literally thousands of layoffs in the Medical Center. Not to mention a few canceled hospitals . . . yeah I'm looking at you Baylor. US$300 million PISSED away. They're not the only ones though.
The Med Center was supposed to attract higher quality residents to Houston, which it did. The problem is that, because of plentiful finance via the philanthropy of leaders in the energy industry, it was funded without respect to economics or the market. My how times have changed.
You are right about one thing though, there are a lot of little pigs at the government funded trough that is the Johnson Space Center. I normally don't like how much waste they have going on over there on my tax dollars, I mean really, would it be so terrible to share a secretary or administrative assistant? But in times like these I suppose it at least keeps people employed.
In summary, yeah, Houston doesn't have an economy, it has a local oil money leak along with a lot of pigs sucking on the government teat. That will need to change if Houston is to survive economically into the future. The good news is that many local leaders know that oil is the past, not the future, and they are trying to make changes. The bad news is that changing a place like Houston is difficult.
There are a lot of people here who don't see the duplicity in demanding cut throat capitalism, but working at the Med Center or the Johnson Space Center. I have always been reminded of the famous farmer in American literature who is subsidized by the Government to NOT grow corn. Consequently, he would hop out of bed at the crack of noon to ensure that his corn would NOT be grown. Additionally, people would come from miles around to seek his financial advice, as he was a man with an extremely healthy income and was therefore wise. This is a fitting description of Houston.
I worked my way through college at Johnson Space Center. Most people there are paid significantly less than if they were working in the private sector. Most people there have no secretaries or admin assistants, the really important people have an admin assistant that they share with 3-5 other important people.
And I've worked in Houston most of my life and never had anything to do with the oil industry, even peripherally. It's a big city; your experience there isn't general.
There are several thousand people in Detroit whose livelihood is dependent on a company called Caraco Pharmaceuticals. Wonderful company, generic drugs is their business. This fact doesn't change the reality of Detroit's economy. It is still dependent on the car industry.
Just as Houston's is still dependent on the energy sector and government spending. Despite the fact that you may never have had a job that "...had anything to do with the oil industry, even peripherally". Government spending is what put you and a lot of other people through college. As long as this is the case, the future of Houston's economy is precarious.
A lot of people want to move away from oil, and everyone wants the government to stop spending so much money. Houston has to make plans for what's next. Or we are in for some hard times. You too. Your friends won't be able to work their way through college at the JSC, for instance. Or consider that the value of your house will go down. The quality of your schools will suffer, public and private. etc . . . etc . . .
Perhaps my point is better illustrated by having you do a thought experiment. Consider what it is like to live in Detroit, and work for Caraco.
I live right down the street from you (Alabama and Greenbriar) but I wonder if we live in the same city. I moved here from the decaying corpse of St. Louis to take a job with Continental Airlines (HQ'd right here in Houston by the way).
The busses and freeways are packed with people going to work. The bars on Westheimer are overflowing on the weekends. The Galleria is full of shoppers.
Go to St. Louis or Rochester, NY and then come back to Houston. People here are happy I am one of them. No place is perfect but Houston does better than most.
You will note that the people in Iceland are supremely confident in the validity of their economy. We know that this ended badly.
Your post is reminiscent of the comments of the Icelandic people in this series of videos.
PS - The videos offer a very good explanation of something called the "Carry Trade". Pretty interesting in its own right, so I would recommend people view them. They are pretty educational. Especially, now that we know how the story ends. The videos were made about a year prior to the late financial system unpleasantness.
This stereotypical perception of Houston is false, as it does have a diversified economy.
I've lived in Houston longer than I've lived in any one city since I was 13 years old. There is a diversified economy. But a lot of that is here because oil is here.
This article seems to offer absolutely no substance to backup the claim made in the title. If 43 states are having budget shortfalls this includes a significant number of red states. This article would have more value if he broke down those 43 states and analyzed the budget shortfalls. Of course going off on a partisan rant is probably more fun than analyzing boring numbers right?
Saturday's Times had an article on the fiscal troubles of Jefferson County, Alabama. Alabama is rather more disputable ground than much of the US, but its blues don't seem to be of the blue-state sort.
At the local level it's less interesting I think because then you could have a complete economic collapse based on local phenomena (such as a plant closure).
It's at the state level were you can really see the aggregate effects of the competing ideologies.
"But for that to work, he’ll need the nation’s economy to start performing more like Texas."
Well, that's easy. Just discover large quantities of oil and gas under every other state. Texas' relatively good economy has nothing to do with Republican policies and everything to do with a strong energy market. Silly article by a Republican cheerleader.
I have red state blues. Really it is depressing living in Alabama. I have lived in Europe and all over the us. This place by far is the worst. I can go into many reasons, but alas once I finish grad school I shall move elsewhere. For the time being I am a bookworm and a computer addict. Looking at the local newspaper is depressing, racism and anti- progressivism abounds.
28 comments
[ 2.9 ms ] story [ 57.4 ms ] threadCalifornia has had a Republican Governor for over 80% of the last quarter century.
California needs a new constitution.
Spend less.
California has the second highest income tax rate, highest effective overall tax rates, highest sales tax rate, highest tax as a percent of gross income, highest corporate tax rate, highest incorporation fees, highest minimum corporate taxes, highest tax yield per citizen, and highest tax revenues in all of the United States. California gets more money per person in California than any other state, and more total money than any other state.
In plain English: California has gets more money per citizen and more money total than other state in the USA.
Prop 13 (property taxes can't be set above 1%, and aren't reassessed until a home is resold) has kept a lot of middle class and blue collar people in their homes. I'm in California, and my friend's parents are retired. Their modest house tripled or quadrupled in value over the last 15 years. If their property taxes had tripled or quadrupled, they wouldn't have been able to afford their house.
Taxes aren't too low here by any stretch of imagination. It doesn't matter how much money you have if you spend more than that amount of money. That's California's problem.
California's taxes as a percentage of income are really not that bad. It's #10 as of 2006:
http://www.taxadmin.org/fta/rate/06stlrev.html
http://krugman.blogs.nytimes.com/2009/08/03/texas-is-not-the...
You gotta pay for services. If Californians want to have taxes like Arkansas's, they'll have to put up with services like Arkansas's.
Looks like we get to find out!
Oh really? On what planet would the majority Dems want to spend less?
It's actually the far-right Republicans who are part (but not all) of the problem with regards to the budget issues. They are mainly unwilling to compromise, any sort of tax increase is anathema, even the idea of bringing tax rates back to to late-1990s levels.
Tax revenues are now above those levels (after adjusting for inflation and population growth).
I mention revenues because you spend revenues, not rates.
Do you really want to argue that CA isn't spending enough money?
Got a source for that?
> Do you really want to argue that CA isn't spending enough money?
No, where was I saying that? CA has a problem where it's spending money it doesn't have, not that it isn't spending enough. There's certainly plenty of spending cuts that could happen too, but the Republicans and Democrats can't seem to agree on much of that either.
This stereotypical perception of Houston is false, as it does have a diversified economy. For example, it is home of the Texas Medical Center -- the largest medical center in the world. In addition, is also as industrial center for aerospace, as NASA's Johnson Space Center is also located in Houston.
Dude, I don't know if you are from Houston or what, but @stcredzero is right.
I live in the Museum District right outside the Medical Center by Sunset. Yes, I am one of the rich b@$tards behind the gates driving up all of the housing prices inside the 610. I can tell you categorically that the medical center is built on "oil money philanthropy" and bonds. Both of which have taken a hit recently triggering literally thousands of layoffs in the Medical Center. Not to mention a few canceled hospitals . . . yeah I'm looking at you Baylor. US$300 million PISSED away. They're not the only ones though.
The Med Center was supposed to attract higher quality residents to Houston, which it did. The problem is that, because of plentiful finance via the philanthropy of leaders in the energy industry, it was funded without respect to economics or the market. My how times have changed.
You are right about one thing though, there are a lot of little pigs at the government funded trough that is the Johnson Space Center. I normally don't like how much waste they have going on over there on my tax dollars, I mean really, would it be so terrible to share a secretary or administrative assistant? But in times like these I suppose it at least keeps people employed.
In summary, yeah, Houston doesn't have an economy, it has a local oil money leak along with a lot of pigs sucking on the government teat. That will need to change if Houston is to survive economically into the future. The good news is that many local leaders know that oil is the past, not the future, and they are trying to make changes. The bad news is that changing a place like Houston is difficult.
There are a lot of people here who don't see the duplicity in demanding cut throat capitalism, but working at the Med Center or the Johnson Space Center. I have always been reminded of the famous farmer in American literature who is subsidized by the Government to NOT grow corn. Consequently, he would hop out of bed at the crack of noon to ensure that his corn would NOT be grown. Additionally, people would come from miles around to seek his financial advice, as he was a man with an extremely healthy income and was therefore wise. This is a fitting description of Houston.
It is the farmer in a book called Catch-22 by Joseph Heller. You've probably already read this book, if not, yeah, check it out!
And I've worked in Houston most of my life and never had anything to do with the oil industry, even peripherally. It's a big city; your experience there isn't general.
Just as Houston's is still dependent on the energy sector and government spending. Despite the fact that you may never have had a job that "...had anything to do with the oil industry, even peripherally". Government spending is what put you and a lot of other people through college. As long as this is the case, the future of Houston's economy is precarious.
A lot of people want to move away from oil, and everyone wants the government to stop spending so much money. Houston has to make plans for what's next. Or we are in for some hard times. You too. Your friends won't be able to work their way through college at the JSC, for instance. Or consider that the value of your house will go down. The quality of your schools will suffer, public and private. etc . . . etc . . .
Perhaps my point is better illustrated by having you do a thought experiment. Consider what it is like to live in Detroit, and work for Caraco.
The busses and freeways are packed with people going to work. The bars on Westheimer are overflowing on the weekends. The Galleria is full of shoppers.
Go to St. Louis or Rochester, NY and then come back to Houston. People here are happy I am one of them. No place is perfect but Houston does better than most.
That the economy is based on a precarious foundation.
Watch this Money Geyser series of People & Power videos:
http://www.youtube.com/watch?v=JjglR2KYz5o
You will note that the people in Iceland are supremely confident in the validity of their economy. We know that this ended badly.
Your post is reminiscent of the comments of the Icelandic people in this series of videos.
PS - The videos offer a very good explanation of something called the "Carry Trade". Pretty interesting in its own right, so I would recommend people view them. They are pretty educational. Especially, now that we know how the story ends. The videos were made about a year prior to the late financial system unpleasantness.
I've lived in Houston longer than I've lived in any one city since I was 13 years old. There is a diversified economy. But a lot of that is here because oil is here.
It's at the state level were you can really see the aggregate effects of the competing ideologies.
http://www.economist.com/displayStory.cfm?story_id=13990207
A much better piece than this one IMO.
Well, that's easy. Just discover large quantities of oil and gas under every other state. Texas' relatively good economy has nothing to do with Republican policies and everything to do with a strong energy market. Silly article by a Republican cheerleader.