Surprise, California! Budget Deficit 25 Percent Worse Than a Month Ago

Phantom cuts, bad projections, budget process complications added by initiatives voted in this month are to blame for why an extra $6 billion in deficit spending is discovered about a month after an already bleeding red budget passed--months late. (And of course, blame a state political establishment that just spends way, way, way more than they should.) Links, quotes, details at my California news and politics blog "City of Angles."

Matt Welch talked California's fiscal profligacy on Fox Business Channel earlier this week.

Comments

[TallDave]

At this point I think most Californians see the deficit as something distant and unimportant that only stupid people worry about, like Jesus.

[bohica]

Jesus was a stupid person who worried about the deficit?

[Banjos Kick Ass!]

And money changers!

[Aresen]

The thought of a federal bailout for California...

...makes me very glad I am a Canadian.

[John Thacker]

Oh, like it's that different from Canada's equalization payments.

[Episiarch]

...makes me literally angry with rage. If I have to pay for the fucking Californians, I am going to find Lex Luthor and warn him that Miss Teschmacher is going to free Superman from the Kryptonite and foil his plans to dump California into the ocean.

[sevo]

"Schwarzenegger and lawmakers had counted on receiving a total of about $5.3 billion in federal money in the current fiscal year."
Looks like they'll only get $1.8B; Pelosi's 'charm' is wearing off.
http://www.sfgate.com/cgi-bin/.....&tsp=1

[BakedPenguin]

I would be willing to cut them some slack if they had voted for Prop 19. As it stands, I say give the fucking place back to Mexico before bailing it out.

[cynical]

"My opponent wanted to cede US territory to Mexicans, and then bail them out with your hard earned tax dollars".

Yeah, I think they should pay us. The territory is nice, and they can kick out all the gringos (so long as they don't send them to the U.S.). Plus, we'd just invade otherwise. We're kinda dicks about people bailing on the states and taking the land with them.

[BakedPenguin]

Yeah, I phrased that poorly. "Instead of" rather than "before."

[Almanian]

Would it helped if San Francisco passed a law TAXING circumcisions instead of banning them?

Just trying to help...

[BlueBook]

So the state would take a cut of the cuts in lieu of cutting the budget?

[wylie]

Owww! That comment cut me. You better have a license.

[BlogDog]

You're making a mountain out of a mohel hill.

[Irresponsible Hater]

It's a write off!

[Tman]

We must nuke it from Orbit. It's the only way to be sure.

[wylie]

Can't NASA just fire up the Earthquake ray?

[Space Monkey]

It's too late the rest of us are already infected.

[sevo]

You ain't seen nothing yet! Just wait'll Moonbeam gets his hands on the levers! There's probably two or three unions that don't yet have a license to steal.

[Apologetic California]

You know in my conversations with libtards, the typical riposte when pointing the craptacular state of California's economy and finance is something along the lines of "Well, California is like the 6th (5th, 4th, 8th, really varies by libtard) largest economy in the world (or America, again, libtard-dependent)." I never really understood why that's a defense, since it just emphasizes how sad California's finances are that it's broke even though it's got a shitload of money.

[sevo]

What I usually get is "Repeal Prop 13!"
As if the added taxes on the 1-2% of the properties that haven't changed hand since 1979 would make a difference.

[West Coaster]

Actually, Prop 13 still applies to all property. The only time property taxes can adjust to match the home's (higher) assessed value is when the property changes hands. While it's in the same hands, the max increase in taxes can only be 2%. I've been living in the same house since 1992 (purchased for $129 K). Even though the house's assessed value during the mid-aughts was over $300 K, my taxes were only based on a value of about $150 K. The 2% max adjustment doesn't apply to decreasing values. A good friend purchased a house near mine in the mid-aughts. His house has lost close to 40% of its value and his taxes have adjusted accordingly.

[Apologetic California]

Property taxes can also increase in California if the voters approve it. My parents taxes for example have gone up past Prop. 13 caps since LA County in the past decade and a half have voted for a gillion bonds and special assessements.

[Tman]

Exactly. China has an enormous economy, but it also has 16 of the 20 worst polluted cities in the world in terms of air quality.

(source - http://www.worstpolluted.org/p.....display/22)

Just because you're "big" doesn't automatically mean you're "good".

[John Thacker]

They then follow it up with complaining about how they may pay more in taxes collectively than they get back.

To which I respond with "Then why doesn't your state stop electing federal politicians who are in favor from redistributing from the rich to the poor? You have a lot of rich people and a high cost of living. The federal redistribution largely isn't on a state-by-state basis, it's on an individual basis. Want to keep more money in California? Support the Bush tax cuts!"

[fishfry]

How can I be overdrawn? I still have checks left!!

[wylie]

It's because you're not as cool as Ben "Bitchin'" Bernake.

[BakedPenguin]

I once dated a girl who said this non-jokingly.

It wasn't her brains I was interested in.

[Barbarian #3]

She doesn't have to talk for what I want to do with her.

[BakedPenguin]

In my defense, I was 19 at the time.

[Michael S. Langston]

It still amazes me that anyone listens to government projections in the first place.... especially now, since every single projection WH economists have made has been wrong (maybe some believe CA economists to be smarter, but I doubt it).

But even if they did turn out to be right over the past two years, economics has never been a very good predictive science. There's an argument here about how the Austrian school of thought might better predict, but all the "economic" news we ever receive, is by design and by definition after the fact.

Meh... but what do I know. Maybe it's easier to not read, not pay attention, and just believe it all.

[Tman]

Victor Hanson gets to the heart of the Cali-problems pretty well in this essay-

http://pajamasmedia.com/victor.....california's-rock-and-hard-place/

Gut-check Time

So we do not have much wiggle room left, especially when we vote for more of the sources of the problem and you in the other 49 states do not like loaning us $40 million a day just for our quite generous unemployment insurance in a very high-unemployment state. There are only so many gimmicks left. Either our Governor-elect and veteran liberal Jerry Brown will have to do a Nixon to China, or the Republican House will have to let us go broke and cut off the cash. Either way, it should be an interesting ride ? perhaps a panic of 1893, Great Depression, 1970s stagflation, and 1992 state meltdown all in one surreal experience.

[Almanian]

President Ford US Congress to NY Cali- Drop Dead

And people say the 70's had no redeeming qualities. OK, well, they didn't, but that was a cool event.

[Arizona Doper]

Off Topic: AZ medical marijuana proposition is now up by over 4000 votes with 57000 mostly provisional ballots to be counted.

This was an almost 5000 vote swing today. Looks like this phatty is gonna puff, puff, pass.

[Colin]

If you like this budget, Wait till the next one, which can be passed on majority vote.

The only solace will be seeing Brown come to DC begging and getting the old Gerald Ford treatment.

[Cali resident]

It's all ok, there's still plenty of wealth to loot. I have a little money in the bank and a 401K. They'll keep trying to get their hands on it. They really need to keep the public-employee pension plan afloat.

[Apologetic California]

Not that easy, in the same election CA voters this year made it easy to pass a budget, they also made fees and taxes require a 2/3rds vote. "Fees" were the typical Democrat runaround taxes, but this time, the voters got smart. And got dumb by selecting Democrats regardless of competency, i.e., Kamala Harris as AG.

[John Thacker]

Yes, but I fully expect some California court to decide that the "notwithstanding clause" of the "a majority can pass a budget" proposition will be interpreted to say that they can raise taxes and fees in an emergency.

[Bob Smith]

Sounds like the Supreme Court of Washington State, who keeps ruling that constitutional amendments to limit the state legislature's spending are unconstitutional. They finally put a stop to any hope of reigning in the legislature by ruling that, because revenue limits affect more than one tax, such ballot measures are unconstitutional because they run afoul of the state's "single issue" rule for ballot measures. In other words, you must limit each and every possible tax, fee, and duty individually, one per ballot measure.

[Apologetic California]

Unlikely. The CA SC is all Republican except one. I can only think of one time that they overturned a voter approved proposition (the gay marriage one). Prop. 13 was challenged in the CA SC and the SC all turned away such challenges.

[John Thacker]

Unfortunately, I disagree. My understanding of the budget proposition is that it adds the following clause:

(e) (1) Notwithstanding any other provision of law or of this Constitution, the budget bill and other bills providing for appropriations related to the budget bill may be passed in each house by rollcall vote entered in the journal, a majority of the membership concurring, to take effect immediately upon being signed by the Governor or upon a date specified in the legislation. Nothing in this subdivision shall affect the vote requirement for appropriations for the public schools contained in subdivision (d) of this section and in subdivision (b) of Section 8 of this article.

I'm going off of here.

Reading that "Notwithstanding any other provision of law or of this Constitution," I think that the two-thirds requirement would be waived for passing a budget. Prop 25 specifically includes a part saying that the notwithstanding doesn't apply to the educational spending part, but doesn't say anything about the taxes.

There has been disagreement in the courts about whether the effect of the notwithstanding clause:

On August 5, 2010, a Superior Court judge ruled that Prop 25 did not maintain the 2/3rds requirement to raise taxes, but the Superior Court's decision was reversed by the California 3rd District Court of Appeals on August 9, 2010, allowing the ballot language to remain intact.

I stand by my assertion that budgets that include tax and/or fee increases will be adopted by a simple majority vote after litigation.

[John Thacker]

Prop 25 does mention the tax requirement in a separate subdivision from the notwithstanding clause, but it's not in the same subdivision as the notwithstanding clause, and the "Notwithstanding any other provision of law or of this Constitution" thus makes it irrelevant.

Grammatically, I think that the Proposition clearly eliminates the two-thirds requirement for raising taxes and fees, so long as it's part of passing the budget. Politically, such a ruling might be disastrous and cause a backlash, but legally, I think you got played.

The donors for the various sides of the proposition only strengthens my belief, but is not integral to it.

[John Thacker]

They don't have to overturn the proposition. They simply have to read the proposition as written, and the two-thirds requirements are eliminated for passing the budget bill.

To me, that seems like the plain reading of the notwithstanding clause.

[sevo]

It also turns out that the 'savings' from Obamacare may cause a bit more of a problem:
"State deficit an obstacle to health care overhaul"
http://www.sfgate.com/cgi-bin/.....1GA25U.DTL

[Somalia]

"The ultimate result of shielding men from the effects of folly, is to fill the world with fools." - Spencer

Exhibit A - California

[Jeffersonian]

No, that isn't Somalia getting its shit together, that was me.

[juris imprudent]

I don't know, there is a certain je n'est-ce pas in getting lectured about failed statedom by Somalia.

[John Thacker]

Also, surprise California, but government loans don't make the unprofitable profitable, even when talking about "green jobs."

Nice how they delayed the announcement until after polls closed. Wouldn't want reality to intrude on Proposition 23.

I have otherwise intelligent co-workers who think that if China is massively subsidizing green tech, then that's ipso facto argument for the US to do so as well. No, to the degree something is subsidized by another country, that's an argument for you not to subsidize it as well.

[Jeffersonian]

Ultimately, when you start taking massive barrels of cash from the Central State, you will reorganize your business to please the Central State. That may please the functionaries of said State, but don't count on your customers being excited about it.

[mihai]

The problem is that some of us were not yet familiar with the recession and continues to spend money on. These things happen because everything is politicized. They think the medium term, as they are in power. Maybe if we get involved more citizens would be different things.
from used auto sales online

[miart]

The problem is that some of us were not yet familiar with the recession and continues to spend money on. These things happen because everything is politicized. They think the medium term, as they are in power. Maybe if we get involved more citizens would be different things.

[willis]

The problem is that the democrats that have been returned to power are way too conservative. Pull out all the stops. Double the public employees' pay, give them a huge increase in their pension and allow retirement at age 35. Spend like there's no tomorrow guys. You're the last hope of liberals the world over!

[MikeT]

Exactly. If a little bit of union cronyism and big government spending is good, then a lot would be better. The real problem in California is that they don't spend enough on government!

/sarc, just in case

[Terry]

Was one of those budget process complications the election of Gov. Moonbeam?

[jetty]

Whan Kalifornia goes bankrupt, don't look to the rest of the country for a bailout. They have the government that they deserve.

[John]

http://www.kansascity.com/2010.....ni_popular

more police professionalism

Backfires from broken-down van draw bullets from KC police

Read more: http://www.kansascity.com/2010.....z15GcfYKhA

[NaSa]

I cannot wait for California to utterly and miserably fail... or has that happened already?

May be you liberal retards can hike the income tax rate to 99.95% on the top income earners (how do you love that George Clooney ?)

Mr.Boehner is going to give the middle finger salute to the People's Republic of California -could not happen to a nicer bunch of people.

Hey may be the Mexican Government can pitch in, can it ?

[Michael Ejercito]

States whose debt liability per capita is worse than California's: Rhode Island, Illinois, Washington, Delaware, New York, New Jersey, Hawaii,Massachusetts, Connecticut (the last 4 states listed have more than 2X the per capita debt as CA)

States whose pension liability per capita is worse than California's: Minnesota, Wyoming, New Mexico, Hawaii, Colorado, Wisconsin, New Jersey, Illinois, Connecticut, Alaska, Ohio, Rhode Island (the last 4 being 35%-55% greater than CA)

States whose Gross State Product ($Bil) per capita is less than California: All of them!

Source: Forbes, Global Debt Crisis
http://www.forbes.com/lists/20....._Rank.html

[Yeah, but...]

Well, Cali has better weather, too.

[John Thacker]

States whose debt liability per capita is worse than California's: Rhode Island, Illinois, Washington, Delaware, New York, New Jersey, Hawaii, Massachusetts, Connecticut

Hence why Michael Gerson wrote an article called the Blue State budget crisis, I imagine.

States whose Gross State Product ($Bil) per capita is less than California: All of them!

So you agree it would be irresponsible for California to ask for a bailout, then?

However, looking at that table, the Gross State Product label isn't given per capita. Connecticut actually has a higher Gross State Product per capita than California, according to that table, since Connecticut has less than one-tenth the population but more than one-tenth the GSP. There may be others as well, that was just my first guess.

[Bohemond]

I see we wait for the crash, then sell the dump back to Mexico for salvage value.

[Mejico lindo]

that Cali should annex Baja, but now I'm just confused.

[Ebeneezer Scrooge]

There would be more justice in making California buy Mexico for salvage value. Let them impose their rules, requirements, and delusions on all of Mexico.

They'll finally, actually be all the way broke inside two months. Then we can finally, actually see the end of this BS.

Liberals do best when they can pretend the world isn't what it is.

[MikeT]

Well, at least Jerry Brown will get to blame Ahnuld for a year or two while he makes the situation worse. After all, that is the Democrat playbook--when screwing up, blame someone else and demand more money/time.

Who's up for a $100 billion CA state deficit!!!

[Helga]

The Costs of Illegal Immigration to Californians focuses on three specific program areas because those were the costs examined by researchers from the Urban Institute in 1994. Looking at the costs of education, health care and incarceration for illegal aliens in 1994, the Urban Institute estimated that California was subsidizing illegal immigrants to the tune of about $1.1 billion. The enormous rise in the costs of illegal immigrants over the intervening ten years is due to the rapid growth in illegal residents. It is reasonable to expect those costs to continue to soar if action is not taken to turn the tide. It's time to amend 14th amendment and return all illegal aliens to their own country. No more freebies to these lawbreakers.