Unemployment payouts push California deeper into debt

[alp227]

Source: Los Angeles Times

Reporting from Sacramento —
California's fund for paying unemployment insurance is broke.

With one in every eight workers out of a job, the state is borrowing billions of dollars from the federal government to pay benefits at the rate of $40 million a day.

The debt, now at $8.6 billion, is expected to reach $10.3 billion for the year, two-thirds greater than last year. Worse, the deficit is projected to hit $13.4 billion by the end of next year and $16 billion in 2012, according to the California Employment Development Department, which runs the program.

Interest on that debt will soon start piling up, forcing the state to come up with a $362-million payment to Washington by the end of next September.

Read more: http://www.latimes.com/news/local/la-fi-jobless-fund-broke-20101107,0,2359412,full.story

[RKP5637]

1. Taxes might help! n/t

[slackmaster]

22. California relies mainly on income taxes for its revenue, therefore the real answer is the creation

...of jobs.

Private-sector jobs.

Yes, tax revenues are needed. But raising taxes on people who already feel financially strained and over-taxed is not going to work.

Californians rejected just about every new tax and tax increase that appeared on our ballots on Tuesday.

[jpgray]

33. When do people not feel financially strained and over-taxed?

I've known people in every bracket, and most everybody feels unduly burdened and over-taxed.

[JDPriestly]

47. The real answer is taxing imports.

And since we gave away our right to do that, the real answer is an increase in sales taxes because that virtually amounts to a sales tax on imports since only maybe one 1 out of 100 non-food items we buy is American made and includes wages to Americans and tax revenue for the American government in its cost.

Regressive or not, the only way we can get private-sector jobs in the U.S. that pay wages high enough to support the basic services our government needs to provide is to have a VAT tax on all consumer goods other than food and maybe children's clothing and shoes.

[xxqqqzme]

52. Yep. corporations accomplished

their mission and got 26 passed. The voters approved 25, dumping the 2/3 budget vote. On the very next line they approved 26 - requiring 2/3 vote to raise taxes.

The budget deal in '08 created tax breaks for corporations that were to expire this year. Now they won't. The California Budget Project has forecast the deficit will increase until 2014.

[Le Taz Hot]

34. Oh, well, now, there's a good idea!

Millions of people out of work, barely making ends meet, and you want to raise our taxes. :crazy:

[RKP5637]

38. There may be no solution without a massive restructuring and a complete shift

in the paradigm for CA revenue. And, as long as jobs go out of the country little will happen.

[niceypoo]

44. Millions out of work because GOP tax cutting has bankrupted the US

...so lets fix it by cutting even more taxes?

America needs to drop this 'tax cuts cure everything' republican madness. The CBO says that tax cuts are the LEAST stimulative thing that can be done to help the economy.

[JDPriestly]

72. Niceypoo, here is how you explain this.

In a situation of high unemployment, taxes should be formulated to provide incentives for the wealthy to invest so as to create jobs.

Thus, tax breaks for the wealthy should be given to those who hire additional employees.

Obama tried to get a bill passed that would provide just such an incentive. I'm not sure whether he actually succeeded. I am under the impression that he did. We need more of that. Let the Bush tax cuts run out and then give a tax break to employers who increase the number of employees they hire or better, the number of hours they employee people.

[JDPriestly]

71. No one will raise the taxes on the people out of work.

But the taxes do need to be raised -- and precisely on those who are making money in their businesses.

People who have a choice between taking their money and buying a boat that is built for the most part outside the U.S. or employing another person in their business to do research and development on new process or products are likely to decide which way to go based on the tax repercussions.

If they know they will pay less tax by hiring another person than by taking their money as profit to buy yet another boat, they will hire someone.

So that is why, in reality, increasing taxes on people who make enough money to seriously invest it, is a good thing provided they will pay a higher tax rate if they don't invest their business's profits back in the money than if they do.

Taxes, like other economic factors, are to a great extent about incentives.

The Republicans are trying to fool us into thinking that people will have more incentive to hire if they pay lower taxes. That is false in most cases. If they can reduce their tax burden by hiring another employee, and hiring another employee is a reasonable thing to do, then they will hire. If hiring employees does not reduce their tax burden and they can take the money they would pay an employee to use for luxuries, then they are likely to just take the money.

That is why we need to let the Bush tax cuts be phased out -- to encourage real investment instead of hoarding or spending money abroad.

[LawnLover]

2. Prop 19

might have helped.

[Taverner]

3. Sacramento please raise my taxes!!!! Seriously!!!!!

I took out unemployment - and I am grateful that benefit is there.

But it is your money, really. You pay for it every paycheck and you expect it to be there when you need it.

[SoCalNative]

6. No we don't pay for it in California

only employers do.

[Taverner]

7. Huh? A small but noticeable chunk is taken out of my paycheck

Every time

[slackmaster]

24. If you are like most working people in CA, you have paid more into the UI system than you have taken

For me it's about 3-4 times as much over my career so far.

What we need is more people paying into the pool.

[JDPriestly]

50. That is the same thing.

The employers could pay the employee more if the employer did not have to pay the unemployment tax. Which party pays the tax is irrelevant. It is only paid because the employee is working.

Unemployment insurance taxes are not paid by an employer unless the employer hires the employee. The unemployment insurance tax just like the FICA tax and other benefits such as pension or 401(K) payments or health insurance are part of the cost of hiring the employee -- and thus, really just a part of the employee's pay.

I used to be the person who chose the insurance and did the budgets for a non-profit. When I saw how much money was paid just to have me as an employee, in my mind I just figured those costs in as a part of my real pay. My take-home pay was less, but I just figured those other costs in. Worker's Compensation is a big cost for employers in California. These expenses are necessary.

In Europe the costs to employers of laying people off are much greater than here. Europeans learned that the cost to their society and economy as a whole that huge lay-offs impose in terms of economic imbalance and economic disruption is much greater than the costs the European governments make employers pay for the support of those they lay off.

We need to recognize that we are making and have made our recession much worse because of our lousy benefits for laid-off employees.

[Taverner]

55. Exactly eom

[slackmaster]

62. Unemployment insurance premiums, at least in California, are NOT TAXES.

They are insurance premiums.

You can't deduct your UI premium payments from either your state or federal income tax.

[slackmaster]

23. Wouldn't it make more sense for the state to adopt policies that encourage the creation of jobs?

You are free to mail in a check to the Franchise Tax Board as a voluntary contribution if you wish, but that really doesn't fix anything (and it would hurt you, not that you necessarily care).

[JDPriestly]

51. If private industry and business could create more jobs, they would.

But private businesses cannot create jobs if there is no demand for their services and goods.

And right now, a high percentage of people do not have enough cash flow to go out and buy services and jobs.
,
My friends who had booming businesses a few years ago are now approaching or actually in bankruptcy.

At the same time, a very small minority of extremely wealthy people, the kinds of people who live in privileged enclaves on the West side of Los Angeles, in Santa Barbara, or in Silicon Valley, are just swimming in money.

That is because the basic problem in our society is that the disparity between the incomes of the rich and poor is too great right now.

If you think of an analogy between the human body and our economic corpus, we are now like a person with an enormous bulge in the top 2% of our body. The top 2% is the top 2% of the wealthy in this counry. The rest of our body dwindles to nothing. That is the bottom 98% in terms of income in our country. Our economic body is shaped like an upside-down pyramid.

Obviously, the smallest part of the pyramid cannot support the heavy top part. That top part is where investment should be coming from. Problem is that it can't invest because the bottom part can't support it if it does. The bottom part cannot produce the demand that the top, investment part needs.

You see, no man is an island. The extremely wealthy can sit on their money as long as they want. But only by sharing it with those who are poorer than they, only by paying the poor decent wages so that the poor can buy the products the investors produce can the economy work.

Economics is the study of exchange, of incentives. It is a social science. Many people think of money as something that has a reality in and of itself. It does not. Money is a symbol for value and a means of exchanging value. You can't sit on money. You can't hoard money. You can only use it to support your life and the lives of others. It is just a symbol for work, for energy, for material things.

If only Republicans could understand how the economy really works, they would realize that a lot of the solutions they propose like getting rid of Social Security or the unemployment benefits will just make things worse because they will reduce demand even more.

[defendandprotect]

4. They need to increase taxes on the wealthy -- and corporations ....

and Governors have to be pressuring Obama to overturn the Reagan and Bush tax cuts

for the wealthy/corporations!!

Pressuring Obama to end the wars which are bankrupting our Treasury!

And cutting out the crap -- like building extensions to our Kabul Embassy = $513 MILLION!!

Let's reclaim the money we're sending to the Catholic Church for their "faith based"

religious organizations -- Obama not only continued that Bush illegality, he's increased the

funding!!

OVERTURN THE TRADE AGREEMENTS -- and create jobs for Americans!!

NATIONALIZE THE OIL INDUSTRY --

REINSTATE NEW DEAL REGULATIONS/RULES ON CAPITALISM --

[Starry Messenger]

5. Tax the fucking billionaires who live there.

California Billionaires

March 10, 2006

Recent reports show that there are at least 100 new billionaires in the world this year, adding to the ever expanding list. Many billionaires reside in California, and are displayed below. Listings include rank, name, age where known, wealth in billions of dollars and source of the money.

A number of billionaires share the same rank because their wealth was reported as being identical to each other.

15. Lawrence Ellison, 61, $16, Oracle

26. Sergey Brin, 32, $12.9, Google

27. Larry Page, 33, $12.8, Google

53. Kirk Kerkorian, 88, $8.7, investments, casinos

63. Sumner Redstone, 82, $7.7, Viacom

103. Eli Broad, 72, $5.9, investments

104. Donald Bren, 73, $5.7, real estate

129. Eric Schmidt, 50, $4.8, Google

140. David Geffen, 63, $4.4, DreamWorks

140. Steven Jobs, 51, $4.4, Apple Computer, Pixar

147. Charles Johnson, 73, $4.3, Franklin Resources

168. David Murdock, 82, $4, investments

168. Charles Schwab, 68, $4, discount stock brokerage

181. Gordon Moore, 77, $3.7, Intel

185. Rupert Johnson Jr., 64, $3.6, Franklin Resources

194. Bradley Hughes, 72, $3.5, Public Storage

194. George Lucas, 61, $3.5, Star Wars

224. Roland Arnall, 67, $3, mortgage banking

240. David Filo, 39, $2.9, Yahoo

240. A. Jerrold Perenchio, 75, $2.9, Univision

245. Haim Saban, 61, $2.8, television

245. Steven Spielberg, 59, $2.8, movies

258. Henry Nicholas III, 46, $2.7, Broadcom

292. Riley Bechtel, 54, $2.5, engineering

292. Stephen Bechtel Jr., 80, $2.5, engineering

292. Barbara Davis and family, 76, $2.5, inheritance, oil

292. George Roberts, 61, $2.5, leveraged buyouts

317. Henry Samueli, 51, $2.4, Broadcom

317. Steven Udvar-Hazy, 60, $2.4, leasing

317. Jerry Yang, 37, $2.4, Yahoo

335. Ronald Burkle, 53, $2.3, investments

350. Gordon Getty, 73, $2.2, inheritance, oil

365. Alfred Mann, 80, $2.1, inventor, entrepreneur

365. Ernest Rady, 68, $2.1, banking, insurance

382. Charles Brandes, 63, $2, money management

382. William Hearst III, 56, $2, Hearst Corp

382. Michael Milken, 59, $2, investments

382. John Sobrato, 66, $2, real estate

410. Phoebe Hearst Cooke, 79, $1.9, Hearst Corp

410. Louis Gonda, 57, $1.9, leasing

410. David Hearst Jr., 60, $1.9, Hearst Corp

410. George Hearst Jr., 78, $1.9, Hearst Corp

410. Irwin Jacobs, 72, $1.9, Qualcomm

428. Franklin Booth Jr., 83, $1.8, Berkshire Hathaway

428. Margaret Cargill, 86, $1.8, inheritance

428. Jess Jackson, 76, $1.8, Kendall-Jackson

451. Tom Gores, 41, $1.7, leveraged buyouts

451. Anthony Pritzker, 45, $1.7, hotels, investments

451. Daniel Pritzker, 47, $1.7, hotels, investments

451. John Pritzker, 53, $1.7, hotels, investments

486. Ray Dolby, 73, $1.6, Dolby Laboratories

486. Thomas Siebel, 53, $1.6, Siebel Systems

486. Patrick Soon-Shiong, 54, $1.6, generic drugs

486. Elizabeth Wiskemann, $1.6, mutual funds

512. Archie Aldis (Red) Emmerson, 76, $1.5, timberland, lumber mills

512. Charles Munger, 82, $1.5, Berkshire Hathaway

512. Kavitark Shriram, 50, $1.5, Google

512. Margaret Whitman, 49, $1.5, Ebay

562. John Anderson, 88, $1.4, investments

562. George Argyros, 69, $1.4, investments

562. Robert Day, 61, $1.4, money management

562. Leslie Gonda, 85, $1.4, International Lease Finance

562. Ming Hsieh, 50, $1.4, Cogent Systems

606. John J. Fisher, 44, $1.3, Gap

606. Robert Fisher, 52, $1.3, Gap

606. William Fisher, 48, $1.3, Gap

606. Alec Gores, 53, $1.3, leveraged buyouts

606. Gary Michelson, 57, $1.3, medical patents

606. John Morgridge, 72, $1.3, Cisco

606. Alexander Spanos, 82, $1.3, real estate

645. Carl Berg, 68, $1.2, real estate

645. Timothy Blixseth, 55, $1.2, timber, real estate

645. Alan Casden, 60, $1.2, real estate

645. Scott Cook, 53, $1.2, Intuit

645. David Copley, 54, $1.2, newspapers

645. Roy Disney, 76, $1.2, Walt Disney

645. Ernest Gallo, 97, $1.2, wine

645. Herbert Sandler, 74, $1.2, banking

645. Theodore Waitt, 43, $1.2, Gateway

698. John Arrillaga, 68, $1.1, real estate

698. Kenneth Fisher, 55, $1.1, money management

698. William Gross, 61, $1.1, bonds

698. George Joseph, 84, $1.1, insurance

698. Robert Naify, 84, $1.1, movie theaters

698. Richard Peery, 65, $1.1, real estate

698. Edward Roski Jr., 67, $1.1, real estate

698. Marion Sandler, 75, $1.1, banking

698. Joyce Raley Teel, 76, $1.1, supermarkets

746. L. Doerr, 55, $1, venture capital

746. William Hilton, 78, $1, hotels, casinos

746. Bernard Osher, 78, $1, banking, investments

[-..__...]

9. Brilliant idea!

Reduce the income tax base by motivating those people to change their state of residence to one that would welcome them with open arms.

:eyes:

[fasttense]

39. Brilliant idea

allow the uber wealthy to blackmail a state.

The uber rich don't just live in one place anyway.

Do you honestly believe the majority of the uber rich choose their 1st homes, or 2nd or even 3rd based upon the taxes they pay? NO, as everyone knows, they chose their many, many, many homes based on 3 things. Location, location, location.

Taxes may come into to play on their 12th or 13th home.

[JDPriestly]

54. A series of Republican governors have entered office vowing to cut the

fat in the California budget. They decimated our universities, privatized many services, upped our fees on everything and cut back on services. The "fat" they cut raised the cost of living in California for all residents form the poorest to the richest. But did they come anywhere near balancing the budget? No. As a state, our once flourishing economy declined as they slashed at services and destroyed our institutions.

Here is the list of California governors and their affiliations:

http://en.wikipedia.org/wiki/List_of_Governors_of_California

Since 1967, we have had a total of 12 years under Democratic governors and 31 years under Republican ones.

Once again, Meg Whitman ran on the Republican mantra of lower taxes. She was resoundingly rejected. We Californians have heard this "cut taxes" meme once too many times. It has not worked for us.

Californians voted to reduce the percentage of votes it will take the state legislature to pass a budget.

Jerry Brown did not promise lower taxes. He said he would cut excess expenditures, but I think we all know that Jerry Brown is going to ask Californians, especially the most prosperous to pull together as a society.

And, yes, I think that we in California would be better off without the very wealthy if the very wealthy do not want to pull their weight and help their neighbors.

The super-wealthy drive up property prices and the cost of living for the rest of us. They take up a lot of space compared to ordinary people. They use a lot of resources. For example, they use airport services more than the rest of us. We eat potato salad. They eat caviar. We are a lot cheaper to support.

California's greatest asset is its climate, its sunshine and fair weather. Our beaches are also a huge asset. Those assets will always draw wealthy people. But when they get here, they had better know that they will be expected to give back to our state. It's a deal, fair and square.

We all feel privileged to live in California. In my neighborhood, we help each other out. We know each other, and we help each other out. We expect all of our neighbors, even those on the other side of town to do the same. So, if the wealthy do not want to live in California on our terms, let them go live in Maine or New York where they can't walk on the beach and enjoy the sunshine all winter long.

[dkf]

10. How much they own is irrelevant to taxes. The question is how much do they earn

[Starry Messenger]

12. They probably earn a shitload. That's how they stay billionaires.

And "what they own" is not irrelevant to taxes, especially if they have property.

[dkf]

13. Depends how they allocated their investments.

I doubt their principal residence is worth much more than $20 million which isn't much compared to a billion in assets.

[Starry Messenger]

15. And you would be wrong.

Here's just one example. http://www.forbes.com/2003/09/18/cx_bs_0918home400.html


"That is certainly the approach that Oracle (nasdaq: ORCL - news - people ) Chairman and Chief Executive Larry Ellison takes; the ninth richest person in the U.S. could choose to live any way he likes--and he does. A devotee of Japanese martial arts, Ellison has constructed a Japanese-style imperial villa that includes 500 mature cherry, maple, ginkgo and other trees; it cost an estimated $100 million to build"

[dkf]

17. Funny you mention Ellisons house...

$3 million tax cut on Larry Ellison's estate
County OKs his appeal based on falling value of his sprawling 23-acre estate in Woodside
March 27, 2008|By James Temple, Chronicle Staff Writer


Larry Ellison, ranked 12th on the Forbes 500 list with a net worth of $25 billion, has bagged a $3 million tax break after arguing that his flamboyant Japanese-style estate in Woodside is functionally obsolete.

The chief executive officer of software giant Oracle Corp. will be paid from San Mateo County property taxes collected this year, which otherwise would have gone to schools, the county general fund and cities, among other things, Deputy Controller Kanchan Charan said. The hit to schools alone will be nearly $1.4 million.

http://articles.sfgate.com/2008-03-27/news/17169190_1_property-taxes-appeals-board-luxury-homes

[Starry Messenger]

18. And?

That's what I'm talking about. They keep getting their taxes lowered. His action deprived local schools of badly needed funds as it clearly states in the article. He argued that no one wanted to buy a Japanese palace, so it had "lowered in value".

That's only one of his several properties around the state by the way. Keep digging, I'm sure you'll find a pony. :hi:

[dkf]

20. I was the one arguing principal residences weren't a substantial part of these assets

And that beyond that the ability to tax assets is limited to real estate the percentage of which will depend on how their holdings are allocated.

[Starry Messenger]

21. You were the one saying they were $20 million dollar homes

You are incorrect. I live here. $20 million dollars are movie star homes. They would be sheds to the billionaires. Next time check your facts.

[RainDog]

32. why should people who have made their billions just be able to abscond, anyway?

I mean, the state of CA has been the home to these folks, has provided them with cheap labor, has no doubt extended tax cuts for various industries - and is it too much to ask the wealthy to, say, sacrifice a home or a private island for the well being of the state that they've called home?

do they breathe such rarefied air of privilege that they are above such foolish sentiments?

F. Scott Fitzgerald had their number before the '29 crash.

"Let me tell you about the very rich. They are different from you and me. They possess and enjoy early, and it does something to them, makes them soft where we are hard, and cynical where we are trustful, in a way that, unless you were born rich, it is very difficult to understand. They think, deep in their hearts, that they are better than we are because we had to discover the compensations and refuges of life for ourselves. Even when they enter deep into our world or sink below us, they still think that they are better than we are. They are different." Rich Boy, 1925

[Starry Messenger]

41. Evidently they are!

That's the funny think about this subthread, this is actually a topic that I follow very closely. There is a reason that this state is home to many of America's billionaires. Our tax situation is very favorable to them.

[slackmaster]

27. The tax code of the state is designed to rely mainly on income taxes

Prop. 13 puts property taxes low on the food chain.

More income means more taxes.

More people working would help both sides of the ledger on UI.

[JDPriestly]

57. The rich don't take so much personal income tax.

The corporations they own earn the taxes and pass on to the rich what the rich want to give themselves. So, they can actually limit their annual incomes.

If you notice, a lot of big CEOs get huge pay-outs in stock when they leave their companies. That is how they really take their pay -- in stock options. I don't know how much tax they pay on the money they get for their stocks and stock options after they have held them for some years prior to leaving their companies.

Perhaps someone else could explain how this really works. I think I am noticing this phenomenon but not really understanding it.

[slackmaster]

63. Then "taxing the rich" would have limited value

We need more private-sector JOBS.

I'm not seeing much enthusiasm for that on this forum. Strange.

[JDPriestly]

73. My friends who had businesses and employed people had to

lay off their employees in several cases. It was heartbreaking for my friends because they had small businesses and were close to their employees.

I don't think that the private sector can jump-start the economy without a lot of help. The big corporations are not interested in hiring Americans. They want the cheap foreign labor, labor that works in non-dollar countries. I don't think that the private sector can find its way to prosperity without a lot of government help. We need major investment in innovation and rebuilding infrastructurre in order to attract the business investment that will mean jobs in the future.

For example, our children need to be learning science as well as how to communicate and work together,

And if we are to produce products that are competitive in the world markets, we must educate our children in the arts. Having lived in several other countries, I am sorry to say that Americans have relatively little aesthetic sense. That is one of the reasons that our products do not sell as well as some made in other countries.

[JDPriestly]

56. How much you own is relevant to property taxes.

It would also be relevant to estate taxes if we had large enough estate taxes to matter to the very wealthy.

[Better Today]

8. Excuse me, the banks are getting nearly 0% interest and the States aren't??? WTF!

'nuff said.

[Skittles]

11. how's that offshoring working out for ya?

[ProgressiveLiberal]

16. You got that right!

In the late 90's Oracle, HP and Microsoft spent literally hundreds of millions of dollars to lobby state legislatures to hire H1B visa workers, primarily from Russian and India , at a fraction of the cost (and no benefits) of U.S. workers.

My industry (I.T.) wages went into the toilet and by 2005 wages across the board for for U.S. infotech workers had been reduced to 30% -50% of what they were in 1998 along with massive unemployment.

Now I am on California unemployment and haven't paid state taxes for YEARS because I haven't been able to hold a decent job for years.

How's that working for 'ya NOW California legislature? Looks like we're both broke now.

By the way - I am now living out of state and will be job hunting in other states. I have NO desire to move back to California if I don't have to.

[slackmaster]

29. It wasn't just big companies doing that. I've worked in IT at small and medium sized corps.

They're doing the same thing.

[slackmaster]

28. Offshoring is part of the problem, so is companies moving to other states

Or not coming to California in the first place because of its business-unfriendly environment and high cost of living.

[4lbs]

14. The entire CA debt can be fully paid off in 3 years, along with fully financing public education

(including free college tuition/fees for ALL California resident students at CSU and UC universities), and increase the funding to K-12 public schools, just by going to single-payer health care, like the SB810 bill that was vetoed by Ahhhnuld.

It's estimated that single-payer would save CA $8 billion in the first year, and about $12 billion to $15 billion per year by year 3.

[dkf]

19. How did Brown campaign on this issue?

[LooseWilly]

30. He didn't.

Not a word.

[slackmaster]

26. Brown ran a brilliant campaign

Far more effective than Senator Boxer's IMO.

He repeatedly declined to comment on potential legislation until it is put before him. That kept him from painting himself into a corner on anything.

When Senator Boxer spoke about the need for more jobs, she usually ended up talking about expanding the public sector. I think that was a mistake that could have cost her the election, if not for her opponent's overwhelming negatives. Jerry Brown spoke often and loudly about "green" jobs and other private-sector opportunities.

[David__77]

36. Huh? Whitman's negatives were greater than Fiorina's.

And Boxer performed nearly as well as Brown, relatively speaking. Not too bad for a three term senator in the current environment. The public sector does need to expand, and badly. The private sector depends on precisely that happening.

[slackmaster]

42. Let's look at reasons why a group of small business owners rated CA as 49th in business-friendliness

I know this is a Republican source, but sometimes you have to go there to get the answers you need.



...The index is created each year by the advocacy group Small Business and Entrepreneurship Council and covers 36 major government-imposed or -related costs affecting business. Among the measures:

Personal, corporate and capital gains taxes
Crime rate
Health insurance mandates
Taxes on gasoline, property and sales
Utility costs
State and local government spending trends and rankings

These taxes and policies impact where people live and work, the report says. In this decade, the 25 friendliest states have had population growth averaging 10.3% and the bottom 25 have growth of 5.6%.

“Policy matters. Most politicians talk a good game when it comes to small business, but their actions don’t often match their rhetoric,” said Raymond Keating, SBE Council’s chief economist and author of the study. “The Small Business Survival Index gets at the public policy costs and trends that affect – directly or indirectly – entrepreneurship and small businesses. These measures should matter to everyone because small businesses, of course, drive innovation, economic growth and job creation.”

If it weren’t for New Jersey, California would be the least friendly state for small businesses....

Source: http://jan.ocregister.com/2009/12/02/califoria-49th-in-business-friendly-policies-taxes/26615/

With the possible exception of "crime rates", I don't see anything on that list crying out for an expanded PUBLIC sector. Maybe businesses would come here if we legalized marijuana, taxed it, and used the revenue to hire an army of new cops to enforce the tax codes. But unless some specific expansion of the public sector is specifically designed to create an environment friendly to the exansion of the private sector, all such an expansion is going to accomplish is to make the deficit worse.

Our tax system is structured to rely heavily on income taxes, both personal and corporate. The only ways to increase that revenue are to increase tax rates, and to get more people working here.

[David__77]

45. I disagree with the assumptions implicit in this laundry list.

California does have relatively high energy prices. Why? Because there isn't enough generation. So build a few nuclear power plants.

But, fundamentally, I don't accept the premises in this laundry list. What about the presence of human capital? I know that, in my relatively specialized field, we are clustered on the coasts and I'm not even aware of the presence of counterparts/competitors in these "business-friendly" states.

You could also make a GLOBAL map similar to the one above, premised on the same assumptions/criteria. Of course, some developing countries would be "business friendly" compared with the US. But does that mean that US policies should be designed to create a "race to the bottom?" California, my state, opts for something else, and many of us appreciate that.

[slackmaster]

49. I'm not familiar with the term "human capital"

Does that refer to all the unemployed people who would like to be working, if only jobs were available?

Why do you think California is regarded as unfriendly to small business? Or are you rejecting the whole thing out of hand?

But does that mean that US policies should be designed to create a "race to the bottom?" California, my state, opts for something else, and many of us appreciate that.

I'm not sure you are are seeing, but I see a state that is winning the race to the bottom.

[JDPriestly]

74. Nuclear energy is not a realistic solution in much of California

because of all the earthquake activity. There are areas with no earthquake faults or at least no known ones, but even they can feel the impact of a strong earthquake at times.

[Name removed]

53. Deleted message

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[slackmaster]

61. If you have a more suitable source for explaining California's perceived business-unfriendliness,

Please post it. It seems to me that a group of business owners is a pretty reasonable source for an answer to that very important question. But if you want to wear blinders and pretend that California's financial situation can be fixed in a way that doesn't include the creation of lots of new private-sector jobs, that's your prerogative.

The Astute Reader(TM) will note that the response above does not in any way address the content of my reply.

[JDPriestly]

58. Gasoline is expensive here because we have special problems

with air pollution. Here in L.A. we are in a basin surrounded on a couple of sides by mountains. The pollution can easily just settle right on us.

I remember first visiting L.A. in the late 1960s. I wore contact lenses and cried much of the time we were here due to the air pollution, the smog.

Thanks to California's stricter laws to prevent pollution, the air is somewhat better. But the expensive gasoline raises the cost of doing business and living here.

Green energy will help attract businesses to our state and make the state more livable.

[slackmaster]

60. Yes, green energy jobs are likely to be part of our future

Private-sector jobs creating and developing green energy technologies.

[JDPriestly]

66. Actually, in our history, the private sector has always needed a big,

big boost from the government in order to get going in a new field.

Remember the Tennessee Valley Authority?

President Franklin Delano Roosevelt signed the Tennessee Valley Authority Act (ch. 32, 48 Stat. 58, codified as amended at 16 U.S.C. § 831, et seq.), creating TVA on May 18, 1933.

As a supplier of electric power, the agency was given authority to enter into long-term (20 years) contracts for the sale of power to government agencies and private entities, to construct electric power transmission lines to areas not otherwise supplied and to establish rules and regulations for electricity retailing and distribution. TVA is thus both a power supplier and a regulatory agency.

Today, TVA is the nation's largest public power company, providing electric power to over nine million customers in the Tennessee Valley. It acts primarily as an electric power wholesaler, selling to 156 retail power distributors and 56 directly served industrial or government customers. Power comes from dams providing hydroelectric power, fossil fuel plants, nuclear power plants, combustion turbines, wind turbines and solar panels.

http://en.wikipedia.org/wiki/Tennessee_Valley_Authority

Then, if you want to go really far back, the State of New York funded the start-up of the Erie Canal.

Bringing the Erie Canal to fruition involved the support and labor of people from all strata of society. DeWitt Clinton, a leading New York politician, would become the most persistent advocate for the canal in the years after the War of 1812. Critics derided the proposed canal as "Clinton's Big Ditch." Because the longest canal in the United States was just over 27 miles long, the prospect of a 363-mile canal seemed hopelessly impractical to even some enlightened minds. Only four feet deep and forty feet wide, the original canal could in fact seem like little more than a ditch. Refused funding by the federal government, the State of New York, after much political wrangling, authorized initial funding for the Erie Canal in 1817.

http://www.answers.com/topic/erie-canal

Generally, in the U.S. new technology and big schemes need a boost from the government in order to become economically feasible.

Here is another example:

Hoover Dam, once known as Boulder Dam, is a concrete arch-gravity dam in the Black Canyon of the Colorado River, on the border between the US states of Arizona and Nevada. It was constructed between 1931 and 1936 during the Great Depression, and was dedicated on September 30, 1935, by President Franklin Roosevelt. Its construction was the result of a massive effort involving thousands of workers, and cost over one hundred lives.

http://en.wikipedia.org/wiki/Hoover_Dam

And, of course, our nuclear industry got its start thanks to government research on nuclear energy. And I believe that the government limits the liability of nuclear facilities, thus insuring that in case of a catastrophe to human life, the government will pick up the tab. That, too, is a subsidy of considerable importance.

[slackmaster]

67. I'm not saying that a boost from government isn't needed or helpful

But ultimately most of the jobs that end up being created, and the economic benefits that come from those jobs, including tax revenue for the state, will be in the private sector.

[JDPriestly]

68. It depends. Every government building in Southern California should

have solar panels. That would set an example for private companies. As I said in an earlier post, Californians want green energy, private or public. In Los Angeles, the City owns the power and water company, and we like it that way. During the Enron crisis, we were selling energy to other areas. We had some problems with supply, but not nearly the problems that areas around us that were supplied by privately owned and publicly owned corporations had.

Frankly, I think that government ownership and stewardship of the primary and largest energy and water supplies is the best, much better than private ownership. These are basic resources. They are really infrastructure. We take it for granted that the government owns the freeways and streets or at least has the right to take easements for them and build and maintain them. So why shouldn't the government own the other most basic things like energy and water.

Actually, I believe that the California State Constitution establishes that the State of California owns all the water in the state. I don't think that is necessary with energy, but there is nothing wrong with the government funding energy projects. Private businesses may have difficulty profiting from green energy until it becomes more widely accepted. That, I think, is the lesson from the experience in Virginia.

[slackmaster]

69. Consider who would be employed to install the panels...

...Private contractors would install panels and power equipment that was manufactured in the private sector, because that's where all the expertise in the field lies.

Government can help by implementing things like tax incentives, which California has been a leader in doing.

[JDPriestly]

70. Yes. Government can build the grid.

Government can put up solar panels in the desert if it wishes. Our local water and power company which is government owned can produce electricity any way it wishes. The more the government sets a precedent, the easier it is for entrepreneurs to follow or complement and complete the work of the government. If the Tennessee Valley Authority had not been established by the government, it is doubtful that electricity use would have spread so quickly in that area. Private businesses would not have taken the risks in installing electricity into homes had electricity not been made available by the government. That is because it was a very poor area at the time the TVA was established. Private businesses got their chance to profit thanks to the government's initial investment. That is as it should be.

Had we not purchased the Louisiana Purchase and then opened the rest of the country up westward, the railroad magnates who did so much to make development of the Middle West possible and who enriched themselves beyond belief in the process would not have had a chance.

So many Americans ignore the facts about the role of the government played, historically, in making it possible for private companies to make money.

[slackmaster]

25. SB810 is a good bill, but it will only work if more people are employed

We need new private-sector JOBS!

[kdtroxel]

31. State Owned Banks: Fixing the Economy by Ellen Hodgson Brown

“State Owned Banks: Fixing the Economy by Ellen Hodgson Brown”
Link: http://www.youtube.com/watch?v=v6Q0YWQdnfU&feature=player_embedded

Ellen Hodgson Brown explains the rationale behind state owned banks. Due to the collapsing credit bubble which in turned popped the housing bubble, leading to recession, and perhaps, economic depression, there is not enough money and credit to keep the economy running. Three possible solutions are that the federal government issue debt-free money directly, that communities create alternate or community complementary currencies, or that a state creates its own state owned bank, similar to the Bank of North Dakota. For example, a state owned bank in Michigan could provide credit to the state itself for infrastructure projects, help provide the capital for local banks, so they could in turn provide low interest loans to home owners, small and medium sized businesses, and students. In addition, a state owned bank could be used to help fund state expenses during tough times by providing loans. A major advantage of a state owned bank is that the state could borrow money from the bank at zero interest, for projects, saving between 50% and 100% of the cost of the project, since there would be no interest burden when repaying the loan. For Michigan, California, Florida, and other states looking to solve their economic problems, the state owned bank model, and the Bank of North Dakota in particular, should be studied in depth, as such a bank could provide the credit needed within that state economy during depressions and other tough economic times.

[jody]

35. CA is the bellwether for the nation. I hope they find a solution to their depressed economy soon

because our representatives in congress and the White House don't have a clue.

[RKP5637]

37. Very good point! IMO the US runs on emotion today rather than logic. n/t

[jpak]

40. Those lazy bums should get a job - and we need to make Bush's tax cuts permanent

that'll fix things

yup

[Ticonderoga]

43. Weed?

We don't need no stinking weed.

[defendandprotect]

46. Taxes on corporations should be hiked to pay for the "downsizing" .... remember the immense profits?

[dickthegrouch]

48. And the payouts are almost worthless

The absolute maximum in unemployment payout per week is untenable for anyone with a California-sized mortgage.
$900/month cannot pay for a San Jose median priced house even now after they've 1/3 of their value. Far less pay for food, transportation, medical insurance/bills and everything needed to make finding a new job slightly easier.

[slackmaster]

65. That's a crock. The maximum UI benefit in California is $450 per week.

A person who earned 11,674.01 or more in their best test quarter (of the year that ended six months prior to the claim date) qualifies for the maximum.

Someone who earns in the neighborhood of $46,000 per year probably doesn't have a mortgage payment over $1,800 per month.

The last time I collected UI, in 2004, I collected the maximum benefit for 5 months while I looked for work. With that plus the payout of unused PTO from the job I was laid off of, my cash flow over the period was not adversely affected.

It's a whole lot better than no UI benefit.

[Name removed]

59. Deleted message

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[slackmaster]

64. Nobody voted down a "Pot tax". Proposition 19 would not have created any state pot tax.

It would have allowed cities and counties to implement their own taxes.