How golden California sank into a black hole

[marmar]

from the Toronto Star:



How golden California sank into a black hole
... and how Toronto could go the same way

Sarah Barmak
SPECIAL TO THE STAR


As we hear of California's financial woes, here's a question: could Toronto suffer the same fate?

In the U.S. West, a nightmare has been realized. California's state machinery has ground to a halt. Construction projects have been suspended. The government is issuing IOU's in place of cash. Tax refunds have been postponed. State workers are forced to stay home.

These measures are barely keeping the Golden State from drowning in $42 billion (U.S.) of debt. California's schools may lose $9 billion(U.S.) in funding this year; prisons and social services will also be hit.

The path the state took is complex, and different from Toronto's money woes. A key to California's disaster is Proposition 13 – the "People's Measure to Limit Property Taxation" – that voters approved in 1978.

It capped the rate property taxes can go up each year. It kept state revenues down even as the economy, real estate values and demand for services and infrastructure grew. ........(more)

The complete piece is at: http://www.thestar.com/News/Insight/article/584094

[BlooInBloo]

1. 1) The electorate.

[Liberal_in_LA]

Arnold didn't do any better than Gray Davis. the GOP ran the Dem Gov out of office & left us with

the groping boob.

[ljm2002]

22. Arnold did much worse than Gray Davis...

...from the gate, when he settled Enron's $9B debt to California for pennies on the dollar. Gray Davis was going after them for the full amount, and that is why the recall circus was initiated in the first place. Big Energy, backed by the brain dead Republic party, did not want one of theirs to be gone after.

[Liberal_in_LA]

23. Yep. I hope the CA debacle puts a nail in the coffin of Arnold's presidential hopes.

Yeah, he's not eligible but, a few years ago, there was talk about amending the constitution as if Arnold was some great prospect.

[slackmaster]

2. Pure codswallop - California property taxes are close to the median for the nation

Rates are low, but that is offset by high property valies.

Our state income taxes and sales taxes are at or near the top. The problem is spending, not lack of income.

[marmar]

3. Grover, is that you?

:eyes:

[slackmaster]

4. Speak English

Don't buy cheap Canadian tabloid bullshit.

[marmar]

6. The Toronto Star a tabloid? Your arrogant ignorance is on full display....

n/t

[slackmaster]

10. This particular article is worthy of a tabloid, not of a serious news outlet

Why don't they mention income taxes, sales taxes, fuel taxes, motor vehicle registration fees, or other sources of income?

Why doesn't it mention spending at all?

What's wrong with this picture?

[Deja Q]

14. More like Oscar the Grouch

:P

[slackmaster]

15. Are you going to dispute the accuracy of what I wrote?

Or are you satisfied with posting childish personal attacks?

[NV Whino]

5. We had a surplus until Enron screwed us

I wish people would get over this prop 13 misinformation. It simply is not true. Codswallop is exactly the right term.

[slackmaster]

13. Another big reason the article is inaccurate - Property taxes are collected and spent by counties

And by localities, not by the state.

A majority of the state of California's revenue comes from personal income taxes. Property taxes aren't even on the chart.

[HelenWheels]

7. Taxes

It seems Californians decided they didn't need to pay taxes. I don't know how they thought their state would run without money. I feel bad for them as I have quite a few relatives living in CA. Most of them have already taken pay cuts or had to take days off without pay.

[slackmaster]

9. Our income tax, fuel tax, and sales taxes are about the highest in the nation

So are our motor vehicle registration fees. The state has had many years of budget surplus between the passage of Proposition 13 and now. The legislature always manages to spend it all, and never saved the surplus when we had it.

[Le Taz Hot]

8. Then there's the 800 pound gorilla that

NOBODY wants to talk about -- the impact of illegal immigration.

3 . . . 2 . . .

[yella_dawg]

17. My 800 pound gorilla can whip your 800 pound gorilla...

Insane incarceration rate and the growth of law enforcement spawned by the war on drugs.

You can only lock up so much of your population before it has economic consequences.

[Le Taz Hot]

21. Well, no, not really.

Add the cost of MediCal, food stamps, Section 8 housing, WIC, identity theft, taking jobs that legal residents could desperately use and most of the money earned not being spent locally but going outside the borders, we're talking BILLIONS.

The insane incarceration rate has to do with FEDERAL mandatory drug sentencing and that gawdawful three-strikes piece of shit (OK, that's a state thang). Notice that, even though the Dems are supposedly in charge, neither issue is even close to being addressed.

[Turbineguy]

11. It reminds me of a line from Blackadder

in which Percy is comparing the eyes of the Spanish Crown Princess to a fabled jewel:

"So, something you haven't seen is slightly bluer than something else you haven't seen.."

[msongs]

12. solution? cut all services to districts represented by republicans. give the people what they wanted

in financial services terms, if it's red, it's dead.

just like dems in congress need to do - cut out the red states and give repubs what they want.

Msongs

[Still Sensible]

16. I know everyone wants to blame Arnold for this mess

or blame Grey Davis, or Pete Wilson before him. But it is really a lot easier to explain, IMO.

California is obviously one of the most progressive states, meaning the people there generally want the government to provide a high level services, protect the environment, ensure a high standard for education at all levels, promote fairness for all minorities, etc..

But on the other hand, no state has instituted government by referendum on a scale anywhere near what California has done. Guess what? When you ask people to pay for a more progressive agenda through the ballot box, all of a sudden those high-minded ideals lose some support. Propositions to limit the tax burden pass time and again because a VOTE NO campaign on tax issues is remarkably easy to win--especially since the GOP has had so much success selling the all-tax-is-bad and all-tax-cuts-are-good memes.

Nowhere is the contrast between the needs and goals of state government and the allowed mechanisms of state government more in opposition. And when you add the fact that California absorbs more of the burden of illegal immigration than any other state--and gets no solution or relief from the Federal government, you are left with the perfectly fucked up situation you see today.

[slackmaster]

18. Taxpayers, homeowners, white people, people over 40, and people with high incomes tend to vote more

Than people who don't fit those descriptions.

:hi:

[Still Sensible]

19. No question

which makes "government by referendum" even more impossible.

[rvablue]

20. Marmar, don't know if you live in Toronto, but if you want to learn more about the effects of Prop.

13, you must find a copy of Peter Schrag's "Paradise Lost."

It is a must read on this issue. He predicted long ago that Prop. 13 would sink California's economy.

Of course, each and every CA DUer will dispute this. The cost of living in CA is high. So, who in their right mind would want their taxes to go up. But if no one, either the legislature or the CA electorate, has the political will to overturn Prop. 13, it will not matter who governs CA, Democrat or Republican.

It's economy will stay a mess.