Cali Leading the Fight?Follow

Note: this post is called "great" not because of any specific content, incredible insights, or groundshattered news. It is great solely because it agrees with the views of Varrus.

I'd be scared, personally.

Nah, I like you Varrus. Your help make the Asylum the Asylum.

Doesn't mean I agree with much of what you say, but you're not DISliked. And no, you're still not making sense.

We're not. We're not even close. As I mentioned, the most agriculturally productive states in the nation are either states paying more to Washington than they receive or states at least staying below the average.

This is excluding the ridiculous notion that Alabama, Mississippi, S. Carolina, etc are in the red due to feeding the nation via "farm subsidies".When a state's energy industry is sufficently profitable to send every man, woman, caribou & child in Land of the Midnight Sun a check for a thousand-odd bucks, that state has no place to be taking more federal money than it contributes, much less to be among the very worst offenders.

Edited, Jun 9th 2009 9:49am by Jophiel

The REAL reason marijuana is illegal. Hemp was infringing on the cotton (and paper) monopolies. Regardless of the fact that you couldn't get high on it.

You could probably get high on the chemical bath they use to make paper, or at least some brain damage as a consolation prize.

Quiz time! What affected the crime rate in Detroit more than the crack boom?

Ummmmm unemployment?

Pssstt... these days we call them "Coloreds"

Edited, Jun 9th 2009 11:47am by Jophiel

You still are. It just capped the rate of increase. Prop 13 also placed very high reqirements to pass any other taxes. As you correctly state, it was a taxpayer revolt.



See above. You are not only contradicting me, prop 13, but yourself.



What? Basically, when home prices fall, everyone paying property taxes gets a huge tax cut. Thus the government doesn't have enough money to keep going. It is very difficult to raise taxes (or even pass a budget) due to 2/3 vote requirements. Blame the illegals? Seriously? Blame entitlements? Well, sure, we could cut services - and it is likely we are going to - but this is going to include things like the prisons, police, fire, schools. Since most people do not want these things cut and feel they are "entitled" to them, sure you can say that. Unions? I assume you're saying state/county employees are paid too much? My father in law was an employee of Riverside county for decades. They didn't have a raise in something like 30 years. They were unionized. It didn't stop them from having extremely low wages. I suppose some state employees are overpaid. On the whole, however, here's the problem: when home prices are high, the state is flush with money. But home prices are high. It is hard to hire good people without large salaries since they have to live here. When home prices fall, the state has no money so we can't hire - even though we could get good people to move here at reasonable salaries.

Ultimately, tying state revenue to home prices is probably going to have to go. There are other taxes, but right now we can't change the system due to large voting requirements.



Sorry: who exactly was on this gravy train? I assume you're talking about illegal immigrants and the state employees? But that is so far outside my view of reality that I figured it would be best to check with you first.

I'd say the fundamental flaws in Prop 13 have been revealed and since it's going to be difficult to actually raise any other taxes to compensate, services will be cut. People will have the choice, but only a third can overrule the majority. I'd say that is a pretty serious flaw.

I meet the same 3 criteria as you. I hope you don't feel I'm "blasting you". I'm certainly challenging your ideas and assumptions.

So we have a, what, US$23 billion defect. What exactly would you cut that is going to make up that kind of money?

To me the answer is simple: instead of relying on property taxes, which as we have found out can fluctuate wildly, tax income or spending (sales). Change it to simple majority for taxes/budget and allow the legislature to change propositions by simple majority votes. Then if we keep electing liberal politicians, we actually will have high taxes and high services and if we elect conservative politicians, we'll have low taxes and low services. As it is now, it hardly matters who we elect: our taxes are governed by home prices, thus so are our services.

Quick correction. It did not cap the increase. There is no increase at all. Your property taxes are eternally 1% of the price you paid to buy the property. Period. It never goes up. Ever. Unless you sell the property. Then the new owner pays 1% per year on whatever he paid for it. As for the seller, if he buys another property with the profits of the sale of the first, he pays property taxes off the cost of the new property. If he doesn't, he has to pay capital gains taxes on the profit made on the original property (there may be other investment options available though, I'm not 100% certain).

Point being that it doesn't cap an increase. The tax doesn't increase. If you bought your home for 50k back in 1965, and today it's worth 500k, your yearly property taxes are still 1% of the original 50k purchase price (500 bucks a year). If you sell the house, the new owner will pay 5000 bucks a year in taxes on that home.

The property tax system in california is designed to apply taxes to people who buy and sell property for their business, while not penalizing folks who buy a home and live in it for a long time. What was happening was that retirees could not afford the property taxes on the homes they had purchased when they were working. It's a pretty good system IMO.




No. They actually don't. This is a side effect of Prop13. If I purchased my home for 500k 5 years ago, and today it's worth only 300k, I'm still paying 1% of the original 500k purchase price. Get it?

I could avoid paying those taxes, but then I'd have to sell the house and take a $200k loss...

I'm sure the process also saves the state a bundle in property assessment costs. You only have to assess the value of property when it's sold, and that's already done as part of the sale. The state does not need to do a darn thing.



Yeah. That's by design. Gee. Maybe they should stop spending so much? Wouldn't that be shocking! ;)



One part of the problem only, but yes. Due to some really screwed up federal regulations, California has to provide services for *everyone* regardless of whether they are here legally or not (Fire, Medical, Education, etc). That's part of the strings that come with federal funding for those things. However, the census numbers don't take into account Illegals (nor should it), so this effectively means that California receives less funding for the government per head that it is being mandated to provide services for. The net effect is hard to calculate directly, but I've seen estimates from 5-20 Billion a year. Which is a pretty good chunk of the current California Deficit.

It's not the only issue, but it is absolutely one of the reasons California is struggling economically. Really stupid business tax structures is another of course...




Yup. It's funny how everyone leaps to the services we all consider most important. Not one of those things is "entitlements" btw. We could gut welfare benefits. We could remove wasteful spending on a whole bunch of park and recreation expenses (I mentioned those silly eco-friendly bike paths which we pay ridiculous amounts of money to build and maintain). We could eliminate a bunch of social spending grants for pretty nebulous projects. There are a whole lot of things we could cut that *aren't* Fire, Health, Police, and Education. You know. All the stuff that isn't actually critically important.




Union workers and state workers are ridiculously overpaid and overstaffed. While dumping a bunch more unemployed folks on the streets would be a bad idea, I'm not opposed to pretty significant pay cuts across the board. Especially for highly paid administrators who don't seem to do much of anything at all except get in the way. Heck. Eliminate the prevailing wage laws and that would save the state a couple billion right off the top. And it might just improve worker efficiency along the way. Yeah. Free Market. What a concept!

Here's the thing though. There are other ways to trim budgets then trimming head count. In education, we pay a ridiculous amount of money selecting and buying "new" textbooks every year. Will it kill the students to learn from the same history textbook that last years students learned from? I don't think so. That's just an easy example. There are huge amounts of expenditures on things that aren't directly related with providing the service which could be cut. But everyone leaps to the scare tactic of jobs right off the bat.




And yet, it's not the private industries in California that are having too much trouble. There are some layoffs, but I haven't yet seen any major companies in California in dire risk of bankruptcy. Clearly, it's not just about being able to pay employees enough money to afford to live in the state. It has a whole lot more to do with paying employees relative to the amount of productive work they do. Companies with a profit motive manage to thrive in California *despite* Californians ridiculously harsh business tax code. If they can do it, then there's no reason the state can't as well. There's some other problem with the state labor forces that is causing their costs to be so high. What could it be? What could it be...



We do also have business taxes, income taxes, and sales taxes you know...

You're correct. Prop8 (A different prop8) allowed homeowners to have their property re-assessed in the event of a real estate slump. That wasn't originally included in prop13, and I'd forgotten about it until you mentioned it. Probably because it hasn't happened in a long time.

You were also correct about the 2% yearly increase cap. It's been awhile since I read the actual law on this and I missed that bit. It's largely irrelevant since that's typically going to be less than inflation and/or property value increases, still protecting a relative decrease in effective tax over time.


Um... But aside from quibbling over minor details of the CA property tax laws, what about this is "bad"? From my perspective we should be looking at reducing expenditures, not looking for ways to increase tax revenue. And judging from last months votes, most Californians agree with me.