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August 17, 2012



I just came across the State Controller's website with the pdf document of July's state revenues:


If you open the document and scroll down to page 4 you will see personal income tax and corporate tax receipts are fine (meaning at or above the estimates in the budget) but sales tax came in 33.5% short and something called "not otherwise classified" which is big came in way low. The bottom line--one month into the fiscal year and we are 10.1% behind. Nice job Sacramento. So we will fix this by RAISING the sales tax rate, right????


The link to this article by Victor Davis Hanson could be posted as a comment to any number of threads, but I'll just put it here since this is current:

August 20, 2012
There Is No California
by Victor Davis Hanson
Tribune Media Services

Driving across California is like going from Mississippi to Massachusetts without ever crossing a state line.

Consider the disconnects: California's combined income and sales taxes are among the nation's highest, but the state's deficit is still about $16 billion. It's estimated that more than 2,000 upper-income Californians are leaving per week to flee high taxes and costly regulations, yet California wants to raise taxes even higher; its business climate already ranks near the bottom of most surveys. Its teachers are among the highest paid on average in the nation, but its public school students consistently test near the bottom of the nation in both math and science.

For the rest of it, go here



From today's SacBee:

California's poverty rate was 16.9 percent in 2011, the highest it has been in 15 years, according to numbers released by the U.S. Census Bureau this week. Nearly one in four California children lives in poverty, the report said. More than a third of Californians living below the poverty level are age 18 or younger.
Since 2006, the rate has increased by 4.7 percentage points. The last time it was as high as it was in 2011 was 1996, when the state was still recovering from an early 1990s recession and just before the high-tech boom that improved economic conditions across the board in California.
– Daniel Weintraub, California Health Report

Read more here: http://www.sacbee.com/2012/09/15/4822026/the-buzz.html#storylink=cpy


Here's an edited summary of a Manhattan Institute study that was release today at http://www.manhattan-institute.org/html/cr_71.htm

For decades after World War II, California was a destination for Americans in search of a better life. In many people’s minds, it was the state with more jobs, more space, more sunlight, and more opportunity. They voted with their feet, and California grew spectacularly (its population increased by 137 percent between 1960 and 2010). However, this golden age of migration into the state is over. For the past two decades, California has been sending more people to other American states than it receives from them. Since 1990, the state has lost nearly 3.4 million residents through this migration.

The data show a pattern of movement over the past decade from California mainly to states in the western and southern U.S.: Texas, Nevada, and Arizona, in that order, are the top magnet states. Oregon, Washington, Colorado, Idaho, and Utah follow. Rounding out the top ten are two southern states: Georgia and South Carolina.

What has caused California’s transformation from a “pull in” to a “push out” state? The data have revealed several crucial drivers. One is chronic economic adversity (in most years, California unemployment is above the national average). Another is density: the Los Angeles and Orange County region now has a population density of 6,999.3 per square mile—well ahead of New York or Chicago. Dense coastal areas are a source of internal migration, as people seek more space in California’s interior, as well as migration to other states. A third factor is state and local governments’ constant fiscal instability, which sends at least two discouraging messages to businesses and individuals. One is that they cannot count on state and local governments to provide essential services—much less, tax breaks or other incentives. Second, chronically out-of-balance budgets can be seen as tax hikes waiting to happen.

The data also reveal the motives that drive individuals and businesses to leave California. One of these, of course, is work. States with low unemployment rates, such as Texas, are drawing people from California, whose rate is above the national average. Taxation also appears to be a factor, especially as it contributes to the business climate and, in turn, jobs. Most of the destination states favored by Californians have lower taxes. States that have gained the most at California’s expense are rated as having better business climates. The data suggest that many cost drivers—taxes, regulations, the high price of housing and commercial real estate, costly electricity, union power, and high labor costs—are prompting businesses to locate outside California, thus helping to drive the exodus.

Population change, along with the migration patterns that shape it, are important indicators of fiscal and political health. Migration choices reveal an important truth: some states understand how to get richer, while others seem to have lost the touch. California is a state in the latter group, but it can be put back on track. All it takes is the political will.


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