California has $4.5 billion tax surplus!

[Bulldogdad]

Originally Posted by slo1318

This was a major point in the article nobody else has addressed.....
It's good the states rebounding a bit though. I know construction and real estate is up from the last few years

I agree and Happy Cinco de Mayo.

[JGC97]

Originally Posted by 18Montclair

They should save as much of that as legally possible, ijs.

LA Times

Couldn't read the article. It is gone

Originally Posted by ZhugeLiang

It's pretty easy to distinguish who actually read the entire article and who didn't in this thread.

From the article:

It's possible that Californians, fearing federal income tax hikes stemming from the budget standoff in Washington, cashed out investments late last year. Jerry Nickelsburg, senior economist at the UCLA Anderson School of Management, said federal statistics suggest many people did so. "If you had a choice of taking income in January or December, and you will pay less taxes in December, why wouldn't you do that?" he said.
That could account for some of the current surplus — and state income could fail to keep pace in the next fiscal year, which begins July 1.
Chris Thornberg, a founding partner at Beacon Economics in Los Angeles, said he is concerned that lawmakers will use the spike in revenue as an excuse to abandon efforts to rein in public-worker benefits or stabilize the state's tax system. California's reliance on income taxes makes its finances somewhat unpredictable and has led to cycles of boom-and-bust budgeting.





As this portion implies, we're looking at an anomaly here. We do rely far too much on income taxes. If we want to bring back the good times, some institutional changes are in order. Heck, I would actually support a total repeal of Prop. 13, on the condition that we become a no income tax state. Our property taxes would provide more stability anyway.

"We're not framing the debate around what to cut, we're making choices about what kind of investments we want to make."

And that's why this moment will be so fleeting while the Assembly is populated with ideological dunces like Bob Blumenfield. Not that a tax revenue surplus is really anything to cheer about in the first place. All it means is that we're overtaxing people. Except that we don't actually have a surplus. You can't have hundreds of billions in unfunded liabilities and then cheer the news that you have a "surplus."

Like I said in a similar thread a couple of months ago, this is almost the equivalent of someone who is $100,000 in debt who gets excited over a $100 bonus at work.

Sorry but I have to chuckle at your comment about bringing back the "good times." Quite a few people don't believe times were all that good, that's the major reason Prop 13 was passed. If you or anyone else doesn't know or remember why it was passed in the first place, give a listen (if you have 30 minutes to spare) at this audio clip from 2010. I could comment on the entire clip but I think it's something people here should listen to, in order to fully understand how the state was affected by Prop 13. Interesting, too, is that about 16 minutes into the program, a caller reminded people of a little history back in '78 and who was governor at the time. Also, around 22 minutes into the clip, you'll find out just what percentage of people who originally bought homes in the 70's still own them.

The Impact of California's Biggest Tax Revolt | KPBS.org

As far as repealing it? No, I would not support that but I would change one thing. The loophole for those who inherit the home from their parent(s) and grandparent(s). As it is now, they can enjoy the same low tax base without reassessment. I would support repealing that portion of the Proposition. I'd also repeal the loophole for commerical properties, as well.

As for turning California into another Washington State? No. It will not work. As someone else mentioned, California's economy is 9th in the world. Revenue from income is imperative to keep the state from going under. Whether it comes from business or residents, it's a vital necessity and should remain.

[nullgeo]

Originally Posted by HereOnMars

As for turning California into another Washington State? No. It will not work. As someone else mentioned, California's economy is 9th in the world. Revenue from income is imperative to keep the state from going under. Whether it comes from business or residents, it's a vital necessity and should remain.

As one who lives both states, home base in Washington, Boy Howdy! it won't work! Right Mars

Listen, this business I read here often about how Washington (and other states) have no income tax and therefore cheaper is just plain funny. It costs money to run EVERY state in the union. Some states are so small and simplistic in population and economy that they are a bit less over all ... but the states, all, are going to get their money one way or another. And if you live in a place with California's complexities, and what California offers, why on earth would you expect it to be cheap?

[Social Democrat]

Originally Posted by 18Montclair

They should save as much of that as legally possible, ijs.

LA Times

I agree completely - we need to be cautious and not just go wild with sepnding and find ourselves in the hole again.