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States Face Budget Shortfalls

Catz Part Deux

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What do you notice about this graphic? What I notice is that the states that tend to go blue are having massive budget shortfalls, and the red states, while suffering, aren't.

Why is that, do you think? Do you think that perhaps the blue philosophy of spending money regardless of whether it comes in or not, and overbuilding, and subsidizing lifestyles that are non-sustainable might have something to do with it?

I'm a fiscal conservative and a social liberal. Stuff like this really ticks me off, because I know damn well that we're going to be called upon to bail these places out.

And, in my own state, I know that the reason that we are having major difficulties is due to our own BLUE areas, the major metropolitan areas that can't support their own budgets right now.
 
I notice that Michigan, which is one of the worst states economically, is in the better half. Course, the Michigan government deserves credit for having made some hard decisions the last couple years to keep things under control.
 
The states that have the worst budgets seem to be the ones that grew the most.
 
I notice that Michigan, which is one of the worst states economically, is in the better half. Course, the Michigan government deserves credit for having made some hard decisions the last couple years to keep things under control.

I live in Michigan, and in Michigan things aren't easy.

Just remember a majority of employment in Michigan once relied on Manufacturing and the auto industry.
 
I live in Michigan, and in Michigan things aren't easy.

Just remember a majority of employment in Michigan once relied on Manufacturing and the auto industry.

I live in Michigan too, and work in the auto industry. I know things are hard, trust me. I do notice that despite those hard times, we are far from the worst state by that map, which says our state government is doing something right.
 
I live in Michigan too, and work in the auto industry. I know things are hard, trust me. I do notice that despite those hard times, we are far from the worst state by that map, which says our state government is doing something right.

Hillsdale, and yes I agree with you Michigan asnever been the worst state
I came here when I was 15 the first time.

I adopted Michigan as my home state.

The one thing I always liked about Michigan was it's people.

When they get knocked down they didn't stay down long.
 
Why is that, do you think? Do you think that perhaps the blue philosophy of spending money regardless of whether it comes in or not, and overbuilding, and subsidizing lifestyles that are non-sustainable might have something to do with it?

Whether the philosophy is particularly "blue" or "red" can be debated.

What cannot be debated is that treating spending as mandatory (and therefore fixed) when revenues are eternally variable is a budget bomb that is guaranteed to go off in the long run.

Sadly, for many states, that "long run" has compressed to now.
 
Well, many of those states have been governed by both left and right, so I think we can leave most of the partisanship aside.

The biggest state with the biggest problems is California, and it should be a case study of how not to govern. I believe it's two biggest problems are a one-two punch of an inability to slow the flow of immigrants combined with the worst law ever: Proposition 13.

It's reduction of property taxes by 57% and capping them at one-percent began a downward slide that they won't recover from until it's overturned.

Also, California's voting on propositions in general is unfortunately a bad idea, since people will almost always vote for more services and vote against ways to pay for them.

Their democracy has turned into a mobocracy where anyone willing to make the tough decisions gets voted out of office.
 
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The biggest state with the biggest problems is California, and it should be a case study of how not to govern. I believe it's two biggest problems are a one-two punch of an inability to slow the flow of immigrants combined with the worst law ever: Proposition 13.
Proposition 13 was not the problem. What has devastated their budget is the unwillingness of the legislature and the people generally to acknowledge that spending which outpaces revenue must eventually be balanced with revenue that outpaces spending.

Sooner or later the bill comes due for everyone. Even California.
 
Hillsdale, and yes I agree with you Michigan asnever been the worst state
I came here when I was 15 the first time.

I adopted Michigan as my home state.

The one thing I always liked about Michigan was it's people.

When they get knocked down they didn't stay down long.

Oh, I love Michigan and the people. I am in the Grand Rapids area, and absolutely love it here. I also like how our house and senate tend to be split, Repubs having majority in one, dems in another. They actually have to work together to pass anything.
 
Proposition 13 was not the problem. What has devastated their budget is the unwillingness of the legislature and the people generally to acknowledge that spending which outpaces revenue must eventually be balanced with revenue that outpaces spending.

Sooner or later the bill comes due for everyone. Even California.

And prop 13 was the noose that killed the golden state.

a good read:
Harold Meyerson - Proposition 13 and the Roots of California's Budgetary Problems - washingtonpost.com
 
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I read that article. I disagree with Mr. Meyerson. He (and you) proceed from the thesis that raising property taxes is a necessary thing.

Increasing taxes is only necessary if one wishes to increase government. The implicit logic in Mr. Meyerson's article is that spending must occur. It does not.

The solution to California's budget crisis is the same as it is for every state, and even for the United States: trim spending to match revenues.

The refusal to curtail spending is the devil in these details:

Hit & Run > Paul Krugman: If Only California Could Just Raise Taxes - Reason Magazine
Here is where the traditional liberal argument loses me. The California budget "emergency" isn't a tax problem, it's a spending problem. State spending in the past two decades, as this Reason Foundation report [PDF] spells out, has increased 5.37 percent a year (and nearly 7 percent for the past decade), compared to a population-plus-inflation growth rate of 4.38 percent. If the budget growth rate had been limited to the population-inflation growth rate, the state would be sitting on a $15 billion surplus right now. Surely enough to dip into during a real emergency. What's more, despite this alleged tax straightjacket, Californians manage to still pay 21.9 percent in state and local taxes, compared to 14.5 percent for Texas.
 
Up to one third of California's budget over run is because of illegal immigration.

For some reason our state doesn't have the ball's to deal with this issue,instead they chose to cut spending in schools,which lose over 6 billion do to illegal immigration every year.Also fire and police departments,which also lose money dealing with illegals.

If you added up the last 5 years spending to cover the illegal population here we would be in the black and not the red.
 
I read that article. I disagree with Mr. Meyerson. He (and you) proceed from the thesis that raising property taxes is a necessary thing.

No. But the whole "proposition" deal ties the hands of the legislature.
It's been the equivalent of giving your teenage children the car keys and credit cards with no reprocussions.
 
No. But the whole "proposition" deal ties the hands of the legislature.
It's been the equivalent of giving your teenage children the car keys and credit cards with no reprocussions.

Going back on Prop 13 is like giving that teenager the keys and some booze to go along with it though.
 
Oh, I love Michigan and the people. I am in the Grand Rapids area, and absolutely love it here. I also like how our house and senate tend to be split, Repubs having majority in one, dems in another. They actually have to work together to pass anything.

I'm down with that, now if we could just get that on the federal level huh?

I always liked the small towns myself like Coldwater,Ypsi, Adrian towns like that.
Although I did live at Flint and worked at GMC unfornunatly one of the first to be closed by Smith.
 
Well, many of those states have been governed by both left and right, so I think we can leave most of the partisanship aside.

The biggest state with the biggest problems is California, and it should be a case study of how not to govern. I believe it's two biggest problems are a one-two punch of an inability to slow the flow of immigrants combined with the worst law ever: Proposition 13.

It's reduction of property taxes by 57% and capping them at one-percent began a downward slide that they won't recover from until it's overturned.

Also, California's voting on propositions in general is unfortunately a bad idea, since people will almost always vote for more services and vote against ways to pay for them.

Their democracy has turned into a mobocracy where anyone willing to make the tough decisions gets voted out of office.

Being a resident of the great state of California I can unequivocally state that your logic is flawed and couldn't be more wrong.

California's problems stem from the fact that it's Legislature is infested with Librul Democrats who believe that every illegal alien has a right to a drivers license and healthcare and belief that the best way to stay in political power is to pander to ignorant voters with Government giveaways and pander to powerful unions that dominate Government and education.

California also has become infested with the notion that the environment and green initiatives should displace industries that have provided jobs and tax revenue for over a century; primarily agriculture which needs a LOT of water.

The FACT is that revenue has not gone down, spending has gone UP.

As a result of their anti-business positions and legislation, there has been a recent exodus of businesses from the state to other more favorable tax states where they can do business and not suffer the burden they are under in California.

Over ten years ago the argument was FOR a lottery which would be the answer to all our educational funding woes; yet today we have a HUGE budget shortfall and never seem to have enough revenue.

Several years ago the Governor negotiated a huge tax rate increase on Indian gaming operations; yet today we have a HUGE budget shortfall and never seem to have enough revenue.

What is apparent is that Democrats always seem to argue that what we are having is a “revenue” problem and refuse to see it as a “spending” problem. Even if we repealed Proposition 13, we would be burdened by continuing budget shortfalls and the never ending Librul argument that there is not enough “revenue.” The REALITY is that Librul Democrats will NEVER have enough “revenue” to pander to their ignorant constituents and powerful unions.

The ONLY thing that can FIX the problems confronting the failure of the politics in California is a reform of the way they re-district. If there was a reform of how the districts are drawn to a less partisan form where districts will require politicians to actually fight for their right to serve instead of creating vast “safe” districts, the politics will substantially improve and politicians will have to answer to various constituents over their ineptness to pass a balanced budget.

Enacted Budget - Summary Charts

However, I want to specifically address your comments regarding property taxes and the flaws contained in them:

... combined with the worst law ever: Proposition 13.

It's reduction of property taxes by 57% and capping them at one-percent began a downward slide that they won't recover from until it's overturned.

Property taxes under prop 13 are held to increases of 1% a year on properties that are held by property owners; the minute the property is sold or changes hands, it is re-assessed to current market and thus the revenues are increased.

Property values have skyrocketed in recent years in California which has resulted in a HUGE boost in revenues for the State. Last year property values and the economy tanked. This caused a huge revenue loss as a result of dropping values and mortgage defaults.

The California Legislature flush with revenues spent spent and spent without any regard towards the possibility that these revenues may some day end. This spending is what caused our current problems, NOT the loss of revenue.

But the notion that prop 13 had anything to do with revenue shortfalls is false; it is recent events beginning in the fall of 2008.

Prop 13 allows retired workers who are on a fixed income in a HIGHLY speculative housing market to stay in their homes rather than being forced to sell them at inflated prices to pay property taxes that are above their means to pay. This is a GOOD thing.

Property taxes as a whole are an obscenity that should be banned anyway. What logical sense does it make for Government to TAX the “value” of property that has not exchanged hands? What logical sense does it make for Government to tax business inventories and car values? NONE whatsoever.

Property taxes are an abomination and should be held as unconstitutional. You wish to tax profits and income, fine; but do not tax individuals on property they have already paid huge taxes on when they purchased them. No one who is using their brain can support such double, triple and multiple taxations.
 

I love it, an argument against Prop 13 from the Librul Washington Post; yet the argument is as empty as those from our own Librul LA Times.

Here is a chart of property Tax revenue by city from 1991 to 2005. You will see that revenues have increased by 47.5% during the same period.

From the years 2001 to 2005 property tax revenue increased by an astounding 30.2%!!!

It is hardly a REVENUE problem; it is a SPENDING problem.

http://www.californiacityfinance.com/PrT05PUB.xls
 
No. But the whole "proposition" deal ties the hands of the legislature.
It's been the equivalent of giving your teenage children the car keys and credit cards with no reprocussions.

Wrong again; the whole proposition deal allows retirees to stay in their homes and live in the state they retired in.
 
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