California As Third World Country - 1978
By Gordonskene Monday Oct 05, 2009 6:00pm
(Welcome to California!)
With the current state of eternal/ongoing financial crisis in California, I thought it would be a good idea to revisit the day where things went south. On June 8, 1978; the day after the election and the "voters revolt", California was poised to go from budget surplus to bankruptcy in a very short time.
Gov. Brown: “The message is, that the Property Tax must be sharply curtailed and that government spending, wherever it is, must be held in check. We must look forward to lean and frugal budgets.”
Lots of people forget just how this thing got started, since it was 31 years ago - time has a tendency to cloud things over, particularly events that seemed like a good idea at the time, but over the long haul just spelled disaster.
So in case you were wondering . . .
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What California needs now is a Total Recall.
LOL
Clever. I like it.
Are we talking about our country being a third world country!!!
For eight years Bush , Cheney , republicans with the non resistance from democrats , Bush has been transferring and handing our country , economy , jobs , manufacturing plants to other countries and transferring our laws and power in the hands of this Global Empire..
You can not tell me that with Bush's illegal war , giving of our tax money to his friends and war contractors , giving trillion of dollars in welfare tax cuts to the top 10 percent of the wealthy in our country you did not see it coming..
So why all of a sudden when the s... start really hitting the fan we say look at this it must be Obama..
Well Obama is not helping matter that much , it looks as if he is continuing to carry the ball for a 3rd term of the Bush/Cheney republican administration.. This is not the promises that I HEARD Obama make and this is certainly not change and transparent government..
To think our government has the b...s to call other nation a secret government and has no concern for there citizens and their welfare..
Do you get a chuckle out of this????
Face it this government , Global Empire does not give a s... about you or me it is about wealth , power and Global dominates of the world..
If you believe we have a democracy , then explain how you get to that answer...
................actually the VAMPIRE/EMPIRE needs a total recall! This is the 'expected' result of the VAMPIRE/EMPIRE, they are turning us all into peons with no 'rights' at all. California is what happens naturaly, organically from the mentality of 'What you have is mine, what I have is mine, too. F**K the rest of the world. We got ours.
The governator before Aharnold came to town.
Bank On It: How Cash-Starved States Can Create Their Own Credit
Montana is another of the solvent states, but our governor (You guys still want Schweitzer? You are welcome to him.) and legislature has balanced the budget on the backs of public education and the state university system (lowest per student spending in the nation). To give you an idea of how bad it is, the University of Montana student government lobbied the legislature to allow a tuition increase. That's right, the students asked for a tuition hike. All this while the state is sitting on a general fund budget surplus of $392 million.
when I'm in the states, I miss it. Having said that, Prop 13 is a joke and should be repealed. It would be extremely hard to however because of political pressures and would require a mass movement to push it through. In other words, not in the near future. What should and will happen has never been as far apart as it is in modern America.
"All this while the state is sitting on a general fund budget surplus of $392 million."
This is why the "fiscal conservatives" drive me crazy and are, as usual, dead wrong. If the government has a surplus then demand will go down if exports don't increase or if people don't dip into their savings. When governments have surpluses and the region they govern doesn't export more or if the people don't dip into their savings you have decreased aggregate demand, price deflation and a recession (sound familiar?). Incomes have declined or stayed flat for the majority of the country for about 40 years. We don't export nearly as much as we used to, what we do export we export only because of massive state support, and people are already trillions in debt (in large part because of stagnating or declining wages, globalization and neo-liberalism). What in the hell will a budget surplus do in this economy but make a bad situation worse? Can the free market fundamentalists finally just shut the hell up and let new ideas finally enter the picture? Their time has passed, it was and is a disaster.
..cutting ones' nose off to spite his face..THIS IS IT!
Good luck LEFT COAST!
Burn in hell! Continue to close down libraries, or have them close at 3 in the afternoon like they have been in California (does the Reagan library stay open longer because it is more efficient?). Who the hell needs books? We already know all that we need to know. Continue to sell off the national parks, especially to loggers. Sure, there's no economic or logical justification for it, but it will pay for the failures of fiscal conservativism and the no new tax crowd. There are too many Redwoods. Stick with prop 13 too, it surely has done well to the once strong California educational system and the funding of other needed services. Yeah, the LEFT coast can run off a cliff. Surely the right wing has done the left, right and middle of America well. Let's do one better. Chile privatized their pension system, it was a disaster to the point that the conservative candidate for president in their last election wanted to move it closer to something like the US' system and said that something needed to fundamentally change.
http://www.ppic.org/content/pubs/jtf/JTF_Futu...
some say there's too many people in california with more to come. by 2025 the population is speculated to become about 48 mllion.
It is not a surplus of people, but a deficit of brains to go with them that is the problem.
..but I have to ask, how much of that "population" will be paying taxes? If they don't, what then?
n/t
The birth of the Reagan Revolution: the triumph of blatant fiscal irresponsibility on behalf of the greedy rich.
It is a source of unending embarrassment to me that my dad voted for that fucking thing.
At least you are not your dad, right?
My dad embarrassed me all the time and he's a goddamn lefty.
And agnostic, bah! :p
At least you are not your dad, right?
Hell no. I love my dad, but he can be maddening.
Unfortunately, I was one year shy of the voting age in 78, or I would have cancelled him out with my vote eagerly. Even back then I could tell 13 was one of the most foot-shootin' things I'd ever heard tell of.
You have my sympathies.
Unfortunately, like everything conservative, it's our children and future generations who are the ones to really pay for GOPer stupidity.
The one consolation I have is that about halfway through the 80's, my dad got sick to death of the Republican Party. Now he just doesn't like any of them, but he votes Democratic because he says he wouldn't be caught dead supporting another asshole like Reagan. And I was cheered by the way he'd cuss whenever he heard Bush's whiny voice. He quite likes Obama, too.
The place where the guy who lost the election can force a new election in the hopes that he will win that one.
And in the process for the first time Californians are presented with 30+ candidates, about a dozen of which were eminently qualified, yet they choose the actor instead (the midget and the prostitute being a bit too weird I suppose).
Prop 13 was a huge mistake, and it was sold like all good snake oil: as the cure for what ails you.
And even the liberals bought a bottle. Imagine that!
Oh well, too late to fix that one now.
Time to declare insolvency and start fresh.
how about the fact that the fed still owes this state billions, thanks to the enron scandal
or that the populace was scared into enacting that bs 3 strikes law
or bs term limits, which has caused both parties to veer to their extremes
..here's another one here, ..can't see the forest for the trees. There may be a lot of problems, hindsight is 20/20 though and having said that, would CA have those problems if they didn't have 13? Would they be as bad if they did? A domino falls one tile at a time!
Davies had a good chance of recovering (from the guys who made out like bandits at Enron) a lot of the money lost during the blackout period.
A lawsuit was filed by California Lieutenant Governor Cruz Bustamonte against Enron, among other electrical power "providers", with the aim of reclaiming excess energy charges of $9 billion dollars of Californians taxes.
This sort of thing wasn't going to fly with those in power, so they had Davies recalled (using the budget deficits they had caused) and put their man Ahnold in place.
Ahnold made sure that the power companies paid back about 2 cents on the dollar.
The whole sordid affair was covered by the excellent journalist Greg Palast. You guys should know this stuff already.
Man I love you guys, you were the best site ever for the latest info during the 2008 election and I became a huge fan since. I also donated a couple of bucks last time you guys asked. So I am a fan and love the site.
but seriously with regards to prop 13, leave it alone, your ignorance really shows when it comes to economy or personal financials (which may explain why you keep blogging about your money problems; i.e. unemployed, no benefits etc.). This is not a personal attack and I don't want to go there with name calling.
OK. now for my logic as to why Prop 13 was the greatest thing for California ever.
The current financial crisis has nothing to do with prop 13 and here's why. Santa Clara county where I'm from (disclaimer I own a house in this county as well as other properties in other counties protected by prop 13). Any idea how much Santa Clara county gets from property taxes? About 3 billion dollars give or take a few hundred million for the county of santa clara alone this is expected for 2009/2010 fiscal year...
http://www.sccgov.org/SCC/docs%2FAssessor%2C%...
Guess what happens when the government takes all the tax revenues for the year? They spend it, and do they save? No.
Take example what the school districts did in 2006 when it became flush with monies from increase property tax revenue? One highschool in the East Side High School districts gave out laptops to its incoming students. This year they're in a cash crunch due to declines in tax revenues.
The problem here is and always will be is that governments, especially local governments have no incentive to save and prepare for the worst. they will spend every dime they get from tax revenue. Prop 13 was designed to protect homeowners from over taxation. Even with Prop 13 protection, santa clara county is still getting 3 billion dollars in prop tax revenues. This is more than sufficient to run a local county governement and its cities schools, police, fire departments etc.
The financial crisis in California has nothing to do with Prop 13, but rather governments mismanagement in preparing for lean times during flush years. As well as other governing issues such as approval of budgets, fighting of the budget along party lines etc....
I know I'm over simplifying the issue here...even still, I'll sum of my argument thusly, you're telling me that even under prop 13 protection, 3 billion dollars is not enough money to run the county of santa clara?
Most of you guys don't own homes or multiple properties in the state of california, thus its easy for you to argue against prop 13. But from an owners point of view, I'm paying over $6,000 a year for my house, why should I pay more if the LOCAL county government doesn't know how to manage the 3 billion dollars its gets every year? The amount of revenue local government gets from prop 13 is more than sufficient.
I'm not against paying taxes, I believe, Like our VP Biden, that it is our patriotric duty. I however don't believe in mismanagement of tax revenues.
I gotta stop ranting here...since I'm going in circles now...but CROOKSANDLIARS, give up the prop 13 complaints and buy a house and start paying taxes....ONLY THEN WILL YOU KNOW WHAT I MEAN.
..like the rest of America?
I don't know, is 3 billion dollars enough to run Santa Clara?
The reason why I say yes is because in the real estate market hey day from early 2002+ upto late 2008, you had surpluses in the county of Santa Clara. Instead of putting aside the surpluses and save they took on new programs basically spent all the monies. Aside from the 3 billion dollars or so the County of Santa Clara will collect, you have to factor in personal property taxes charged to businesses (for inventory, equipment etc), fees for business licenses, fee's for income etc....I just don't see how Prop 13 given the amount of revenue generated for 2009/2010 is the cause of California's government's financial crisis.
Please educate me.
And prop 13 sucks. I have no clue what drove you to sing at 3AM for the first time just to defend prop 13 though.
Prop 13 is only great if you bought your property a few decades ago, for the new or first time owners since, it just plain sucks and it is unfair, period.
I had to edit my reply since I got a little too cocky with my response.
The reason why I am posting my comments for the first time is because I really enjoy and respect crooksandliars.com.
I do believe their is a "political" sickness in the US and Obama and blogs like crooksandliars.com are the cure....
However when crooksandliars.com post opinions about prop 13, that I believe is wrong. I just felt compelled to speak up. To address what I believe to be true and correct (ofcourse from my perspective).
Thank you for letting me post my comments. And I am must admit I am enjoying this discourse. Peace, love and responsible capitalism. It's all good.
The ballot measure set real estate property value for tax purposes at 1975–1976 market value, limited real estate taxes to 1 percent of that value, limited tax increases to 2 percent per year for continuing owners....
The government, whether it's state or Federal, needs revenue to operate; that revenue is derived from taxes. Why do people see that as a bad thing? We all want the services government provides; education, roads, etc., but they can't be provided for free?
You need revenue, raise taxes....it's that simple. Prop 13 in California needs to be repealed.
I don;t think this is true, unless I'm reading it wrong.
"The ballot measure set real estate property value for tax purposes at 1975–1976 market value"
Prop 13 sets market value on the tax year a property was transferred or sold. So if I bought a house in 2007, my property taxes is based on "market value" as of 2007 irregardless of the sales price, thereafter it grows by a maximum CPI of 2.9% a year.
All Prop 13 does is protect the homeowners from spikes in property taxes every year due to market conditions and fixes the property taxes based on CPI with a cap of 2.9%.
Let me give you an example of how great this is for Retail shopping Center Developers (me included). Most tenants for example your local coffee shop pays a minimum rent plus their portion of common area charges. Or triple net charges on top of their minimum rents, which includes a portion of the Buildings property taxes. Unless the developer sells his business, the cost of the triple net should grow by no more than 3% on average, assuming all things are equal. Now, let's subject the property taxes to market fluctuations every year, then imagine how much rent the coffee shop owner will have to pay? imagine therefore what it would do to inflationary pressures. Imagine what it would do to a simple cost of a cup of coffee.
I hope that makes sense. I'm trying to boil it down as simple as possible.
without having to be taxed on said speculation. It does nothing for the actual homeowners, in fact most of the beneficiaries are large commercial real estate owners.
This is not true because LARGE commercial real estate developers / owners pass the cost of property taxes to their respective tenants via triple net charges in the tenants lease agreements (this is standard commercial leasing practice). Thus the LARGE commercial real estate developers are not directly effected property tax increases. They are however indirectly effected because it limits the amount of rents that can be affordable to tenants should property taxes rises to high. I know I'm a part owner/member of a SMALL commercial real estate company.
..http://www.youtube.com/watch?v=zDAmPIq29ro
The property tax on a California property does not rise unless and until it is sold. So people who live in their homes for 20, 30 years never pay more in taxes than the year they bought the house. No one wants older people to have to sell their homes because they can't afford the taxes, but the expenses to run a state do not remain static for decades! It is no wonder California is headed for doom because of this situation, which has persisted for decades. It's just one example of how schools, government, roads, etc., are social programs that must be funded in common by taxpayers.
The GOP has been singing the tax-cut siren's call steadily since 1978 and all across the country. Worse, people have been answering their call to shoot our society in both feet with a shotgun. The problem is that the damage doesn't show up for a few years and most people don't seem to have the vision and/or attention to link the effect to the cause; even so-called Democratic politicians have not stepped up to explain this to the people so on it goes.
Losing your house because the property tax rises exponentially is a problem that ought to be addressed. Probably the best way would be to keep the current Prop-13 property tax scheme for personal property only—business property should not receive this tax windfall—and augment it with a progressive-rated local-level income tax. Maybe personal property that benefits from the frozen tax rate could incur a tax lien that would only come due when the property is sold. People would get to keep their homes but ultimately they would have to pay their share.
One little bit of information that no one seems to recognize is that the State of California's tax revenue is NOT directly effected by Prop 13.
Counties predominantly collect their tax revenues from Property taxes, which is restricted by Prop 13.
The state gets its revenues from personal and business incomes, sales taxes, fees charged, not from property taxes.
Again, the bulk of property taxes, restricted by Prop 13, goes to the counties and redistributed to the cities within the counties. NOT TO THE STATE of California.
Therefore, I don't see how the states financial crisis was the result of Prop 13.
One of the bigger local governmental costs is usually k-12 education. With the passage of prop 13, that cost was shifted to the state; suddenly the state budget had to absorb a huge cost (currently around 30% of the state budget). Thus, although the revenue stopped by Prop 13 were at the local level, they have huge impact on state funding. The same thing happened in Oregon in 1990(?); property taxes were whacked and the state had to shift funds to k-12 schools (this was mandated by the proposal) so everything else the state did had to be cut massively.
The other effects of Prop 13 made it extremely to raise state and local taxes. Prop 13 is the problem and short-sighted citizens and cowardly politicians have let it slowly bleed California dry.
please jump to this link:
http://www.lao.ca.gov/2006/cal_facts/2006_cal...
PLease compare 2006/2007 general fund spending vs 1966/1967
Notice that K-12 spending as a percentage has remained the same, where as Criminal Justice and Health and Human sevices has jumped; most likely due to public policy changes to these areas effecting the state budget demands.
I don't see how Prop 13 created the states cash problems based on teh link above?
Blaming Prop 13 is simplistic. I would expect better from readers of this blog. About the only defensible argument that has been made is that it's not fair, but as always, what's fair for you may not be fair for me. Do first-time home buyers pay more in property tax than people like me, who have owned for 40 years? Yes. Is that unfair? Maybe. Would you consider it *more* fair if I had been forced to sell my house because I could not afford the taxes at some point? (And BTW Anais at 5:55, taxes do go up - I can show you my bills.)
The state is in a financial mess for many reasons. I submit that the 2/3s vote required to pass a budget is a lot more important than whether property taxes are too low. I submit that our economy is subject to booms and busts more than most states. Etc. Blaming Prop 13 is a copout.
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