SF Chronicle: California state budget drowning in red ink for next year

[marmar]

State budget drowning in red ink for next year
Wyatt Buchanan, Chronicle Sacramento Bureau

Thursday, November 19, 2009


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(11-19) 04:00 PST Sacramento -- California again is facing a mammoth budget deficit and the prospect of more severe cuts to state services, the nonpartisan Legislative Analyst's Office warned in a report released Wednesday.

Legislative Analyst Mac Taylor said the state will face a $20.7 billion deficit next year and that the Legislature and Gov. Arnold Schwarzenegger need to start work to fill that gap "as soon as possible." He also noted that many one-time fixes state leaders have relied on in the past to close deficits are not available. The state will face $20 billion annual deficits through 2015 if permanent fixes are not made, he warned.

The dire news comes only four months after lawmakers approved a controversial plan to close a $24 billion shortfall in the current fiscal year, which began July 1. That plan, signed by the governor on July 28, relied on state worker furloughs, partial closures of state parks, and funding cuts to the California State University and University of California systems and many health and welfare programs.

Another battle

The state's inability to realize some of the elements of its July plan, however, has contributed to the new deficit, Taylor said.

"Coming on the heels of a really monumental problem ... it's hard to imagine that we'd have as difficult a budget year coming up," Taylor said. ...........(more)

The complete piece is at: http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2009/11/19/MN3H1AMPFL.DTL&tsp=1

[lapfog_1]

1. Hey Arnie!!! OPEN THE BOOKS!!!

Asshole. Does anyone remember that phrase?

[gratuitous]

5. He didn't raise vehicle registration fees!

Otherwise Darrel Issa would cry. And nobody wants to see that.

[slackmaster]

2. They have to make deep cuts in spending, and I am afraid they lack the backbone to do it

Every day you read about brilliant ideas like banning certain large TV sets in the name of saving the planet. But the predictable unintended consequences of that are that anyone who wants one will buy it in another state in person or by mail order, and California will lose out on sales tax revenue.

Or the handgun ammunition restrictions that will take effect in February 2011 in the name of fighting crime. The result will be the same as the TV restrictions - No effect on crime, and a drop in revenue.

[tjwash]

3. Shitload of foreclosed properties out here that they are collecting no taxes on.

Technically, the banks that repossess the properties, are supposed to pay the property taxes on them, but, they don't. Couple that with Ah-Nold settling the enron debt for pennies on the dollar a few years ago (the REAL reason he was pushed on the people of California), and things like the defeat of the windfall profits tax on the oil companies, and we are sitting on a mountain of debt.

Raising taxes aint getting us out of this one either.

But hey...looks like Alex Spanos is gonna get his new stadium built!

(:puke:)

[slackmaster]

4. I did not know that, but it's not very much money and not a direct source of state revenue

Technically, the banks that repossess the properties, are supposed to pay the property taxes on them, but, they don't.

If that is true, the counties could simply put liens on the properties and force the back taxes to be paid whenever they are sold.

However, property tax does not go directly to the state. The connection is tenuous - money goes both ways. Property tax revenue is included in a lump-sum "Other" category (not under "Taxes") in the budget, and that is a very small line item compared to personal income tax, corporate taxes, and sales tax.

See Figure SUM-03 at http://www.ebudget.ca.gov/pdf/Enacted/BudgetSummary/SummaryCharts.pdf