Cautious fiscal conservatives look at the glass both half empty, as pessimists, and half full, as optimists. However, for the purpose of budgeting you must always plan for a worst case scenario.
The Cutting Edge a talk show was the only independent media to cover the Arnold Express when two huge green busses rolled into Tri-City Park in Placentia on July 26, 2006. Printed on the side of the bus it read: “protecting the California dream.” I wonder what we should label the California dream today.
After being introduced by Anaheim Mayor Curt Pringle the Governor, standing among 200 Republicans in his white short sleeve shirt, boasted about his achievements since the Recall of Governor Davis. Workers Comp reform, reversal of the massive VLF fees and reduction of our structural debt. Arnold boasted of having reduced Governor Davis’s $15.5 billion dollar deficit to $3.5 billion in the past two and a half years since taking office. You can view this 38 minute coverage by going to our Archives on the home page and scrolling down until you find “the Arnold Express 2006. ” www.cuttingedge-atalkshow.com
Here we are two years later. What went wrong? Revenues are up? So is the deficit.
Fast forward to a press relase that I just received which reads in part:
“The Governor’s 2008-09 budget proposal is a responsible plan that solves the state’s long-term budget problem, fully funds education, keeps our parks open and keeps prisoners behind bars – without tax increases.
However, the state is facing an extremely tough budget year. California’s economy is the most diverse in the nation and that diversity has kept it strong. But with the subprime mortgage crisis and the stalled national economy revenues have flattened out.
This downturn highlights the fact that California’s budget system is in dire need of reform. Fluctuating tax revenue and auto-pilot spending, which dictates approximately 90 percent of state expenditures, have created more than a decade of unpredictable and unstable budget cycles which benefit no one.
Despite Governor Schwarzenegger’s efforts to increase rainy day funds to historic levels, slowing the growth in spending on new ongoing programs, and championing budget reform measures, California still faces a $17 billion budget gap in the 2008-2009 budget year.
California needs budget reform to make this budget work now and to fix the systemic problems that are so damaging. The good news is that this roller-coaster revenue problem has a simple solution: If we save money during the above-average years we will have enough money for the below-average years.
This is where the California Lottery comes in. Under the Governor’s budget plan California will modernize its underperforming Lottery. The state will then use the $15 billion in revenue that will generate over the next three years to establish a rainy day fund to be used in tough budget years like this one.
This plan will require voter approval at the ballot in November.”
Gilbert comments. “Auto pilot spending.” Doesn’t that include all the billion dollar Bond Measures that were approved? Someone, PLEASE, cut up our legislator’s credit cards. It’s great. Long after you are termed out of office our grandkids will be stuck paying off those debts.
Sell the lottery. Another attempt to put a Band-Aid on the self inflicted wound called our current deficit.
Looking forward to reader reaction to the governor’s press release as well as his comments at Tri City Park exactly two years ago.
Larry,
Once again we reach that portion of the program where I remind viewers that the majority party in the sates legislature has control over the budget of the state.
I wouldn’t want to sell off public assets, “futures” or more bonds at this time, because I have no faith they wont squander those funds. Fact of the matter is that, yes we have a very constrained system of spending in this state and most of the budget is not controlled directly by those legislators, but the real problem is they are patently irresponsible in the way they have spent our money.
Memo to Americans from the Ultra-Rich:
We have conned you for years in order to place in effect a system by which we can destroy the middle class and create a labor pool of people so desperate to survive you will submit to any form of exploitation we choose to impose upon you. We have done this because the level of our greed will not support the existence of a middle class. We will not be satisfied until we possess, quite literally, everything — including the labor of your bodies and minds in our service.
If you will not consent to accepting slave wages as sufficient remuneration for your services to us, we will abandon you and let you starve. There are plenty of already starving people on this planet whom we can exploit, and who will gladly perform as our wage slaves for the privilege of being permitted to eat.
You have been credulous fools for decades now, and we are very, very close to having you precisely where we want you. We doubt you have the strength of character or of will to prevent us from owning the entire planet and forcing the world’s population into granting us what we believe we deserve — concentration of all wealth and power into our hands and your permanent subjugation in service to our desire for the infinite luxuries you will produce for our pleasure.
Vote Republican.”
#2 –
Awesome. That just about sums it up. Wait. I can’t tell. I hope you’re not being sarcastic because it’s so dead-on accurate!
SMS
While you may not believe it, the link tells the story of how the Democrats are now the party of the rich. I know it’s hard to believe, and wasn’t widely reported by the media, but it does seem to be true.
As author Michael Franc explains
http://www.heritage.org/Press/Commentary/ed110607a.cfm
Democrats now control the majority of the nation’s wealthiest congressional jurisdictions. More than half of the wealthiest households are concentrated in the 18 states where Democrats control both Senate seats.
This new political demography holds true in the House of Representatives, where the leadership of each party hails from different worlds. Nancy Pelosi, Democratic leader of the House of Representatives, represents one of America’s wealthiest regions. Her San Francisco district has more than 43,700 high-end households. Fewer than 7,000 households in the western Ohio district of House Republican leader John Boehner enjoy this level of affluence.
Instead of the old tired lines we hear from the party hacks, let’s try to be responsible rather than dogmatic. It is after all OUR money and OUR government, we should at least demand they are responsible. I really don’t care if their name is followed by an R or a D.
Anon.
Thank you for expressing your desire to be taken care of by government (or those who have taken risks in the private sector). They had that system in Russia before we visited a few years ago. It was called communism.
If you are unhappy with your situation do something about it rather than simply blame the minority party.
During dinner with a Russian family in St. Petersburg around five years ago I asked what they enjoyed most about their new found freedom. The mother of the host couple, who lives with them in this six story tenement building, through her son-in law and an interpreter, said that while it was tough making the adjustment after having the government meet all their needs they still relish having freedom. After Gorbachev brought “perestroika” and the break up of communism cicrca 1990 many were having a difficult time adjusting.
You can become whatever you wish under our system. As I utilize Google as my search engine of choice perhaps you might check out Google founders Larry Page and Sergey Brin or Bill Gates and Paul Allen of Microsoft.
Stop crying about being conned. There are hundreds of million on this planet that would trade places with you in a heartbeat.
Carl,
as has been mentioned here on many occasions, you have to follow the money.
McCain plays to a very small/rich audience as his fundraisers. Obama gets his money from many small donors. Maybe in this particular case of who to vote for president, we should pay attention to details like that.
I have no doubt that speaker pelosi and senators boxer and feinstein are all part of the very wealthy and should be challenged on their decisions.
Both parties have rich members who don’t give a damn about “representing” anyone except their own personal intersts.
Umm,
Perhaps we never actually eliminated the structural deficit when we were borrowing money and dummying up budgets with one-time fixes.
It appears that all we did was add to our interest payments without ever, like, fixing the problems.
But that’s OK, we’ll try to fool the finance markets into lending us money one more time, this time by mortgaging the lottery. It’s not like these Wall Street guys will ever catch on to the problem of making stated income loans to people who can’t pay them back,
And if we just eliminated redevelopment, all of our woes would end immediately, and we would be in the black once again.
Anon.
As I had a morning meeting my initial reply was incomplete. Most Americans who feel they are underpaid should stop feeling sorry for themselves.
From the Internet, while we can still access this type of data, is the following:
“Then there’s poverty, American Style. Via Bill Hobbs comes this 2004 report:
Forty-six percent of all poor households actually own their own homes. The average home owned by persons classified as poor by the Census Bureau is a three-bedroom house with one-and-a-half baths, a garage, and a porch or patio.
Seventy-six percent of poor households have air conditioning. By contrast, 30 years ago, only 36 percent of the entire U.S. population enjoyed air conditioning.
Only 6 percent of poor households are overcrowded. More than two-thirds have more than two rooms per person.
The average poor American has more living space than the average individual living in Paris, London, Vienna, Athens, and other cities throughout Europe. (These comparisons are to the average citizens in foreign countries, not to those classified as poor.)
Nearly three-quarters of poor households own a car; 30 percent own two or more cars.
Ninety-seven percent of poor households have a color television; over half own two or more color televisions.
Seventy-eight percent have a VCR or DVD player; 62 percent have cable or satellite TV reception.
Seventy-three percent own microwave ovens, more than half have a stereo, and a third have an automatic dishwasher.
There’s something wrong with our definition of poverty when the majority of poor people own a car, 2 TV’s, and a VCR or DVD player.
And it isn’t just material goods that set poverty, American Style apart from the world. The report goes on to say that 70% of families classified as poor were able to meet all essential expenses last year, including medical care.”
“Slave wages?” Have you ever visited a third world country? We have, and count our blessings for being able to improve our standard of living in the USA where we started without the infamous pot or window to throw it out of. If you are not satisfied with your wages than let me suggest going into business for yourself as we did. It’s called “risk reward.”
Denizen of the Gilbertocracy, whomever you are.
Your bottom line,
“And if we just eliminated redevelopment, all of our woes would end immediately, and we would be in the black once again”
is a strong indicator that you are part of the “entitlement” generation. When we have HOA CC&R’s relating to upkeep of our property or we take that responsibility personally and renovate or modernize, (for most), our biggest investment, namely our homes, you prefer taking property away from honest taxpaying small business to create a large pad for the next big-box store or auto dealership in the neighborhood.
There are valid areas in many inner cities requiring redevelopment. When we can all agree on a set of standard “metrics” so that we all read off the same page as to what constitutes “blight” then I will have a different response. Our issue is when city redevelopment agencies are greedy for increased or new tax revenues and have no concern of the impact their police actions have on those unable to defend themselves. You know, the poor and minorities that cannot afford effective legal representation to protect their major investment in this country.
Anon.
We are starting to drift off course. As the ship of state, California, heads toward a huge iceberg, what solutions do you propose to close our $17 billion dollar deficit?
Show all of us your leadership skills so that statewide elected officials reading this blog can be educated. And I can report to you that they do in fact read all of the OC blogs.
Sorry to correct the misinformation. I have read the website information that is quoted. It illustrates a tremendous lack of understanding of a very complex process here in sacramento. In point of fact, the process that Grey Davis confronted (not created by either party but is more a result of Prop 13) has existed and been compounded over the 30 years plus that the state has labored under the constraints of prop 13. I know that you will criticize that comment but the reality is the reality. An example: look at what police and fire staffing averaged in 1972 and what they average now. Unfortunately, some people believe that these folks should be paid in 1972 dollars and not in 2008 dollars without an increase in the revenue stream that pays for such municipal services. One cannot have it both ways.
In point of fact, the deficit rollover last July (2007) was $8 billion. That had increased, by a variety of factors, to $10 billion in November 2007 and adjusted to $12 billion in December 2007 (Governors Office/Department of Finance). The independent Office of the Legislative Analyst estimated that the current year deficit (2007/2008) was more likely $14-16 billion in December 2007. The Legislature, led by both Democrats and Republicans, cut the current year deficit to $8 billion in January/February 2008. That left a rollover of $8billion for budget year 2008/2009 before you have even constructed, let alone passed, a state budget. In large part, deficit growth is a direct result of the blowup of the housing market. The problem is magnified.
It very much is like compounding interest.
Much of this information is contained on the reports published by the Governors Office, the State Department of Finance, the Legislative Analyst’s Office, and the Legislative hearings that are archived on the CalChannel.
It is frustrating to read comments as posted on aforementioned website that illustrate a serious lack of understanding of a very difficult and complex process.
No, Larry,
I would never favor a redevelopment agency taking property from anyone via eminent domain for economic development, and I can’t think of an example locally where an RDA has done that.
Nor am I a big fan of auto malls or big boxes, or the bidding processes that cities engage in to see who can offer the worst deal for their taxpayers. Both are going to be far less interesting in a world where we have run out of the cheapest oil and now have to budget our energy use differently.
I just like to tease you a little.
The first rule of the Gilbertocracy is “Don’t take yourself too seriously.”
Schwarzeneggar Centrist Republican
Oh! Now we interject Howard Jarvis’s Prop 13 into the debate.
As even you admit that was 30 years ago when 65% of CA voters approved that Ballot Measure.
We were the only news media in Placentia when we all heard Arnold state that he cut the deficit to $3.5 billion. Prop 13 was in effect all during that deficit reduction. Therefore, it has zero bearing on this post.
Schwarzeneggar Centrist Republican
Those of us living in Orange County have you at a disadvantage. That is unless you read the OC Register. Following are your words,not mine:
“look at what police and fire staffing averaged in 1972 and what they average now. Unfortunately, some people believe that these folks should be paid in 1972 dollars and not in 2008 dollars without an increase in the revenue stream that pays for such municipal services. One cannot have it both ways.”
Do you have any idea what OCSD deputies earn when their overtime is added?
Perhaps you should get your hands on a copy of the Sunday June 15th Register where the story “primed for overtime” goes into great detail of our sheriff’s department deputies salaries.. “In 2007 most of the sworn officers earned over $100,000. More than 100 earned over $150,000.” While I will not engage in a debate over, overtime, retirement and pensions, that is not exactly “chump change.”
Denizen of the Gilbertocracy
Thank you for setting me straight. The first rule of the Gilbertocracy is “Don’t take yourself too seriously.”
I can “lighten up” as evidenced by my recent post of Art Pedroza’s new hydrogen car.
Larry #8 –
Sure the poor have material goods. Not everybody is poor all the time as wages have declined more in recent years, and not everything that was once expensive still is; a DVD player has very poor value since many are now about $30 brand new; that’s much cheaper than a VCR at this point in its product life. Also, what about used equipment? For instance, I always built my computers. It’s not like electronics are worth much after they’re purchased.
As far as cars, well, there are people in my apartment building who are poorer who have more cars than I do – I have two and my neighbors have three. Their secret? They have USED CARS (well I do too, but theirs are just older than dirt (lol)! It’s not like poor people are driving around in Bentleys.
I see your point that as a nation we have more wealth than other nations, but everything is relative. When the guy next door has a ’09 Vette and you have an ’85 Carolla, well…
SMS
Sarah.
There is a major difference between our “needs” and our “wants.” How many billions go to bed at night having missed a daily meal? Why are people lining up and, in some cases, waiting for years to legally enter the USA?
With regard to automobiles. Our maximum posted speed limit in CA is 70 or 75mph. An ’85 Corolla
can get you from point A to point B just as safely and legally as the $72,000 Z06 Corvette with 500 hp.
It may be old hat but America is the land of opportunity. Simply look at Obama
Larry –
Granted, but exaggerated. BILLIONS go hungry? If that’s the case, how about we look at countries like China that are overpopulating our planet. Americans are only 10% of the world population. We’re hardly over-consuming when you look at the grand scheme of things, even if we tend to do so per capita. THAT is why we have (read: had) a middle class.
SMS
Hey Larry, I’m posting this here as you and Sarah seem to be the more budget-concious of the bloggers …
So Measure G passed and it’s ancient history now, but the money is coming now and how it’s used will be fresh news … that is, if news gets out. SAUSD is seeking applicants for the Bond Oversite Committee, applications can be got from the SAUSD website:
The Public Information Office will accept applications until Friday, June 27, 2008, at 4:30 p.m. Those wishing to apply to serve on the committee should call 714-558-5555 or email pioinfo@sausd.usfor an application, which can be downloaded from the website http://www.sausd.us,/Facilities page. The Public Information Office is located at 1601 E. Chestnut Ave., Santa Ana, CA 92701. The fax number is 714-558-5812.
It would be cool to have one of the OJBloggers (or an associate} on that commitee. Guys?? … (that’s gender neutral guys, Sarah).
Sarah.
China recognized their exloding population many years ago. That is why they instituted their “one child”(one birth in case you have twins) policy in 1979. If you do have more than the limit you will receive a fine and should you work for the government you will lose your job. We were told that they have reduced their population by 400 million with this program. Farmers are permitted to have two.
Does that make you feel better? We were told they put these children up for adoption. If you buy that statement.
SMS. As the world population is over 6 billion, I would argue that perhaps two or three billion do go hungry in the third world nations. Would you prefer my saying several hundred million as if that’s a smaller number?
SAHS Teacher.
Thank you for the invite. However, I already have more on my plate than I can handle. Further, I live in Mission Viejo and do not get up to Santa Ana as often as I would like to oversee what is happening in your district. In fact at our city council meeting last night I spoke on our current Recall election in the Capistrano Unified School District where I should devote more of my time.
Larry –
First of all, the damage was already done in China in 1979. It’ll take decades to reverse it… oh and did I mention they have more cars (i.e. need more oil) now?
Secondly, ‘852 million people across the world are hungry, up from 842 million a year ago,’ according to worldhungeryear.org. That’s not multiple billions as you opined.
SMS
PS: #19 – I’m not that picky. I was mad at Vern because he ignored me after he REQUESTED my input.
Larry
an interesting article by Peter Shrag a well respected editorial writer here in Sacramento-with gold plated credentials-should give you some food for thought though I wont hold my breath that it will change your mind. It does present the range of thinking that is occurring up and down the state on Prop 13. here is the article-with thanks to the California Progress Report:
Schrag: Prop 13 Breaks for Corporations Have Cost Counties, Cities, and Local Schools Billions
By Peter Schrag
Like Howard Jarvis 30 years ago, the latter-day defenders of Proposition 13 talk almost entirely about the blessings that the cap on property taxes has bestowed on homeowners.
What they rarely mention – and with good reason – is the windfall that went to California corporations and the billions that has cost counties, cities and local schools.
The windfall was either an unintended consequence of the sloppily drafted homeowner rescue measure that Howard Jarvis and his sometime partner Paul Gann cooked up, or it was a slimy trick. Either way, it’s long past time that the system by which California assesses large commercial property and the rate at which it’s taxed are revised.
Currently, in the words of Lenny Goldberg of the liberal California Tax Reform Association, the system is “legally irrational.” It’s “more loophole than tax.” It taxes competitors and landowners unfairly, promotes land speculation and sprawl and fails to tax the windfall in property values brought by public infrastructure investment and the increase in neighboring land values.
And because commercial property isn’t taxed at its real value, the system doesn’t encourage economically realistic use of land – it fails to encourage infill – and shifts a growing part of the tax burden to homeowners.
According to Goldberg’s analysis of state Board of Equalization numbers, home owner-occupied property represented 32 percent of all property assessments when Property 13 was passed. It’s now close to 40 percent.
Through the high-tech boom in the same years, when Silicon Valley industry was going through the roof, the assessed value of single-family homes and condos in Santa Clara County went from 50 percent (in 1979-80) to roughly 68 percent of the total; the value of all other property – including the multibillion-dollar electronics industry – declined from 50 percent to 32 percent.
Meantime, because new businesses are assessed at current value while their older competitors are taxed on a lower base, the new businesses are at a competitive disadvantage from Day One. The property value gains of business success are not taxed, even as the beginner has to pay a premium, both in high taxes and fees.
The solution, long discussed by Goldberg and other tax reformers, but never given a fair shot, is the split roll. It would leave owner-occupied residential property untouched but put the taxation of business property on a more realistic basis. It would require periodic reassessment corresponding to turnover in partners or stock ownership of business property, title to which rarely turns over.
The defenders of the current system, whose predecessors never mentioned breaks for banks, oil refineries, railroads, utilities, office towers and hotels when they promoted Proposition 13, now say it would force up rents on small enterprises and drive out or discourage business.
But the owners of rental property never lowered rents when they got their big break 30 years ago. The response after 1978 was a wavelet of local rent control ordinances that the Jarvis Taxpayers Association, always the faithful friend of renters, tried vainly to get rid of with Proposition 98 earlier this month. Rents are market driven; if they didn’t go down in 1978, why would they necessarily go up now?
Equally important, according to the Council on State Taxation in California, both the business share of the overall state and local tax burden and the overall tax on business as a percentage of gross state product are below the national average. The share of the burden here is lower than in Texas, Arizona or Nevada, the places that the chicken-littles of California business always say our jobs are fleeing to. Any reasonable reassessment would still not bring California’s business tax burden up to the national average.
Aware that their chances with the Legislature are nil, Goldberg and a few collaborators are now trying to lay the groundwork for a ballot measure either in 2010 or in 2012.
They know they don’t have a prayer unless they lay a lot of groundwork, particularly in informing Californians how much better their local services might be if they could get their local behemoths – many already benefiting from fat loopholes – to pony up their fair share of property taxes. It might also put both private and government land use decisions on an economically and socially more reasonable basis.
It would end the frantic pursuit by local entities of shopping malls and auto malls whose sales taxes now represent the only net gain from new development. That might in turn open the door slightly to balanced planning of housing, job-creating industry, transportation and retail.
The split roll doesn’t come close to addressing all of California’s revenue problems: a service sector, now dominating the economy, that’s exempt from sales taxes; gas taxes that don’t come close to paying for transportation infrastructure or maintenance; a gridlock-inducing supermajority requirement for enacting budgets and raising (but not lowering) taxes; and more.
Still, even if the split-roll idea fails, it might start a conversation about taxes and services in California that’s 30 years overdue.
Peter Schrag is the former editorial page editor of the Sacramento Bee. This article is published with his permission.
SMS.
OK. 852 MILLION in the world who go to bed hungry, based on your research, is still a sizeable number.
Anon.
Those who live in the USA shold stop complaining about being “exploited and starving.”
Not happy? Quit your job, if you are fortunate enough to have one and move on. You do live in a “free” country!
And the latest news from Dan Walters at the Sac Bee:
“Schwarzenegger says the state has a $15.2 billion deficit. It’s about 15 percent of general fund spending. Closing it all with new taxes – unless Proposition 98 were to be suspended – would require $25 billion to $30 billion in new levies of some kind. It would be the equivalent of virtually doubling state sales taxes or increasing personal income taxes by about 50 percent.”
Juice readers. When do you think the budget will be approved by our legislature?
Which of the 32 Republicans in the State Assembly do you think will break ranks and support Arnold?
If they ratchet up the state sales tax let’s see who comes closest to the percentage increase.
Note: We were recently told that due to the increase in gasoline prices the state has enjoyed a one billion dollar windfall.
To Schwarzeneggar Centrist Republican
As I read the Sac Bee on line I am familiar with Peter. That said, I do not necessarily agree with his opinions. However, my favorite editorial writer for that newspaper is Dan Walters whom we interviewed on the Cutting Edge a few years ago.
Slick attempt. Intoducing Prop 13 that was never mentioned in my post or by our governor.
As a Republican who attended the Tri City park event to cover Arnold two years ago we witnessed his taking credit for reducing governor Davis’s budget deficit as stated in the story. Let me suggest you follow the words of wisdom that I frequently print. “Trust, but verify.” Please do watch the 38 minute Cutting Edge-a talk show video. Somewhere around eight minutes into that program you can see and hear Arnold discuss the deficit with your own ears. The GOP is probably not happy that we covered, than archived, his appearance.
http://www.cuttingedge-atalkshow.com
Back to the question. As state revenues are up over the past few years how did our $3.5 billion deficit (in 2006) grow to $17 billion today? Perhaps you can tackle that question.
To Schwarzeneggar Centrist Republican
Not ducking your reference to Prop 13 but the latest data I can find shows that 57% of Californians still support that tax cap TODAY!
The CA Progress Report includes last weeks Field Poll on Prop 13. “The results show that by a 57% to 23.4% margin, registered voters would pass Prop 13 again.”
SMS. Are you saying that Chinese people, due to their 1.3 billion population, must continue to travel by rickshaw, peddycabs and bicycles? It’s OK for Americans to own multiple cars per family but as a strong supporter of freedom you wish to deny them the same priviledges?
…the latest data I can find shows that 57% of Californians still support that tax cap TODAY!
Unfortunately you’re right about that Gilbert. I was gonna do a “30 Years in the Shadow of Prop. 13” post back on the anniversary a few weeks back, but once I started researching the post and saw how popular 13 still was, I said to myself, “Choose your battles, Nelson.”
Smart move brother Vern.
One would expect that most Americans take their pay check, look at their fixed financial obligations,than decide what bills we can cover this month before looking at increases or discretionary spending. Hopefully they limit use of their credit cards so that they can pay off those charges each month to avoid excessive carrying charges.
Not so for some in Sacramento who enjoy spending OPM. There comes a time when private citizens do not spend more than they earn. Sadly there are those who are forced to file for Chapter 11 bankruptcy protection due to overextending their revenue stream. Valejo, CA representing what can happen in any city.
Can someone please tell our elected officials to operate within the same financial planning as those who put them into office?
Simply stated live within your means. Floating Bond debts adds to the current fixed obligations, as stated in the press release, that future generations will be stuck with.
As one who grew up in Orange County (when I-5 was a 4 lane freeway), when there was orange trees and Mission Viejo didnt exist, when the predominant political figures were Walter Knott, Carl (I never met a gay/lesbian teacher that I liked or a gold mine that I didnt want to buy) Karcher, John Brigg, John Schmitz of Santa Ana College and John Birch Society fame (and father of Mary Kay Schmitz LeTourneau of teacher-student sex games), Bill Dannemeyer, Dick O’Neill, Dick Hanna, and on and on. As far as Placentia goes, I am intimately familiar with Placentia having grown up there. My familiy was involved in Democratic party politics for many years with both city council and mayoral positions of Placentia, the Placentia Unified School District (now PYLUSD), the North Orange County Community College Board, family members of the OC Bar Association, and members of the Orange County Judiciary. So I think I know a little about Orange County.
Regarding Shraggs article, and my comments, you just dont get it, Larry. Nothing personal. I am intimately familiar with the recent California Poll on Prop 13. What it notes and you dont address is the numerous loopholes in Prop 13 that have been identified (as they should be) and closed. While I know that you will disagree, the policy argument is a very fundamental one and must address the numerous deficiencies that Peter addresses in his article. As to Walters, I know Dan quite well. You would be surprised at his view of Shraggs article.
Maybe I will move back to Santa Ana and run against Carlos “the philandering Space Commander”
Bustamante for city council. As a moderate and thoughtful Centrist Republican, I certainly would need your support.
Schwarzeneggar Centrist Republican
Where to begin.
Here I thought the Prop 98/99 debate was off the table but you insist on analyzing Prop 13.
Think about the fear tactics used by the Prop 99 proponents stating that those living in rent controlled apartments and mobile homes would face massive rent increases if Prop 98 passed.
Now let’s shift gears to those early property owners who have owned their homes in CA for the past 30 years. Many of these families retired many years ago so their income is basically pensions, investments and savings if they have any. Tax limits of Prop 13 enabled them to retain their homes.
While I have my own opinion on the justification of Prop 13, which still enjoys favorable approval statewide, let me refer to two colleagues who are experts in this debate. They are Joel Fox and Jon Coupal, former and current presidents of the HJTA. Following is from their recent overview of Prop 13 on it’s 30th anniversary.
“Despite Proposition 13’s initial tax cut, property tax revenue has been the most reliable of any tax revenue source in the state. It has not ebbed and flowed like the sales tax or, particularly, the income tax. California is currently facing a severe budget shortage because of the downturns in sales and income taxes coupled with legislative spending that exceeds revenue collection. However, because of the 2% yearly factor and change-of-ownership reassessments under Proposition 13, there has even been a steady increase of property tax dollars exceeding the inflation rate year in and year out.
That is true even in difficult economic times. Because most properties are taxed at acquisition value plus 2% yearly increases, a property’s value on the tax roll is usually much lower than current market value. So when the current market value drops, most properties, unless recently purchased, continue to pay the same taxes plus the 2% inflation increase. Property tax revenue in California counties has generally increased.
Since 1980, Los Angeles County’s property tax revenue has gone up by an average of 7% a year. Last year, the increase in revenue was over 9%. And even with the housing market taking a hit with the subprime loan crisis, officials indicate that the county will still show a positive property tax revenue flow of about 5% this year.”
Schwarzeneggar Centrist Republican
As you state knowing Dan Walters quite well perhaps you can ask him about our March 2004 interview with him in Newport Beach that you can view on the Cutting Edge-a talk show web site. Simply go to the Archive link on the home page and scroll down to “The CA Gold” link. http://www.cuttingedge-atalkshow.com
You might also ask him of his appearance at our MORR/CURE conferences on redevelopment abuses.
Larry
Every voter in California saw thru the sham that was prop 98. The numerous interviews done by the proponents of prop 98 faced one question: if you want to deal with rent control, why not put a ballot initiative together that deals with that issue alone instead of burying it deep in an arguement that was glaringly transparent in terms of what it would do to many residents in this state. Despite what you may think, the voters are in fact pretty knowledgeable and saw thru the sham of an arguement that both Fox and Coupal publicly made around the state on various shows. In addition to Fox/Coupal, the various spokespeople aligned with 98 came off badly on the various talkshows around the state.
With respect to those that benefited from the initial passage of Prop 13, I dont disagree with you in principle. Its the unintended consequences that plague Prop 13 (you continue not to address the loopholes for commercial property that are contained in Prop 13) that now are under scrutiny. Hence the increased scrutiny of Prop 13 here in Sacramento and around the state. Rest assured, I will agree with you that homeowners that benefited from prop 13 30 years ago should continue to benefit should they still be alive (my mother is one of those). However, those benefits should not pass to children of the original beneficiaries nor should commercial property be under the Prop 13 tent.
It will change-there is nothing you can do to stop it.
If they ratchet up the state sales tax let’s see who comes closest to the percentage increase.
Note: We were recently told that due to the increase in gasoline prices the state has enjoyed a one billion dollar windfall.
Larry: get a clue-gas taxes-despite what you were told, someone conveniently forgot to mention that state gas taxes do not go into the general fund and must be used for transportation infrastructure. Part of the problem with Prop 98 Education allocations is that when state revenues increase, the percentage allocation for prop 98 education dollars remains constant-the dollar allocation changes-example-10% of $10= $1; 10% of $20= $2. While we all know (both sides of the aisle) the constraints that prop 98 presents, the larger issue is that changing it will not happen-the California electorate has spoken on prop 98 education allocations and any change to that formula will not happen.
BTW, I forgot to mention to you: while Coupal is very knowledgeable, the reality is that here in Sacramento, he is viewed in much the same way that Grover Norquist is viewed: both fringe players. Changing the intent of Prop 13 will not happen-closing the loopholes that everyone (on both sides of the aisle) knows must be closed will be the focus of the effort. Niello (the only one that didnt buy into Norquist’s comedic effort in the Republican caucus last year) is spearheading the budget compromise. He is a much more pragmatic player and realizes the big picture than either Villines or Cogdill. There is a reason why neither one of them is on the Budget Conference Committee.
Schwarzeneggar Centrist Republican
Prop 98 Sham? What do you call Prop 99?
Keep your eyes on the news and wait to see what happens to those home and business owners in Baldwin Park/LA. Although I don’t have the exact count there are roughly 300 businesses and 200 homes that will be taken for Bisno Development LLC. under Baldwin Park’s redevelopment agency police powers. Ken Woods lost his business in 1990 when the city used their eminent domain powers. They suggested that Ken move to a new/safe location a few blocks away. Trusting the city Ken took out a loan for $125,000 to facilitate that relocation. Fast forward to today where the same redevelopment agency is threatening to take his business again. Ken recently testified in Sacramento about his ordeal.
Protecting Ken and his neighbors private property against a greedy “eminent domain” action was an honest effort on our part. Don’t be so quick to blow off that effort.
Larry Gilbert Chairman OC Prop 98 campaign
Larry, 98 and 99 were both shams OK! And most people knew it. Just, 98 was the dangerous sham. Fortunately the poison pill beat the Trojan horse.