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More on the California Divide

The Los Angeles Times, analyzing a poll they did with USC, notes certain divides in California, though a general agreement on pessimism. Cathleen Decker reports.
One always presumes a fair amount of communal thought in a state, even one this large. But apart from a shared disdain for the governor and the Legislature, there is hardly anything communal anymore in California politics.
I've said it here many times before, and I’ll say it again – the state needs to be split up.
"There are dozens of different Californias -- hundreds, demographically -- and every single one of those Californias thinks the rest of them are wrong about everything," said Dan Schnur, head of the Jesse M. Unruh Institute of Politics at USC, whose College of Letters, Arts and Sciences co-sponsored the poll with The Times.
Actually, the paper goes on to detail a noticeable split between the coastal area and in the inland area in various demographic and idealogical indicators.

I maintain that a if San Francisco and Los Angeles County, and the coastal counties between them, and perhaps a couple of others in the Bay Area were to split off from the rest of California, the remainder of California would be better off - either staying together, as one, or further dividing, perhaps with the areas being annexed to neighboring states. (Those states would not only gain some fine resources, but they wouldn't have their Senatorial representation diluted if the number of states remained at fifty, and they would have a larger House of Representatives presence.

Will it happen? Not without a miracle. Most likely, we're just going to continue to see California kill itself financially, and the would-be social engineers on the Left grow increasingly bitter as the rest of us fight to keep them from dragging the state too far into the cultural dump.

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California Constitutional Convention - Another Voice

Patrick Collins, director of the Claremont Institute's Golden State Center for State and Local Government, responded to a recent Los Angeles Times editorial by making the case that a California constitutional convention isn't likely to work. You can read it here.
Californians should not mistake a widely shared dislike of our political situation with shared agreement on what constitutes the common good.
I have written about this already. Just click on my California tag below. I agree that a convention isn't going to work. We need to split the state.

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Extension of Tax Credit for Homebuying

Once again, I am punished by my government for having bought my house when I did. Hey, on top of being punished for giving up my old car and buying a new one, I'm part of spreading the wealth.
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Lowering California’s Income Tax Rates?

Well, maybe. But there's a big catch.

Word was filtering out to the concerned public that a new tax plan for California was going to be proposed, and today was the day Governor Schwarzenegger formally unveiled it. I caught Eric Bailey’s initial report at LATimes.com, and I expect the article will be filled in with more details and quotes for tomorrow's print edition.
Under the proposal, the income tax would be flattened from the current half-dozen rates to just two - a 2.75% levy on income up to $56,000 for a married couple, and 6.5% for taxable income exceeding that threshold. Critics have attacked the proposal as a giveaway to the rich, with millionaires on average paying $109,000 less.
The fact the millionaires would be paying “$109,000 less” means they are currently paying hundreds of thousands of dollars now, on top of whatever federal income tax they are paying. But in reality, millionaires would still be paying a lot of that "$109,000 less" to the new tax...
To offset the reduction in income tax, the commission called for a revolutionary new tax for business and consumers.

The current retail sales and corporation taxes would be eliminated, replaced by a broader business tax that would tap practically every type of free enterprise, including service sector firms like lawyers and business consultants currently not hit by the sales tax.
This means that "millionaires" would be paying taxes on their use of lawyers, accountants, security, personal trainers, gardeners, drivers, plastic surgeons, consultants, etc.

Everyone would be paying taxes on things like theme park/sports/concert/movie tickets and other things that sales taxes haven't touched before.

As the article notes, the "selling point" is that this would bring stability to the state's revenue stream, but I'm not so sure it would. Also, labor unions, business groups, and even some of the people involved in the report have criticized the plan. All it takes to get something killed in California is union opposition.

A better way would be privatizing more of the functions that currently fall under the state government and going with user fees wherever possible.

One reasonable concern is that the income taxes will be raised back up and the new taxes will be kept in place as well, and perhaps increased. Currently, California not only has the personal income tax and business tax, but a high sales tax, a gasoline tax, property taxes, utility taxes, an extra tax on seven-figure income, and all sorts of other taxes in addition to fees and assessments.

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Downsize California?

Not to be confused with Billy Mays, Bill Maze has a real idea about how to deal with California, the "ungovernable" state. Gregor Washinski has the story in the Orange County Register.
Maze leads the group Downsize California Now that is preparing a ballot initiative for a two-state solution. According to their plans, 13 counties on the coast, ranging from Los Angeles to Marin, just north of San Francisco, would be split off and be named Coastal California, West California or whatever they please. The remaining 45 counties, including Orange County, would become the "real" California.
This is exactly what I have been calling for on this very blog.
The movement was formed at the end of last year, when angry farmers in Central Valley rallied against Proposition 2, a ballot measure banning the tight confinement of farm animals. Originally called "Citizens for Saving California Farming Industries," the non-profit group has grown into a broader platform for those who cherish limited government. They hope to see the two-state initiative on the ballot by November 2010.
Marriage and "divorce" on the same ballot? Could be.
Convincing Californians to vote for the division of their state will be a difficult task, though. A poll by the Field Research Corporation earlier this year found that 82 percent of registered voters opposed the idea of splitting California into an eastern and western state. Also, such a plan would require approval by the U.S. Congress.
Yes, and you can be sure that the unions and other socialist groups from Los Angeles and San Francisco will be running ads in opposition, claiming that children will be starved to death and, even worse, prevented from going to school. These groups don’t want to lose the tax money.
Since California became a state in 1850, there have been about 220 documented attempts to divide it, says Kevin Starr, a professor at USC and author of a multi-volume series on the history of California. "And none of them have gotten anywhere."
Maybe, just maybe, things will be different.
Rob Pierson oversees the petition drive at the headquarters of Downsize California Now in Fresno. After a successful secession, he explains, both states would hold a constitutional convention. The ideal California would feature a single-house legislature that would be in session only three months a year. Income taxes would be abolished and a balanced and an on-time budget would become mandatory.
Again, this is exactly the kind of thing I have been advocating. I hope this gets somewhere. Let the Leftists have their overregulation, overtaxation (they won't have a Prop 13), overspending, their sanctuary cities for illegal aliens, and gender confusion. They can have "any" two, three, four or more people getting marriage licenses. They won't have to be offended by those of us who resist such "progress".

Downsize California's website: http://downsizeca.org/
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California to Florida: Don't Become Us

If Florida isn't careful, it will become the next California, with people fleeing the state for lower taxes and less government. This is especially true because many people in Florida are refugees from California.

Take it from a Californian - don't become us!

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The Bigger Picture in California

Three pieces in the Los Angeles Times show why California is in trouble. Shane Goldmacher has an article on the latest tax increases.
While Californians are still feeling the sting of income and sales tax hikes signed into law earlier this year, now comes news that state tax authorities plan to take a little more from their pockets.

For only the second time in 30 years, the tax board is lowering the point where each tax bracket begins, bumping many people into a higher category. At the same time, officials are cutting back some deductions. Everyone will pay more, even people whose bracket or income doesn't change.
Great.

Meanwhile, columnist George Skelton enthuses about yet another group that claims to have the answers.
The bipartisan reform group California Forward has proposed a modest, reasonable and doable set of significant changes in how state and local governments operate.
We'll see.
There's no denying the problems: gridlock, perpetually late budgets, chronic deficits, IOUs, Sacramento raids on local coffers...
Don't forget high taxes and an environment hostile to business.
But these are some steps recommended unanimously by the California Forward's Leadership Council after 18 months of mulling:

Lower the Herculean hurdle for legislative passage of a state budget from a two-thirds majority to a simple majority. But retain the two-thirds requirement for tax increases.
Not sure how that would work. Sound like it would mean more borrowing, which necessitates more taxes.
For fiscal conservatives and anyone with common sense, require that unexpected spikes in tax revenue be spent only for one-time purposes, not to enhance programs in perpetuity.
This is toothless. The "one time" purpose every year could be "budget deficit", right?
Require the sponsor of any new spending proposal, whether in the Legislature or at the ballot box, to identify the funding source.
Good.
Budget for two years, rather than one, and regularly monitor the spending plan to watch for red ink.
Good.
Set clear goals for each program. If they're not met, change or chuck the program.
Good.
Prohibit the Legislature from raising taxes on a majority vote and calling them "fees."
Good.
Provide local governments with more control over their own fates by barring the state from raiding property taxes and other revenue.
Good.
Permit cities, counties and school districts to unite in some common endeavor, such as gang suppression, and pay for it with a tax increase passed by a simple majority of voters. Now it would require a two-thirds vote.
Keep the two-thirds requirement. Otherwise, we're screwed.
Relax term limits while reducing the overall time a person could spend in the Legislature.
Get rid of term limits.

Well, I’m not too impressed. I’ll say it again: 1) Split the state. 2) Make the legislature unicameral; reduce the number of legislators if possible. 3) Make the legislature a part-time "citizen" legislature.

Finally, there's this commentary from Ethan Rarick, director of the Robert T. Matsui Center for Politics and Public Service at UC Berkeley. He knocks Nevada's ads calling on California businesses to come to Nevada to escape taxation and regulations.
Relatively few businesses, once they're formed, pick up and move across state lines. Over the last several years, the nonpartisan Public Policy Institute of California has done exhaustive research trying to measure precisely how many jobs California has lost because of such moves, while also measuring the offsetting number we have gained from businesses moving into the state. The conclusion? The impact is tiny. The researchers found that the average annual job loss was only .06% of California's total employment. Just to be clear, that's not 6%; it's six one-hundredths of 1%.
The fact is, businesses are moving out, and how many are moving here from other states?. Others are choosing to expand or start up elsewhere instead of California. That study doesn't deal with business that would have added jobs in California, but didn't because of the business climate in California. Also, individuals who are good workers and citizens and entrepreneurs - people who produce more revenue for the system than they take - are leaving and being replaced by welfare/subsidy-dependent people.
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Gigantic Deficits

We should be ashamed for allowing it to get this bad. We need to stand up to Obama and the Democrats on this. We can't excuse Bush or Congressional Republicans, either. Deficit spending to fight wars and plagues and to respond to natural disasters is one thing, but we should not have allowed all of the federal spending that we have. We need to place fiscal responsibility ahead of promises of goodies.
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Repairing the Golden State?

Repair California is a group that wants a new state constitution - because they don't think a state with San Francisco is Leftist enough. This editorial from the Los Angeles Times discusses the issue, including quoting Los Angeles Mayor Antonio Villaraigosa (fka Tony Villar):
"A small group of extremists can hold the government hostage,"
Well, sure, if they are all duly elected to office. All it takes is a few dozen of them to be elected.

But who are the extremists? Those who say we ware taxed enough already, or those who want to raise taxes more in an overtaxed state? People who believe parents have the responsibility to raise their own children, or people who think the village should be doing it? People who think that there are men and women, or people who think these are largely artificial social constructs? People who believe the people should decide how marriage licenses are issued, or the people who think that courts should forcefully neuter state marriage licensing?
"I've always believed that term limits are a function of demagoguery."
I don't support term limits. They seem to give lobbyists more power.
"Proposition 13 has been a sacred cow. But you know, it's time to look at Proposition 13."
Tell you what- you can get rid of Prop 13 if you replace it with someone else that will prevent people from being taxed out of their homes and that will keep other taxes from being raised too high.

And why is it that people who bash Prop 13 seem to favor rent control? The government should be able to tax us out of our homes, but landlords should not be able to raise rent as the market will allow? This combination will result in small-time property owners losing their properties.

This whole "California needs a new constitution" business is fueled by two darling Leftist issues:

1) Voter rejection of some tax hikes/extensions.
2) Voter rejection of the state judiciary neutering our marriage licensing.


That's it. Because we voted "YES!" on Proposition 8, and "NO!" more recently on Prop1A, these people say we need a new constitution. Talk about crybabies.

It is interesting that the editorial doesn't mention Citizens For California Reform.  This group may be on to something.

It would also help if we were a Right to Work state.

How about this - you can come up with a new constitution if, at the same time, some of the counties can leave the state. Make secession easier - for counties that want to leave the state, for cities that want to leave a county, and for neighborhoods that want to leave a city.

That way, you can have your high-tax socialism, your lousy public transit, your sanctuary cities, your bloated-from-top-to-bottom state government, your overregulation, your restrictive gun laws, your lenient treatment of criminals, your racial quotas, and your gender confusion social engineering. All of us "extremists" who value masculinity and femininity, economic liberty, a business-friendly environment, protection of citizens, and despise racism will be out of your hair. But then, so will our money, which you just can't allow.

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LAUSD Has a Quite the Appetite

People living in the Los Angeles Unified School District, in addition to federal income taxes and gasoline taxes, are paying state income and gas taxes, utility taxes, a sales tax just shy of 10%, and property taxes... and various other fees and assessments.  Now, the LAUSD wants to sharply raise their property taxes.  Howard Blume has the Los Angeles Times article.
The district is allowed to raise taxes under little-known legal protections for bond holders. In essence, if revenues from property taxes can't cover installment payments for bond debt, L.A. Unified can raise tax rates, even if they rise above past projections.

The current rate is about $123 per $100,000 of assessed value. That's actually lower than the original projections, but the good news ends there.

Officials wouldn't reveal estimates for next year but, when pressed, said they expected rates above $200 by 2012. In an interview, L.A. schools Supt. Ramon C. Cortines mentioned a rate of $207, though he didn't specify the year.

For a home worth the current Los Angeles County median assessed value of $325,300, the difference, using Cortines' figure, would be about $275. For a $700,000 home, the rise would probably exceed $550, for a total bond tax bill of about $1,450.
Drip... drip... drip...
Under the $20.1-billion construction program, 80 new schools have been built, with 51 more on the way, and thousands of others have been repaired and modernized.
Guess what, though?  Enrollment is down.
The increasing tax rates could also spell trouble for L.A. Unified's nascent effort to put a different kind of property tax before voters. A parcel tax could be used to pay for ongoing expenses, such as teacher salaries, but it must be approved by a two-thirds margin.
More money!
For future construction projects, officials have time to figure out alternative funding sources, said Guy Mehula, chief facilities executive. The options include arranging for builders or banks to front the money. The district would repay them with interest.
Where are they going to get the repayment money?
A year ago, officials used a rosy forecast to justify Measure Q, the school system's fifth bond issue since 1997. An analysis projected that property assessments would grow an average of 6% a year. Experts characterized that as conservative.
...
The district's analysis failed to adequately consider the possibility of a real estate downturn, even though fewer than 20 years have passed since the prior downturn and history suggests that changes in home values are cyclical.
Whoops.  Keep in mind that there are very few schools in the LAUSD that I find usable.

Public education - it just gets more and more expensive.  Is there a lesson there when it comes to public health care?

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Another One Leaves California

Matt Dooley of Long Beach wrote a "Dear John" letter to California, and it was printed in the Orange County Register:
Dear California,

It's over. I just can't let you take advantage of me like this anymore. You have wasted so much of my money, and I can no longer afford to support your irresponsible behaviors. Now I've found a new home far away, where I feel others share my sense of responsibility. I'm leaving you, California, and I'm taking my hard-earned tax dollars with me.

You just don't get it, do you? The more you take away from people, the more those who actually pay taxes (like me) will leave you. The more you give away, the more people will expect a handout. Well, it's still a free country, and I'm outta here.
A lot of people have mentally written that letter and left already.  A lot of people still in California are thinking about doing the same.

If I'm sure the Left in California is doing what they can to get the worst in California policy spread nationally, so that there will be nowhere to run and still stay in the U.S.A.

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California's Latest Budget

There is plenty of moaning and groaning about California's latest budget agreement, and there are some legit gripes.  One of them is NOT that we should have raised taxes more.  We already have enough taxes and high enough tax rates – in fact, some were just raised a couple of months ago.  State government needs to be more responsible with the money it gets.  Here are some letters to the Los Angeles Times from people who clearly think the "rich" should be taxes even more.

Newell Gragg of Ventura wrote:
Instead, it's our elected leaders who have chosen to balance the budget on the backs of our state workers, the young, the elderly and the poor.
Uh, who receives the most of the budget?  Sorry, but healthy rich people in the private sector don't rely so much on the state budget, so of course it isn't balanced on their backs - except that is kind of is.  They are paying a heckuva lot in taxes.

Maryanne Rose of Laguna Niguel wrote:
We will not tax oil companies for oil extraction like other states do.
That would essentially be a tax on everyone, because the costs would be passed along to everyone.
We will not tax the likes of Warren Buffett, who are willing and able to pay more to a society that has lent to their prosperity.
Mr. Buffett is free to donate to private charities that help the sick, disabled, and elderly.  The "rich" are, actually, taxed disproportionately.  You are upset that they aren't being taxed even more.

Bud Wiser (really?) of Studio City wrote:
Inspired by the courageous actions of our governor and our legislators, my wife and I decided that we too had to make the same kind of "tough choices" to balance our budget. We've decided not to feed the children.
Har har.  It's not the state's responsibility to feed adults or feed children in the first place.  Adults are not the children of state legislators.  Well, a few of them may be.  But as adults, we should be taking care of ourselves and each other, and taking care of our kids.
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House Plan Boosts Taxes on Rich to 20-Year High

That's the AP headline.  But don't worry - this won't mean that the "rich" have less money to invest in your business, or less money to hire you or give you a raise, or less money to spend on the products or services you provide, or less money to give to your favorite charity.

Oh wait.  Yes, they will have less money do to those things.  Oh well.
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California's Problem is Not Prop 13

Joel Fox, president of the Small Business Action Committee , co-founder and editor of foxandhoundsdaily.com, and former president of the Howard Jarvis Taxpayers Association, writes in today's Los Angeles Times that "Proposition 13 Isn't the Problem"

This is not to be confused with my recent posting, "Prop 13 is Not the Problem".
Let's get the facts straight. Despite the cap instituted by Proposition 13, property taxes have increased dramatically in California. According to Board of Equalization data, property tax revenue has increased 800% since the measure passed in 1978 -- from $5.6 billion a year to $50 billion. Compare that with general fund revenue -- made up largely of sales, income and corporate taxes -- which has increased 500% over the same period.
Also see what I wrote in this past installment.
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Prop 13 Is Not The Problem

More than ever, California’s Prop 13 is being attacked by politicians, Big Labor, and news media types.

Fortunately, Jon Coupal, President of the Howard Jarvis Taxpayers Association, is doing what he can to speak up against these attacks.  He recently published "Prop. 13: Will It Be the Victim of Its Own Success?"
In order to "solve" California's massive budget crisis, the tax-and-spend lobby and left-leaning academics are again suggesting that we revise Proposition 13, which changed the state's tax structure in 1978 by lowering property tax rates and limiting annual increases.

Ironically, these new efforts to change the highly popular initiative are based, not on the argument that Proposition 13 has failed California, but on the grounds that Proposition 13 is working precisely as intended.

California's budget problem is a result of unrestrained overspending coupled with unstable sources of revenue.

The state government workforce has grown significantly faster than state population.  The state budget has grown faster than inflation and population.  The spending has been too high for too long.

He goes on to write that Prop 13 has actually been the government's friend.
While income tax and sales tax revenue are way down by double digit percentages, property tax revenues have simply flattened out, notwithstanding dramatic drops in market value. True, some counties will see slightly larger drops in revenue than others, but some counties will actually see increases in property tax revenue. There are few places in all of America which can make that claim.
So while Big Government promoters bemoan Prop 13 for not allowing them to boost property taxes faster, the fact is that Prop 13 has actually helped keep tax money coming in.
Here is the real irony. Our sales tax and income tax system has evolved over many years in ways dictated by our political elite and smartest policy advisors. Thus, the volatility that we now complain about has been brought to us by people who are oh so much smarter than the rest of us. Proposition 13, on the other hand, was sponsored by two relatively simple men, Howard Jarvis and Paul Gann, who were seeking, first and foremost, just to protect homeowners.
The increased spending advocates constantly bemoan that there is a 2/3rds requirement to raise taxes.  Yet, this has hardly prevented "necessary" tax increases, or even the huge tax increase worked out earlier this year.  Los Angeles County voters recently agreed to a half-cent sales tax increase, bringing the countywide sales tax to 9.75% as of today, with some cities as high as 10.75%.  Certain cities have recently been able to pass parcel taxes for their schools.

We have a high statewide rates for our sales tax, gas tax, personal income tax, and business tax.  We have utility taxes.  We have various sin taxes.  We have a lottery.

Yes, our property tax rates are moderate in comparison to other states, but the taxes are based on property values, and property values tend to be higher in California, so the tax revenue is still high.

We have enough taxes.  We have high enough taxes.  Even San Francisco rejected the recent attempt to extend recent tax increases for two more years.

Our problem is spending.  California resisted the welfare reform of the 1990s, and now has a widely disproportionate percentage of the welfare cases nationally.  We have millions of unskilled, poor, dependent illegal aliens and their children in our schools in our justice and correctional systems, using our infrastructure and utilities.  We have a ridiculous higher education system funded by taxes, consisting of ubiquitous community colleges, state universities, and many University of California sites.  We have taught the poor, the elderly, the sick, the pregnant, children, and students of all ages to be dependent on state programs.  We pay too much per prisoner in comparison to other states.  We have the highest paid teachers in the nation.

We need to cut waste, cut fraud, stop guaranteeing unreasonable benefit and retirement packages for government employees, stop doing things that should be left up to the private sector, and stop encouraging the dependent to come here from other states and countries to become de facto wards of our government.


Unfortunately, Big Labor - especially government employee unions - have the legislature on a leash, and can spend scores of millions of dollars on media campaigns.  Big Labor gets its funding from compulsory membership and compulsory dues, meaning workers need to jump through hoops to (supposedly) keep their money from being used as part of the political machinery perpetuating a system that is geared towards increasing the number of dues payers (government employees) and increasing the dues they pay via pay increases.

I would very much prefer California to be split, with the portion in which I reside becoming a "right to work" state, with Prop 13 and the 2/3rds requirement intact, a part-time unicameral legislature, and a restriction on any new bonds that bonds will only be used to fund major public works projects.

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