Posted on 01/21/2005 2:09:41 PM PST by NormsRevenge
It contains such off-putting phrases as "average growth and standard deviation" and "short-term elasticity," but a 20-page report issued Thursday by the Legislature's budget analyst is one of the most important documents ever to surface in the Capitol.
The report, entitled "Revenue Volatility in California," provides statistical proof for what followers of state budgetary politics have known for years: California's state and local tax system is a mess and lies at the heart of its chronic budget crisis.
A complex, intertwined set of political, economic and demographic factors has changed a once-stable system of taxation - personal and corporate income taxes, sales taxes and property taxes, primarily - into one whose revenues often fluctuate widely from year to year.
That volatility is poisonous because locked-in-law spending formulas - those affecting school finances, most prominently - and political interests ratchet up spending and push tax cuts when revenues spike upward, but cannot adjust to sudden income drops.
The state's current crisis is a classic example of the syndrome. The state received a $12 billion, one-time windfall of income taxes in 2000, thanks to spikes in the technology-driven stock market, and then-Gov. Gray Davis and the Legislature foolishly made $8 billion in permanent annual commitments for spending and tax cuts. Revenues returned to more normal levels the following year, and the state has been stuck ever since with what fiscal mavens call a "structural deficit."
Democrats have refused to back down from the spending commitments, Republicans have refused to roll back tax cuts, and the deficits have been covered for four years by borrowing money from bankers and special state funds, such as highway funds. The deficit loans total at least $25 billion so far and Gov. Arnold Schwarzenegger, --snip-- has been unable to close the gap.
(Excerpt) Read more at sacbee.com ...
Where else, but in California? Of course.
Revenue Volatility In California
HTML and PDF versions available
http://www.lao.ca.gov/
Why shouldn't it be, the Socialist are using the European Socialist Constitution, not the US Constitution.
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California is a beautiful state that needs a conservative republican Gov! Oh wait what was I thinking were are conservatives? Lately I haven't seen any.
Typical of politics. Create programs which never go away even if they turn out to be worthless.
Its all built on the marxist plank of progressive taxation, why would it work? Nothing else that SOB wrote has worked.
well this was all of Gray Davis' and his cronies doing...you can't dig out of this in a couple of years. Gotta junk it all, redistrict and hold those accountable. The years of money flowing in hand over fist aren't here anymore and even though revenues are still huge, all the tax system bs and % spending on certain programs are making it tough to dig out
well I always defend California from that type of remark. I hate the politics but alot of states are in financial crisis and I've read dozens of whacky, insane and ludicrous storys about all kinds of crap happening today in NJ, TX, PA, NY MO etc and you don't write in and say "Only in ___"
the calif punchline doesn't hold water after awhile
lol.. duly noted. altho ya got to admit some pretty nutzo ideas do originate here.
well, thanks for the bump anyway.
If California taxed deviants, they would have a surplus budget.
bttt
If California taxed deviants, they would have a surplus budget.
YES! It could be called the "let me be FREE" tax. Now if the Californian linguist would find a way to Just implement this translation... it could be called the new "freedom tax", and the liberal Dems in CA could sell it as a tax on their buddies "to fight that evil President Bush". :)
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