Democratic controlled California Budget Balanced on Faulty Figures- deliberately

Los Angeles Times ^ | February 23, 2003 | Jeffrey L. Rabin

[Kay Soze]

Budget Balanced on Faulty Figures

As election neared, state leaders ignored warning signs of a faltering economy and made erroneous assumptions about future revenue. By Jeffrey L. Rabin Times Staff Writer

February 23, 2003

Last August, Gov. Gray Davis and members of the Legislature were in a bind: The state budget was two months late, election day was fast approaching and they still had a gap of more than $10 billion to fill.

Rather than confront the magnitude of that challenge, however, California's elected leaders resorted to budget tricks, ignored evidence that the economy was faltering and made false assumptions about future revenue and the effect of proposed spending cuts. The result was a budget that was out of balance as soon as it was signed. And the spending plan has continued to dip into the red, deepening the current fiscal crisis.

A review of economic indicators and budget documents from last year reveals a host of ways in which state leaders papered over California's fiscal difficulties in an election year.

Among them:

During the budget negotiations, Davis' administration changed how it portrayed the state of the economy. Using those incorrect projections left the state with billions of dollars less revenue this year than the budget anticipated.

But last year, the Davis administration presented those estimates differently than it and other administrations had in the past.

In previous years, the estimates included in what is known as the "May revise" were based on the economy's annual performance for the year before and estimates of its performance in the year to come. In 2002, however, the Davis team crunched the numbers by comparing the economy in the fourth quarter of one year to the same period a year earlier.

The effect of that subtle shift was profound, both economically and politically Had Davis, then in the midst of a reelection campaign, used the annual figures, they would have shown that the number of jobs in California was expected to drop 0.5%. And the growth in income would have been just 1.5% during the same period -- paltry numbers for a governor defending the state of the California economy on his watch.

UCLA economists, who issue the most widely regarded California forecasts, predicted in late June that the number of jobs in California would grow by only 0.2% during 2002. Personal income was expected to increase just 1.2%.

Those predictions were available to Davis and the Legislature, but they did not take them into account. The budget was built using the administration's more optimistic assumptions.

[Myrddin]

If you can get stats from U-Haul and Ryder on one-way rentals leaving California, you might have some starting fodder. Perhaps Mayflower, Bekins and similar moving companies keep such statistics as well.

[Atchafalaya]

Good point.

[Jubal Harshaw]

Some direct and indirect stats HERE. Some key numbers:

"In 2002, California experienced its highest out-migration in seven years — 52.1 percent — according to United Van Lines' study of the company's 198,571 interstate household moves in the 48 contiguous U.S. states and Washington D.C."

The article also has a few other indirect measures of the difference between the numbers moving into CA and those moving out. For example:

"Renting a 17-foot U-Haul truck for a one-way trip from Flagstaff, Ariz. to San Jose at the end of February is $377, according to the company Web site. Reversing the trek, however, is a whole different story. It's $843 to rent the same truck in San Jose and drive it out of town to Flagstaff on the same day. The same kind of price differential is true at Budget where leaving Flagstaff for San Jose on Feb. 28 in a 15-foot truck costs $211.50, and flipping the trip costs $1,074.60."

Hope this was helpful.

[Grampa Dave]

The LA Slimes, The Sac Bee and the SF GayRhonicle have been in bed with their fellow perverts, Davis and the rat legislature for years.

They knew about the lies and the problems during the last election, and we heard nothing from them.

So why are they now doing some half truths?

[Grampa Dave]

Thanks for posting this great link.

This replicates what was happening in Kali during our recession in the early 1990's.

Our younger son moved to Portland, Oregon in 1991. Budget Rentals wanted $1,000 if the truck was driven one way to Portland. We rented the truck for 4-5 days and returned it to Kali for about $300's.

At that time people were fleeing Kali to get out of the recession brought on by Willie Brown and his tax and spend days in the legislature.

In our fly club a few retired guys worked out great deals. They would fly to Portland, all expenses paid. They would drive back two vehicles or one truck and a trailer. They got paid, got meal expenses an overnight stay in a motel, and they fly fished down from Portland to the Bay Area or the Sac area. I may look into this when the warmer weather comes back.

The United Van's data is very scary. Those people leaving the state had good jobs and paid a lot of taxes.

[Myrddin]

Thanks for the reference. Clearly, the supply/demand pricing shows the outbound direction from California in higher demand. I left San Diego in December 2000. Mayflower hauled 21,000 lbs of personal effects to Pocatello for $7,500. U-Haul enjoyed two rentals at my expense for the same path. Each one cost me $1,500 for the truck with an auto trailer. I put my Saturn SL2 on the trailer to drive back in Feb 2001. In June 2001, I put my 914 on the trailer and took a plane back to San Diego.

Idaho is taking around $12,000 in state income taxes and $3,000 in property taxes. By comparison, California was taking $17,000 in state income taxes and about $1,800 in property taxes. The cost of living is lower in Idaho. Sales taxes and prices for goods and services are lower.

The temperature is lower too...it was 2.7 degrees F at sunrise this morning.

[Liz]

The state budget was two months late, election day was fast approaching and they still had a gap of more than $10 billion to fill. Rather than confront the magnitude of that challenge, however, California's elected leaders resorted to budget tricks....

The politcians are like Pavlov's dogs salivating for votes at the sound of the election bell,
willing to do anything to save their sorry selves. The desperate politicans do their corrupt
budget tricks and the taxpayers are forced to pay, and pay, and pay, and pay...............

[Grampa Dave]

This great!

[Liz]

Glad you enjoyed the pic.

[Grampa Dave]

[Liz]

LOL. Having fun?

[SierraWasp]

I TOLD you and everyone else... This IS Gray Davis' and the DEAD-END Demonicrat's "Smart Growth" (aka Reverse Growth) public policy!!! Rural cleansing, job suffocation as a solution, with no more infrastructure for energy or freeways and fiscal wreckage is how they intend to stop traffic congestion, urban sprawl and a host of myriad perceived "problems" within CA!!!

I hope I'm not the only one who understands this lucid scenario.

To them, Illegal Immigration is the solution, not the problem!!! It's all about their permanent empowerment with serfs and cheap labor, RULED BY THEM!!! It's TRANSPARENT!!!

[Grampa Dave]

Actually that has been the first two months for us. The hundred $ bills have been flowing out to pay for Christmas, water damage, birthdays, car registration, smog testing of the cars, and insurance payments above and beyond the normal monthly bills.

I hold up a hundred $ bill and shazaam its gone!