What's wrong with California?
May. 9th, 2009 02:22 am![[personal profile]](https://www.dreamwidth.org/img/silk/identity/user.png){kind=small}
pecuniumMostly, not much. It's got wonderful people; is large enough that those who want to get away, can. The majority are tolerant enough that really crazy people can stay, and the really conservative types aren't chased out.
But it's got problems. Big problems. Money problems. Most of them stem from one cause, and the ways in which a couple of sets of politically motivated people have managed to exploit them.
The prime cause of our woes isn't a lack of money in the state, but rather a lack of money in the government. We have about 10 percent of the US population, and produce about 13 percent of the US GDP.
The problem goes back to 1978, and Prop. 13. Prop. 13 was a reaction to a couple of problems. There was a big increase in the value of housing prices. The county assessors would reassess properties every couple of years and the tax would jump (when a house goes from 12,000 to 40,000, the tax bite is pretty dramatic). The worst part was the reassessments weren't on a schedule. The increase was usually a surprise.
So Prop. 13 capped the amount which a property could be assessed (one percent of total value), and limited the increases when the property was reassesed. Reassessement could only be done when the property sold, or when certain types of remodelling was done.
That's not the most pernicious aspect of Prop. 13. That's later in the bill.
Section 3. From and after the effective date of this article, any
changes in state taxes enacted for the purpose of increasing revenues
collected pursuant thereto whether by increased rates or changes in
methods of computation must be imposed by an Act passed by not less
than two-thirds of all members elected to each of the two houses of
the Legislature
The same is true of referenda.
Which makes it hard to get new taxes passed. Historically California has met special needs by passing limited sales tax increases. They are usually well built; with a sunset clause, a sort of bridge fund, while other things level out. In the early '80s the LA Rapid Transit District was raising prices like mad. In two years the fare went from 50 cents (and a dime transfer) to a $1.25, with a quarter transfer. The transfers went from being good for a couple of hours (in effect $.60 was one way to your destination), to being good once, with an extra $.25 letting you use it once more. If you need four busses, it was going to cost $3.00 to go one way.
So we passed a .05 percent increase to our sales tax (in the areas served by the RTD), and fares went back to the previous level. That lasted for five years, and the fare (when the tax went away) rose to $.85/.25. Today it's $1.25.
But with a 2/3rds requirement, it's almost impossible to get such things passed. It takes something as dramatic as the RTD problem to get one, at a local level, and something just this side of the end of the world to get it at the state level. The politcians are afraid of losing their seats, and the folks in the parts not so affected don't see the point.
But bonds... bonds only require a simple majority to pass. They are touted as not costing the taxpayer anything ("no increase in taxes"). But that's only half true. Yes, there is no increase in taxes. That doesn't mean the taxpayer pays nothing. It means the money comes out of the general fund.
And come out of the general fund it does, because the cost of a bond is usually twice what the bond generates. That's before the loss in tax revenue is factored in. State and municipal bonds are tax free, which means it's has a secondary loss to state revenue.
The worst part, of course, is all that money is removed from the general fund; it can't be used for other things. Since taxes can't, effectively, be raised to cover those things which they othewise might. Which leads to someone getting the idea to use a bond issue to cover it, and the postive feedback loop builds.
The easist fix would be to change the way in which those two things are done. Most bonds pass with between 51-54 percent of the vote. Most taxes fail with between 56-60 percent of the vote.
If we could make it 55 percent for both, the tide would shift, which would solve a lot of our problems, becuase, when all is said and done, tax and spend makes a lot more sense than borrow and spend.
But it's got problems. Big problems. Money problems. Most of them stem from one cause, and the ways in which a couple of sets of politically motivated people have managed to exploit them.
The prime cause of our woes isn't a lack of money in the state, but rather a lack of money in the government. We have about 10 percent of the US population, and produce about 13 percent of the US GDP.
The problem goes back to 1978, and Prop. 13. Prop. 13 was a reaction to a couple of problems. There was a big increase in the value of housing prices. The county assessors would reassess properties every couple of years and the tax would jump (when a house goes from 12,000 to 40,000, the tax bite is pretty dramatic). The worst part was the reassessments weren't on a schedule. The increase was usually a surprise.
So Prop. 13 capped the amount which a property could be assessed (one percent of total value), and limited the increases when the property was reassesed. Reassessement could only be done when the property sold, or when certain types of remodelling was done.
That's not the most pernicious aspect of Prop. 13. That's later in the bill.
Section 3. From and after the effective date of this article, any
changes in state taxes enacted for the purpose of increasing revenues
collected pursuant thereto whether by increased rates or changes in
methods of computation must be imposed by an Act passed by not less
than two-thirds of all members elected to each of the two houses of
the Legislature
The same is true of referenda.
Which makes it hard to get new taxes passed. Historically California has met special needs by passing limited sales tax increases. They are usually well built; with a sunset clause, a sort of bridge fund, while other things level out. In the early '80s the LA Rapid Transit District was raising prices like mad. In two years the fare went from 50 cents (and a dime transfer) to a $1.25, with a quarter transfer. The transfers went from being good for a couple of hours (in effect $.60 was one way to your destination), to being good once, with an extra $.25 letting you use it once more. If you need four busses, it was going to cost $3.00 to go one way.
So we passed a .05 percent increase to our sales tax (in the areas served by the RTD), and fares went back to the previous level. That lasted for five years, and the fare (when the tax went away) rose to $.85/.25. Today it's $1.25.
But with a 2/3rds requirement, it's almost impossible to get such things passed. It takes something as dramatic as the RTD problem to get one, at a local level, and something just this side of the end of the world to get it at the state level. The politcians are afraid of losing their seats, and the folks in the parts not so affected don't see the point.
But bonds... bonds only require a simple majority to pass. They are touted as not costing the taxpayer anything ("no increase in taxes"). But that's only half true. Yes, there is no increase in taxes. That doesn't mean the taxpayer pays nothing. It means the money comes out of the general fund.
And come out of the general fund it does, because the cost of a bond is usually twice what the bond generates. That's before the loss in tax revenue is factored in. State and municipal bonds are tax free, which means it's has a secondary loss to state revenue.
The worst part, of course, is all that money is removed from the general fund; it can't be used for other things. Since taxes can't, effectively, be raised to cover those things which they othewise might. Which leads to someone getting the idea to use a bond issue to cover it, and the postive feedback loop builds.
The easist fix would be to change the way in which those two things are done. Most bonds pass with between 51-54 percent of the vote. Most taxes fail with between 56-60 percent of the vote.
If we could make it 55 percent for both, the tide would shift, which would solve a lot of our problems, becuase, when all is said and done, tax and spend makes a lot more sense than borrow and spend.
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no subject
Date: 2009-05-09 04:44 pm (UTC)I do find useful the regular election-time mailings from The Howard Jarvis 'Save Prop. 13' Taxpayer's Association -- what they tell me to vote against, I vote for, and vice versa. (I have no serious objection to limiting tax increases on primary residences -- what 13 was originally sold to the voters as being -- but in fact its major function seems to be to shift a lot of tax burden from wealthy investors to Middle- and Poor-Class citizens, and I think that is, on balance, unhealthy for our society.)
Bond Issues have become a knotty problem for me. They are usually for things I think need to be done, but they double the cost, and we (the taxpayers) _do_ pay for them, one way or another -- and for the interest that gets paid to the moneylenders. *sigh*
no subject
Date: 2009-05-09 04:48 pm (UTC)Yeah, I'd like to see some changes.
Were it me, I'd make it residential. I'd have a different rate for rental properties. I'd make a reappraisal for mortgages which take money out (which only happens now if the money goes back into the house as a serious remodel).
For business properties I'd make a fixed schedule.
Because business puts a lot of strain on infratructure, and uses a lot of services.
no subject
Date: 2009-05-10 06:04 am (UTC)And whenever I watch "Airplane!" with other people (as for example at cons, or at the LASFS Clubhouse, or wherever), I boo Jarvis' appearance on the screen and his name in the credits. Always.