Saturday, April 12, 2008

California Is So Screwed



The State Controller has more bad news (pdf file).
Tax Revenue in March 2008
⇒ General Fund revenue in March was $618 million below
(-10.3%) the Governor’s Budget estimate for the month.
Corporate taxes were the largest contributor to this loss,
coming in $266 million under (-16.1%) the estimate. Sales
taxes were below estimate by $164 million (-7.5%) while
income taxes were $9 million above (0.5%) the Governor’s
Budget estimate. Together, the three largest taxes
(personal income, corporate and sales taxes) were $421
million below (-7.6%) the Governor’s January Budget
estimate for March. Insurance tax receipts were below the
estimate by $173 million (-70%).
⇒ Revenue in March was $833 million below (-13.4%) the
2007-08 Budget Act estimate. Income taxes were $311
million lower (-15.2%) than the Budget Act’s figures. Retail
sales revenue was below estimates by $189 million
(-8.5%). Corporate taxes were $138 million below (-9.0%)
the Budget Act estimate.

We discovered yesterday that a nice Federal judge decided that inmates (11% illegal immigrants) are Constitutionally entitled to what free citizens and legal residents are not; free healthcare. $7 billion in additional borrowing this fiscal year mandated.

The numbers above are not a cup of black coffee to sober up the party boys in Sacramento. These are a OMFG 2x4 to the brain bucket hit. The idea of calling what I now judge to be a $22 billion deficit a $9 billion deficit hinged on several things that are not happening. We'll go into each in detail but the failure of the term limits extension has hardened both extremes, the lending environment is bad and getting worse and plain old there isn't enough money to cover anticipated debt service and expenditures in a recession.

N.B. The picture is from "Titan A.E." discussing how "humanity is circling the drain." Apropos n'est pas?

12 comments:

Buzz Saw said...

First, murst, liverwurst! On behalf of middle america may I just say that you can have your overflow convicts back anytime. Quit paying that bill and you will get a nice present. :)

Steve said...

Hmmm...

Farmers complaining about lack of workers to harvest crops and work in the fields, large populations of inmates.

Can we hire some of the guards from Angola down in Louisiana and teach CA guards how to work inmates in the fields?

Akubi said...

OT, but any thoughts on IGoBanking.com?

Bill said...

That's why you need the death penalty - now with fewer appeals!

Price organ transplant or quad-bypass surgery and you find it is no longer cheaper to let murderers die from old age.

Santa Flipper Clause said...

Ho Ho Ho - It's Santa Flipper Clause

@akubi - IGoBanking.com - Who knows? But the chick in the ad is cute.

Santa F. Clause

w said...

God this is intertaining!

If the prisoners will be working in the fields I recommend irradiating them before they handle any produce. Maybe they would be better suited to working on Cal Trans chain gangs.

Personally I think tent cities in Barstow would be better than building more prison facilities.

Winston said...

I don't think that there's been a recent ruling that you have to provide water for convicts. Just shut off the water and in 4 days the problem's solved. Well, you'll need some guys with pitchforks...

Jean ValJean said...

Just use realtors. They will work hard for our business!
Oh. And it's a great time to buy in Jacksonville!

http://calculatedrisk.blogspot.com/2008/04/cnbc-merrill-expected-to-write-down-up.html

Rob Dawg said...

It is the first week of January and the mailbox is stuffed full of Christmas bills and a pink slip. It just continues to astound me that there still is no sense of urgency at any level. Every department at every level from potholes to legislators offices should be enacting an immediate 15% budget reduction and planning a 10% personell reduction goal by June. This merely to put us in a position to start rational cutting from there.

The State needs to act as if its borrowing power has been cut off. To be honest that's my absolute minimum best case scenario. A lot of the existing debt is going to reset/rollover/whatever and prove far more costly than currently.

The State needs to assume that any changes in tax structure will be at best revenue neutral within 2 years.

The State needs to understand that even mentioning Prop 13 will be fatal. That kind of talk causes panic.

The State needs to realize that it only governs by accedence of the middle classes and that is in danger if any more pressure is applied. They just won't agree to be governed from hundreds of miles away from people they didn't elect that don't represent them and won't listen.

Lou Minatti said...

It just continues to astound me that there still is no sense of urgency at any level.

If it's any consolation I sold a widget last week to a California public university. They were told to spend their money or lose it in the next budget cycle. They actually tell me this. Government purchasing agents have ALWAYS told me this, like it's no big deal.

There's no sense of urgency in any California (or Florida, for that matter) government agency. Michigan and Nevada are different. I haven't sold a widget to any government agency in those two states in many months.

Rob Dawg said...

Lou,
A lot of "middle class entitlement" is tied up in the "free" college and university system. If what happens this summer is what I expect; a massive fee increase and huge reduction in assistance then there will be hell to pay.

Read the new post above this but watch your blood pressure.

Beyonder said...
This comment has been removed by the author.