Thursday, December 18, 2008

$41.8 Billion and Counting

Unfreakin' believable. This is how Prop 13 was first passed.
The Democrats circumvented Republicans through a number of novel maneuvers that take advantage of the legal difference difference between taxes and fees and skirt the need for a two-thirds vote of the Legislature, which is normally required for tax hikes. A two-thirds vote would require some Republican support, but GOP lawmakers have vowed not to raise taxes. On the floors of the Senate and Assembly, Republicans said the Democrats showed contempt for voters and an unprecedented subversion of California's Constitution.

LATimes has the rest.

Let me tell you what's going to happen. Within two weeks an initiative will be circulating that amends the Constitution to reclassify "fees" as taxes and it will pass with 85% approval. That's an ungovernable situation but that won't matter bu then.


Tyrone said...

Firstly, let me say that I am outraged!

Casey Serin said...

When will California secede from the United States?

Akira said...

Severance Tax Now!

Bakersfield Bubble said...

Per says he will veto.

Akira said...

This blog is kind of boring these days.
I miss Tanta.
CR is thoroughly boring now too.
I miss Tanta.

Rob Dawg said...

To my knowledge Tanta never posted here.

Regardless, you are correct. I have been remiss in keeping you all properly entertained. I'll try to do a bit better.

lurker said...

all i can say is, "good."
California needs to rust, die, decay and otherwise disappear from the face of this earth. all with it, all of the idiots who live there, including fat rebucians who would rather blame everything on mexicans than take an honest look at their overconsumptive lifestyles and make logical changes that might possible do good for mankind.

Lost Cause said...

Would you rather the state go bankrupt?

I think the gas tax is ok. People won't notice it that much, since the prices have dropped. People need to be discouranged from driving. There is too much traffic and smog.

Obesity tax.

TJandTheBear said...

Actually, YES, I'd like to see CA go bankrupt.

Lou Minatti said...

$1.50 gas tax increase. They will sell it as "doing you a favor." They COULD HAVE asked for $2.00 tax increase/gallon, but they did you a favor.

2009 prediction: Casey will not go to jail.
2010 prediction: Casey will not go to jail.
2011 prediction: Repeat 2010.

spooq said...

Hi guys, haven't posted in a while but I still read the articles, if not the comments. Just wanted to know what the legal difference between a tax and a fee is if the fee is a % of your income tax? Seems like a pretty thin pretext to me, surely someone is going to challenge this in the courts?

Also, still loving that gold :D

serinitis said...

Prop 42 essentially made our gas tax a fee so the plan, while creative, doesn't have a chance of getting through the courts. Even without prop 42 I would question the legality. Right now everything points to modifying our Constitution to get rid of the 2/3 requirement on raising taxes. The Democrats do need to bite the bullet and do this legally, with a Constitutional convention and/or a special election and taking the time to sell it to the voters and hear to their response.

Property Flopper said...

There is going to be a lot of screaming / posturing on both sides of the aisle, but nothing will get resolved in time. The gov't will run out of cash, trigger "emergency" conditions and start sending out vouchers - just like they do every time there is a late budget.

Eventually, enough crap will pile up that they'll get together, raise taxes and do significant cuts. Neither side will be happy but both will claim a major victory - while blaming the other side for the "bad" parts of the bill that the signed.

It's so utterly predictable, yet they still insist on playing out the drama.

H Simpson said...

Expect to see Mass follow behind Cal, though on a smaller scale.

Mitt Romney's free healthcare is kicking in just as the revenues crap the bed. Revenue from successful lottery if falling too.

10% of distributions to towns have already been slashed.

Your favorite Natick Collection mall may not around much longer. Their owner, General Growth Properities is trying to unload Fanuel Hall in Boston to avoid bankruptcy.

Getting ugly for those people and governments that overextended without understanding the repercussions.


Rob Dawg said...

Your favorite Natick Collection mall may not around much longer. Their owner, General Growth Properities is trying to unload Fanuel Hall in Boston to avoid bankruptcy.

Following it closely. My great grandfather may return from the grave to take back his cranberry bogs.

Rob Dawg said...

Prop 42 essentially made our gas tax a fee so the plan, while creative, doesn't have a chance of getting through the courts.

The Dems have this part technically correct. The excise portion of the gas taxes is a fee and can be raised. The problem is that they can't comingle that money with the general fund. As it is they've stolen about $4b from the trust fund and are liable to force us to sue them for that back if they try anything bigger.

Captain Nemo said...

Prop 13 is part of the problem!

Simply put, Prop 13 creates great inequalities. Warren Buffet talked about this a few months ago -- he pays less than $10k in property taxes on his mansion in CA.

I understand the desire to protect people on fixed incomes, I'm just not sure that the cure was better than the disease.

Rob Dawg said...

Without Prop 13 property taxes would have been set by the likes of Casey Serin. Think about that.

Property Flopper said...

Prop 13 benefits large corporations who do not sell their real estate. They are still paying 1970's taxes.

It's the residential owners that are getting hit with the higher taxes. Residential real estate turns over, resetting the taxes.

That large Exxon refinery down the street doesn't get sold.

Captain Nemo said...


I understand the need for controls on taxes and the effects if increasing house values of property taxes. I just don't think Prop 13 got it right. Of course there is also the issue of local taxes going to Sacramento for re-distribution (to make spending on schooling more equitable). I believe a lawsuit was responsible for that.

Both probably good ideas at the time, but now looking less good.

Lost Cause said...

Prop 13 result -- low taxes on expensive real estate. Predictable small increases make this a good place for retirement.

Commercial real estate owners the biggest beneficiaries, since it rarely changes hands.

serinitis said...

What I understand that they are proposing with the gas tax is to drop the gas tax and add income tax and sales tax to replace it (revenue nuetral). They will then add a gas fee equal to the current gas tax to maintain our roads. That is the part I question. I think our current gas tax is a fee and so you cannot swap it for a different tax

serinitis said...

Prop 13 is part of the problem. I just think it is more sacred than Social Security. Exempting commercial property from it would be good. Trying to touch it is probable political suicide.

Akubi said...

Federal public works plan could send big bucks to California