Friday, March 05, 2010

Thieving Rat B@st@rds

Stealing. There's no other word for it. No matter how they torture the language in the end the legislature has taken money out of the Stat highway Trust Fund and used it to cover general fund debt payments. It gets a little complex and involves weird concepts like different kinds of money but follow me here.

From Businessweek:
The swap allows some accounting maneuvers that would funnel more money into the state's general fund, where the deficit exists.

The tax exchange is estimated to generate $1.1 billion for the general fund while continuing to provide close to the current level of funding for public transit and repairs to highways and streets.

Californians would see no difference in prices at the pump.

Bullshit. The Trust Fund carries a close to $9 billion balance. The State won't spend it because as long as it sits there it helps balance the bookson paper. What about on the streets? KTLA:
Huge Pothole Flattens Tires On 101 Freeway
KTLA News7:17 AM PST, March 1, 2010

The 101 south through downtown was closed by a massive pothole. (February 28, 2010)

LOS ANGELES - Late last year, a national transportation research group stated that Los Angeles had the worst roads in the nation.


They robbed the Trust fund and we pay twice.


sm_landlord said...

First, everyone assume the position.

TJandTheBear said...

Hey, just following in the footsteps of the Feds and the Social Security Trust Fund.

Monica said...

The smart things to do would be for many consumers to buy less gas or even not at all if they can. That would defeat the purpose.

Peripheral Visionary said...

Dear California:

You may deny it, but there is a persistent rumor going about that you may try and hit up the U.S. Federal government for a bailout of your wretchedly debt-laden state. We just wanted to say that if you are going to get any money from the Federal government, you had better do so quickly, because by November of this year we will have voted in a Congress that has absolutely no intention of giving your state one thin dime of our money.

The U.S. Taxpayers

Property Flopper said...

PV - Tell that to Alaska, Montana, the Dakotas, etc. All those states that get far more Fed money than they pay in taxes - each and every year.

CA sends in more than it gets, it's our money y'all are playing with.

Pleather Murse said...

The population of most of those states would be medium sized municipalities in California. North Dakota or Alaska each have less population than Ventura County.

Bob said...

^^ on a per capita basis CA (and NY and most other high-personal-income states) pay more fed taxes than the fed gov't pays back into the state. Why, however, those numbers are misleading would take a lengthy article to explain. Basically, the measure of taxes paid does not realistically correlate to the census bureau's tax payments to states.

PV - the U.S. (i.e. its taxpayers) is already bailing out CA (and just about every other state). The use of Build America (sic) bonds is only the most recent means.

Peripheral Visionary said...

Lex, yes, California is already getting support from the Federal government in a variety of ways. But what has been lurking in the back halls of Congress is a full-on bailout of the state that allows it to continue its profligate ways. For any doubts on that matter, just reference the yield on California municipal bonds--the only way they can be trading at they ridiculously low yields they are currently trading at is because there is a broad expectation that the state will be bailed out (precisely why FNM/FRE's bonds traded for ridiculously low yields all the way up until the day they were bailed out.)

As far as the difference in Federal taxes versus expenditures, yes, California is a net payer--but that could change overnight. Bear in mind that literally all of FNM/FRE's profits were completely wiped out by their ensuing losses. Whatever CA has paid out in surplus taxes, I have few doubts that it would be swallowed up in the bottomless black pit of the state's finances should it be bailed out.

And all I'm saying is: if it's going to happen, it will be soon, or never. As the old saying goes, if you are going to panic, panic early. California has procrastinated going bankrupt (sounds suspiciously like one of its more infamous Failed Property Floppers), and if it procrastinates it past November, no bailout is coming.

w said...

Great analysis.

Don't forget that we are morally superior due to our views on carbon emissions. As flag bearers for the current Crusade we need tribute.

“What is at stake, is our ability to use the rule of law as an instrument of human redemption.’’-- Al Gore

Lost Cause said...

There must be a way that the state can halt this train of tax dollars going to Washington. Perhaps if the income tax were raised, people would then be able to deduct more from thier 1040 incomes, thereby paying less to the Feds. Sure Sacramento would be the lesser of two evils, but at least we would have a better chance.