# Will California get its financial act together? **URL:** \ **Category:** Great Debates\ **Created:** [November 8, 2010, 10:05am UTC](https://boards.straightdope.com/t/will-california-get-its-financial-act-together/559893 "2010-11-08T10:05:48Z")\ **Posts on this page:** 20\ **Page:** 1
**Author:** ![klsdad](https://avatars.discourse-cdn.com/v4/letter/k/3ec8ea/32.png) [@klsdad](https://boards.straightdope.com/u/klsdad)\ **Post date:** [November 8, 2010, 10:05am UTC](https://boards.straightdope.com/t/will-california-get-its-financial-act-together/559893/1 "2010-11-08T10:05:48Z")
… and if not, how can the rest of the country keep the Federal government from bailing it out? ---
**Author:** ![boytyperanma](https://avatars.discourse-cdn.com/v4/letter/b/4491bb/32.png) [@boytyperanma](https://boards.straightdope.com/u/boytyperanma)\ **Post date:** [November 8, 2010, 10:48am UTC](https://boards.straightdope.com/t/will-california-get-its-financial-act-together/559893/2 "2010-11-08T10:48:55Z")
> [@klsdad](#): > > … and if not, how can the rest of the country keep the Federal government from bailing it out? I believe eventually they will balance their books. If not I suppose the feds will have to get involved but lets be clear here California has been a net contributer for over 20 years now to the federal government. ie They pay more in Federal taxes then they receive in their state. So who’s bailing who out? If the rest of the country has to chip in and pay back what the nations largest economy has offered us, I say we suck it up. ---
**Author:** ![smiling\_bandit](https://avatars.discourse-cdn.com/v4/letter/s/e9a140/32.png) [@smiling\_bandit](https://boards.straightdope.com/u/smiling_bandit)\ **Post date:** [November 8, 2010, 3:49pm UTC](https://boards.straightdope.com/t/will-california-get-its-financial-act-together/559893/3 "2010-11-08T15:49:34Z")
> [@boytyperanma](#): > > I believe eventually they will balance their books. If not I suppose the feds will have to get involved but lets be clear here California has been a net contributer for over 20 years now to the federal government. ie They pay more in Federal taxes then they receive in their state. So who’s bailing who out? If the rest of the country has to chip in and pay back what the nations largest economy has offered us, I say we suck it up. So they can continue to run massive debts indefinitely? Hell no. Your premise is fundamentally flawed. The federal government goesn’t just hand money back to the states, and it’s entirely possible for every state to come out a net loser in the federal tax/spending loop. (Not that it does, for various and sundry reasons. But it could). Spending has nothing - and should have nothing - to do with how much that state winds up contributing. That’s the entire premise of the federal government. It can influenced but is never beholden to the states. ---
**Author:** ![Markxxx](https://avatars.discourse-cdn.com/v4/letter/m/5daacb/32.png) [@Markxxx](https://boards.straightdope.com/u/Markxxx)\ **Post date:** [November 8, 2010, 4:06pm UTC](https://boards.straightdope.com/t/will-california-get-its-financial-act-together/559893/4 "2010-11-08T16:06:34Z")
You evidently haven’t seen the new commericals about California featuring Betty White and the Jonas Brothers. Everything is just fine in California now 🙂 ---
**Author:** ![Blalron](https://avatars.discourse-cdn.com/v4/letter/b/35a633/32.png) [@Blalron](https://boards.straightdope.com/u/Blalron)\ **Post date:** [November 8, 2010, 5:00pm UTC](https://boards.straightdope.com/t/will-california-get-its-financial-act-together/559893/5 "2010-11-08T17:00:28Z")
California’s biggest problem is that they require a 2/3rds majority in the legislature to raise taxes. If they get their act together enough to remove that requirement, they’d go a long way towards fiscal solvency. ---
**Author:** ![conway](https://avatars.discourse-cdn.com/v4/letter/c/ec9cab/32.png) [@conway](https://boards.straightdope.com/u/conway)\ **Post date:** [November 8, 2010, 5:31pm UTC](https://boards.straightdope.com/t/will-california-get-its-financial-act-together/559893/6 "2010-11-08T17:31:16Z")
[Done!](http://latimesblogs.latimes.com/california-politics/2010/11/voters-pass-prop-25-allowing-legislative-majority-vote-to-pass-california-budget.html) ---
**Author:** ![Simplicio](https://avatars.discourse-cdn.com/v4/letter/s/c37758/32.png) [@Simplicio](https://boards.straightdope.com/u/Simplicio)\ **Post date:** [November 8, 2010, 6:24pm UTC](https://boards.straightdope.com/t/will-california-get-its-financial-act-together/559893/7 "2010-11-08T18:24:31Z")
> [@conway](#): > > [Done!](http://latimesblogs.latimes.com/california-politics/2010/11/voters-pass-prop-25-allowing-legislative-majority-vote-to-pass-california-budget.html) My understanding is that Prop. 25 doesn’t change the requirement for a 2/3rds majority on raising taxes. ---
**Author:** ![conway](https://avatars.discourse-cdn.com/v4/letter/c/ec9cab/32.png) [@conway](https://boards.straightdope.com/u/conway)\ **Post date:** [November 8, 2010, 6:59pm UTC](https://boards.straightdope.com/t/will-california-get-its-financial-act-together/559893/8 "2010-11-08T18:59:28Z")
That’s true, it doesn’t. Not directly anyway, but we’ll see how it plays out. Anyway, it should help… ---
**Author:** ![Algher](https://avatars.discourse-cdn.com/v4/letter/a/3d9bf3/32.png) [@Algher](https://boards.straightdope.com/u/Algher)\ **Post date:** [November 8, 2010, 7:03pm UTC](https://boards.straightdope.com/t/will-california-get-its-financial-act-together/559893/9 "2010-11-08T19:03:43Z")
> [@Simplicio](#): > > My understanding is that Prop. 25 doesn’t change the requirement for a 2/3rds majority on raising taxes. Nor should it. We are in the top ranks of states when it comes to taxation (ranked 6th in 2008 according to the data on this site): [http://www.taxfoundation.org/taxdata/show/336.html](http://www.taxfoundation.org/taxdata/show/336.html) We collect plenty of money - we need to learn to spend less. If we were down in the lowest areas, I might agree that we need more taxes. However - collections is not our issue, spending is. As for a Federal bailout - yes, we get 78 cents back for every dollar we send to Washington. I think it is perfectly reasonable to ask for help, since everyone else seems to be helping themselves to the money. [http://www.taxfoundation.org/taxdata/show/266.html](http://www.taxfoundation.org/taxdata/show/266.html) ---
**Author:** ![Strassia](https://avatars.discourse-cdn.com/v4/letter/s/e8c25b/32.png) [@Strassia](https://boards.straightdope.com/u/Strassia)\ **Post date:** [November 8, 2010, 7:05pm UTC](https://boards.straightdope.com/t/will-california-get-its-financial-act-together/559893/10 "2010-11-08T19:05:46Z")
Prop 25 does allows a simple majority to pass the spending portion of the budget, but keeps the 2/3 requirement for taxes. To make matters worse, Prop 26 (which passed) means it now takes a 2/3 super-majority to impose fees. Two things need to happen for California to gets its house in order (barring continuously and vigorously expanding economy): 1. The requirements for increasing revenue and spending need to be brought in line. Either everything 2/3 or everything 50%. 2. The ballot process needs to be reformed so that any proposition funded by bonds need to specifically create a mechanism for paying the bond rather than just pushing it on to the general fund. ---
**Author:** ![The\_Hamster\_King](https://avatars.discourse-cdn.com/v4/letter/t/8edcca/32.png) [@The\_Hamster\_King](https://boards.straightdope.com/u/The_Hamster_King)\ **Post date:** [November 8, 2010, 7:18pm UTC](https://boards.straightdope.com/t/will-california-get-its-financial-act-together/559893/11 "2010-11-08T19:18:18Z")
> [@Blalron](#): > > California’s biggest problem is that they require a 2/3rds majority in the legislature to raise taxes. If they get their act together enough to remove that requirement, they’d go a long way towards fiscal solvency. Exactly. If a majority of voters WANT higher taxes and more government spending, then that’s the policy that should prevail. The current anti-democratic state of affairs where a minority can perpetually thwart the will of the majority with regard to taxes (but not spending) is what has brought us to this sad situation. ---
**Author:** ![Algher](https://avatars.discourse-cdn.com/v4/letter/a/3d9bf3/32.png) [@Algher](https://boards.straightdope.com/u/Algher)\ **Post date:** [November 8, 2010, 7:30pm UTC](https://boards.straightdope.com/t/will-california-get-its-financial-act-together/559893/12 "2010-11-08T19:30:11Z")
> [@The\_Hamster\_King](#): > > Exactly. If a majority of voters WANT higher taxes and more government spending, then that’s the policy that should prevail. The current anti-democratic state of affairs where a minority can perpetually thwart the will of the majority with regard to taxes (but not spending) is what has brought us to this sad situation. We had 2/3 for both for years, and have just GIVEN the Democrats in our state legislature the power to write their own budget with zero need for Republican input. So the Democrats can now show how they can manage California with the 6th highest total tax burden nationally. ---
**Author:** ![Voyager](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/voyager/32/133_2.png) [@Voyager](https://boards.straightdope.com/u/Voyager)\ **Post date:** [November 8, 2010, 7:33pm UTC](https://boards.straightdope.com/t/will-california-get-its-financial-act-together/559893/13 "2010-11-08T19:33:08Z")
> [@Algher](#): > > We collect plenty of money - we need to learn to spend less. If we were down in the lowest areas, I might agree that we need more taxes. However - collections is not our issue, spending is. > > As for a Federal bailout - yes, we get 78 cents back for every dollar we send to Washington. I think it is perfectly reasonable to ask for help, since everyone else seems to be helping themselves to the money. > > [http://www.taxfoundation.org/taxdata/show/266.html](http://www.taxfoundation.org/taxdata/show/266.html) The problem is not a spending increase, but a tremendous revenue decrease. [This site](http://www.usgovernmentrevenue.com/California_state_revenue_2010#usgs302) allows you to look at total revenue year over year. 2006: 350.3 2007: 414.3 2008: 294.2 2009: 298.9 2010: 319.3 (est) A $100 billion drop in revenue in one year is not “plenty of money” in my book. That the deficit isn’t any worse shows that there have been plenty of spending cuts. ---
**Author:** ![Algher](https://avatars.discourse-cdn.com/v4/letter/a/3d9bf3/32.png) [@Algher](https://boards.straightdope.com/u/Algher)\ **Post date:** [November 8, 2010, 7:38pm UTC](https://boards.straightdope.com/t/will-california-get-its-financial-act-together/559893/14 "2010-11-08T19:38:33Z")
> [@Voyager](#): > > The problem is not a spending increase, but a tremendous revenue decrease. [This site](http://www.usgovernmentrevenue.com/California_state_revenue_2010#usgs302) allows you to look at total revenue year over year. > > 2006: 350.3 > 2007: 414.3 > 2008: 294.2 > 2009: 298.9 > 2010: 319.3 (est) > > A $100 billion drop in revenue in one year is not “plenty of money” in my book. That the deficit isn’t any worse shows that there have been plenty of spending cuts. None of that shows that we need to increase taxes, however. Our revenue drop is thanks to the state having problems. Taxing the people more is not the answer, IMHO. ---
**Author:** ![Voyager](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/voyager/32/133_2.png) [@Voyager](https://boards.straightdope.com/u/Voyager)\ **Post date:** [November 8, 2010, 7:39pm UTC](https://boards.straightdope.com/t/will-california-get-its-financial-act-together/559893/15 "2010-11-08T19:39:46Z")
> [@Algher](#): > > Nor should it. We are in the top ranks of states when it comes to taxation (ranked 6th in 2008 according to the data on this site): > > [http://www.taxfoundation.org/taxdata/show/336.html](http://www.taxfoundation.org/taxdata/show/336.html) I’m not sure where you are getting sixth from that site, or how they measure it. Going to the new link gives a table where California is first, by a lot, but it is not expressed as a per capita tax amount or a percentage of GDP. Also, local property taxes are not included, whereas our property taxes are collected at the state level and redistributed. ---
**Author:** ![Algher](https://avatars.discourse-cdn.com/v4/letter/a/3d9bf3/32.png) [@Algher](https://boards.straightdope.com/u/Algher)\ **Post date:** [November 8, 2010, 7:59pm UTC](https://boards.straightdope.com/t/will-california-get-its-financial-act-together/559893/16 "2010-11-08T19:59:40Z")
> [@Voyager](#): > > I’m not sure where you are getting sixth from that site, or how they measure it. Going to the new link gives a table where California is first, by a lot, but it is not expressed as a per capita tax amount or a percentage of GDP. Also, local property taxes are not included, whereas our property taxes are collected at the state level and redistributed. > [@](#): > > For 18 consecutive years the Tax Foundation has published an estimate of the combined state-local tax burden shouldered by the residents of each of the 50 states. For each state, we calculate the total amount paid by the residents in taxes, and we divide those taxes by the total income in each state to compute a “tax burden” measure. 6th is from the 2008 table, showing this data: State: California Rate: 10.5% Rank (1 is the highest): 6 Per Capita Taxes Paid to Home State: $3,683 Per Capita Taxes Paid to Other States: $1,345 Total State and Local Per Capita Taxes Paid: $5,028 Per Capita Income: $47,706 ---
**Author:** ![Acsenray](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/acsenray/32/4519_2.png) [@Acsenray](https://boards.straightdope.com/u/Acsenray)\ **Post date:** [November 8, 2010, 10:52pm UTC](https://boards.straightdope.com/t/will-california-get-its-financial-act-together/559893/17 "2010-11-08T22:52:22Z")
> [@Algher](#): > > Nor should it. We are in the top ranks of states when it comes to taxation (ranked 6th in 2008 according to the data on this site): > > [http://www.taxfoundation.org/taxdata/show/336.html](http://www.taxfoundation.org/taxdata/show/336.html) > > We collect plenty of money - we need to learn to spend less. If we were down in the lowest areas, I might agree that we need more taxes. However - collections is not our issue, spending is. Spending will not go down unless there is a realistic possibility of taxes going very high. That’s how representative democracy works. Take away the possibility of skyrocketing taxes, and you break the system. ---
**Author:** ![Chen019](https://avatars.discourse-cdn.com/v4/letter/c/f19dbf/32.png) [@Chen019](https://boards.straightdope.com/u/Chen019)\ **Post date:** [November 8, 2010, 10:57pm UTC](https://boards.straightdope.com/t/will-california-get-its-financial-act-together/559893/18 "2010-11-08T22:57:20Z")
> [@Algher](#): > > Nor should it. We are in the top ranks of states when it comes to taxation (ranked 6th in 2008 according to the data on this site): > > [http://www.taxfoundation.org/taxdata/show/336.html](http://www.taxfoundation.org/taxdata/show/336.html) > > We collect plenty of money - we need to learn to spend less. If we were down in the lowest areas, I might agree that we need more taxes. However - collections is not our issue, spending is. > > As for a Federal bailout - yes, we get 78 cents back for every dollar we send to Washington. I think it is perfectly reasonable to ask for help, since everyone else seems to be helping themselves to the money. > > [http://www.taxfoundation.org/taxdata/show/266.html](http://www.taxfoundation.org/taxdata/show/266.html) They need to penalise those who hire illegals. > [@](#): > > In California today, illegal immigrants’ cost to the taxpayer is estimated to be $13 billion half the state’s budget deficit. > > The state should stop providing welfare and other social services to illegal aliens as existing statutes demand and severely punish employers who break the law by hiring illegal immigrants. This would immediately remove powerful economic incentives for illegal immigration, and millions of illegal aliens would return to their countries. Instead, with President Obama in the White House and the Democrats controlling Congress, an amnesty for the country’s 13 million illegal immigrants may be soon to come. > > Milton Friedman once said that unrestrained immigration and the welfare state do not mix. Must we wait until California catches up with Mexico to realize how right he was? [http://www.npr.org/templates/story/story.php?storyId=112167023](http://www.npr.org/templates/story/story.php?storyId=112167023) ---
**Author:** ![Der\_Trihs](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/der_trihs/32/233_2.png) [@Der\_Trihs](https://boards.straightdope.com/u/Der_Trihs)\ **Post date:** [November 8, 2010, 11:36pm UTC](https://boards.straightdope.com/t/will-california-get-its-financial-act-together/559893/19 "2010-11-08T23:36:37Z")
Ah, the good old “blame it on the brown people” routine. _We_ are the ones exploiting _them_, no matter how hard you try to blame the victim. ---
**Author:** ![marshmallow](https://avatars.discourse-cdn.com/v4/letter/m/df705f/32.png) [@marshmallow](https://boards.straightdope.com/u/marshmallow)\ **Post date:** [November 9, 2010, 1:52am UTC](https://boards.straightdope.com/t/will-california-get-its-financial-act-together/559893/20 "2010-11-09T01:52:49Z")
California played major roles in the tech/stock bubble. After that burst we recovered via the housing bubble, which California also played a large role in. Can we get another bubble? [Next page](https://boards.straightdope.com/t/will-california-get-its-financial-act-together/559893.md?page=2)