Prop 23 Update — Exodus: California Tax Revenue Plunges by 22%

Russ Steele

Do you remember those Prop-23 vs AB-32 debates when we were assured by our local left that AB-32 and green jobs were the way of the future? That raising the cost of business with new regulations and more fees was the right solution for California.   Obama and his lame stream press are claiming the economy is in recovery, but I guess not in California, and State Controller John Chaing keeps getting monthly reality checks.

Chriss W. Street writing at Big Government:

State Controller John Chaing continues to uphold the California Great Seal Motto of “Eureka”, i.e., ‘I have found it’. But what Chaing is finding as Controller is that California’s economy as measured by tax revenues is still tanking. Compared to last year, State tax collections for February shriveled by $1.2 billion or 22%. The deterioration is more than double the shocking $535 million reported decline for last month. The cumulative fiscal year decline is $6.1 billion or down 11% versus this period in 2011.

While California Governor Brown promises strong economic growth is just around the corner, Chaing proves that the best way for Sacramento politicians to hurt the economy and thereby generate lower tax revenue, is to have the highest tax rates in the nation.

During the Prop 23/AB-32 debates we told the warmers that AB-32 the Global Warming Solutions Act would drive business from the state.

Spectrum Locations Consultants recorded 254 California companies moved some or all of their work and jobs out of state in 2011, 26% more than in 2010 and five times as many as in 2009. According SLC President, Joe Vranich: the “top ten reasons companies are leaving California: 1) Poor rankings in surveys 2) More adversarial toward business 3) Uncontrollable public spending 4) Unfriendly business climate 5) Provable savings elsewhere 6) Most expensive business locations 7) Unfriendly legal environment for business  Worst regulatory burden 9) Severe tax treatment 10) Unprecedented energy costs.

It appears that AB-32 is doing what it was designed to do, kill the California economy while demonstrating how stupid our political leaders really are.

H/T to CalWatchDog for this story.



About Russ Steele
Freelance writer and climate change blogger. Russ spent twenty years in the Air Force as a navigator specializing in electronics warfare and digital systems. After his service he was employed for sixteen years as concept developer for TRW, an aerospace and automotive company, and then was CEO of a non-profit Internet provider for 18 months. Russ's articles have appeared in Comstock's Business, Capitol Journal, Trailer Life, Monitoring Times, and Idaho Magazine.

21 Responses to Prop 23 Update — Exodus: California Tax Revenue Plunges by 2221

  1. sean2829 says:

    It was interesting reading this story after reading an article last night in the LA Times on the “settlement” between the teacher’s union and Gov. Brown. The settlement was to increase the taxes a little more on the wealthy for 7 years rather than 5 and to increase the sales tax by only a quarter of a percent rather than a half as Gov. Brown had originally proposed. It will be interesting to see if the business round table, who had not rejected Brown’s original plan but had rejected the teacher’s union, will still be on board. The comments were most intersting though. The LA Times readers were mixed in their feedback but the ones who supported it pretty much said, if you think its so awful here in CA, why don’t you just leave. Apparently they are. Which reminds me of a joke a friend told me in college about what the wacked out speed freek said after he jumped off a building but before he hit the ground — so far so good.

  2. RL Crabb says:

    It’s all part of the master plan. Run everyone but the richest liberals out of the state, then raze the empty structures with electric bulldozers. The Eureka Ecotopia achieved!

  3. Todd Juvinall says:

    I think we may see a Constitutional Amendent here in Caleefornia to stop charging the people without kids, whether by choice through the child bearing years, or the old farts who can’t have them anymore, from paying the share of property tax to the school system from their property taxes. I have seen the government here go to a fee for service in many aspects of the duties we all thought were part of the system, so why would schools be any different I have been asked?

  4. sean2829 says:

    I have a problem with exempting people from paying for schools out of property taxes. How many of the “old farts” are receiving social security and Medicare that is being paid for by the parents of these children in pay roll taxes? How many of these parents are paying through the nose for health insurance because Medicare only covers 85% of the cost and allows hospitals to charge more for folks with private insurance? How many of these young families are paying 2-3 times as much for property taxes because they have not been grandfathered in by Prop 13? And how many of those same families have high mortgages that the old farts have paid off? I think young working families are being stretched to the limit these days. I’m pretty close to old fart status myself (my adult kids tell me I’m there) and I worry much more about the burdens we are leaving them.

    • B White says:

      You are correct, Social Security and Medicare is largely funded by those not collecting it.

      You are correct, it is unfair and a perversion of our system that one class is forced by government imposition to pay higher fees to private companies for health insurance to allow hospitals to provide care for people who don’t have insurance because it is too expensive largely due to the same government imposition.

      You are correct that prop 13 restricts the government from raising property taxes beyond what those on fixed incomes could afford in an effort to facilitate the government’s voting base.

      And you are correct that younger able bodied working families are typically paying mortgages during their working years while “old farts” that planned for the future paid off theirs because they knew they couldn’t rely on government giveaways. Ideally these younger families would learn by example.

      What you are wrong about is that it isn’t these realities that have “young working families stretched to the limit these days”. What is primarily responsible for “young working families being stretched to the limit these days” is government imposition in an effort to facilitate the interests of those in government and there voting base.

      You are wrong thinking that the portion of property taxes that are designated for schools should be relied on as solution to what you falsely perceive as inequities.

      • sean2829 says:

        The only point I was trying to make is that it is disingenuous if people don’t have kids in school that they should not have to pay for the portion of property taxes that goes to the schools. I will say this, I think in general, the more remote the government body, the less responsive and responsible it is to taxpayers. A big part of the mess that California is in is due to the fact that an ever increasing proportion of the taxes get funneled through Sacramento rather than local governments. Taxes collected and spent locally, are subjected to close scrutiny by local tax payers and probably less likely to go to boondoggles. Once it goes to Sacramento or Washington, the lobbyists and special interests who have residence in the capital cities get disproportionate influence and a lot of shenanigans take place.

  5. BobW is totally correct. SAean is not. The prblem some see in the inequity of the property tax is simple, it should be a fee for service like all the others paid by people. The tax was historically paid for county government and schools. The state took it after prop 13 and never looked back. What the state did though was convert many of the state mandated programs over to fee for service. You want something from the state monopoly? Pay guido for the pleasure of being mandated (or go to jail). So, why should schools be any different? The government imposes the fees through their “right” to use the “health and safety” provisions and “police powers” to do just about anything they want. Also, local government, even if they received all the property tax would have little if any ability tospend it as they desire. The state mandates how all money is spent except for a few bucks. So, a web has been created to remove the local decision makers from almost every decision.

    • sean2829 says:

      And that’s why California is such a mess.

    • Dena says:

      The real problem with Property taxes is the not the Government but the voter. I suspect many people rent and never see a Property tax bill and all the things they voted for in the past that we are still paying for. California is not the only one with this problem as I have just payed my Arizona bill and it is littered with ballot issues as well. Maybe we should make a law that if you own something you rent to others, you distribute a copy of the tax bill to each of your renters and explain that is one of the reasons the rent is so high. On the other hand, we have a city out here called Sun City. It has been around a good 50 years and is populated by older people. You can’t even move into it if you have young children living with you. The reason for this is they have built no schools and they don’t have a school tax. I for one don’t want to live there because something is missing when you don’t have children in the neighborhood but many people do live there and enjoy it.

  6. I am revuewing a DEIR which is about 4 inches thick and cost 350K. If you want any reasons to see why nothing is going on in our once great state, then you must read these things. There is a new section devoted specifically to AB32. Within the section is also a list of the other most recent laws and exeutive orders which are required to be analyzed and mitigated. We are toast.

  7. After next week I will scan it and send it too you. It is a tedious read but I am confident the DEIR will add a couple of million to the cost of the project, and all for nothing as far as I can read.

  8. David Maggs says:

    Gee tax revenue is off by 23%.

    If you look at almost every state in the nation these numbers are pretty consistent (some are better, New Hampshire at 19% and some are much worse 27% in Hawaii which attribute this drop to an increase in jet fuel and decrease in tourist base income), but your going to point the finger at AB32?

    Do you guys really like tunnel vision? I find it makes it hard to see the horizon through the fog!

  9. No fog, we are tring to save America from demise. You?

  10. B White says:

    Gee Davy Boy I guess tax revenue is off all over the country because the rates are too low hey?

  11. stevefrisch says:

    i think the point that Mr. Maggs is making is that just because tax revenue is down is no indication that there is a causal relationship between AB 32 and the decline in tax revenue in California.

    Tax revenue is down because of market failure. The allocation of goods and services was knocked out of kilter by the creation of a financial system that did not have appropriate checks and balances on how capital was invested, what protections were in place for consumers, how much leverage was allowed and what financial instruments were used. The correction has reallocated how we use and value goods and services.

    Simple economics, and nothing to do with AB32.

  12. No, it has all to do with AB32 and all the rest. The democrats have wrecked the state and now the country.

  13. David Maggs says:

    Todd, show us some type of empirical proof that what your saying is true?

    Otherwise this whole concept is nothing more accurate than the birthers Obama birth certificate nonsense.

    It’s really easy to make up more and more lies, but all we’re asking for is proof to back up these claims.

    Can you provide us with it?

    • A Californian and a American would have to be dumb, blind and mute not to know what I have said is untrue. You?

      • David Maggs says:

        Again Todd, can I see some type of empirical proof evidence supporting your claims?

        All I see are make claims of malfeasance, with no type of evidence to the contrary other than your word.

        With all due respect Todd, your “continued” history of these types of claims, is not sufficient, even with your being a Californian and American.

        So (In the words of Jerry Maguire) “Show me the money!”

  14. B White says:

    Stevie doesn’t even realize how badly he embarrasses himself by parroting out psychobabble he doesn’t have the means to comprehend. He would better serve himself by staying over on blogs where there exists a far more gullible audience.

    “market failure”, caused by lack of appropriate “checks and balances” and “protections for consumers”?

    He pulls this stuff of the Internet and because he thinks it sounds good he tries to make you think he knows what he is talking about
    If he did understand this he wouldn’t have run his own business into the ground. Consider that.
    This so called “market failure” was caused by his “checks and balances” that were imposed on these “financial instruments” supposedly in the interest of “consumer protections”. Exactly the opposite of Stevie’s interpretation.

    The correct term is government failure. Stevie would be the first one to support more of this government failure.

    And everyone knows exactly what I am talking about as opposed to Stevy’s incoherent babble.

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