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Joe Guzzardi Why Gov. Jerry Brown’s tax plan amounts to extortion

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Joe Guzzardi

Posted: Saturday, May 26, 2012 12:00 am | Updated: 8:43 am, Sat May 26, 2012.

Last week, California's already staggering $9 billion budget deficit ballooned to $16 billion. Gov. Jerry Brown would like you to believe that the state's economic crisis deepened by $7 billion overnight.

Either Sacramento's bureaucrats can't add, or Brown has been playing loose with facts since he was elected 18 months ago. My money is on the latter.

This year, tax collections have run $3.5 billion below what Brown calculated a mere four months ago. Spending has grown $2 billion above projections. The federal government and court ruling blocked some in-home health care savings Brown anticipated while the California Legislature balked at other cuts.

California, with an economy bigger than Russia's, has lost millions of jobs since the 2007 recession. The vanished jobs cost California, the most populated U.S. state, 24 percent of its revenue. As a result, the new $16 billion deficit puts additional pressure on Brown to increase California's income and sales taxes that are already higher than in any other state.

The news may be even worse. California's Legislative Analysts' Office, a credible, nonpartisan source, claims that $16 billion is too low. According to LAO spokesman Mac Taylor, monies Brown plans to collect from now-defunct local redevelopment agencies don't exist. Taylor pegs California's deficit at $17 billion.

Brown's patchwork solutions are familiar to Californians who traveled this road before. Brown wants spending cuts to health and welfare programs as well as a state worker furlough. If Brown has his way, state employees would work four 9.5-hour shifts and take a pay cut.

In other words, Brown's targets are the sickly, the needy and middle-class Californians scratching out a living in the third most expensive-to-live-in state.

Of course, there would be massive education cuts — unless voters approve Brown's tax plan that would keep the wolves from the door, at least for the time being. Some analysts, and I'm one of them, think that Brown's tax initiative is extortion. Pass it or the children will suffer. Since California already has some of the nation's most poorly educated students, it's hard to imagine how little they'll know if funding is cut.

As for colleges, the choices are equally grim. Less money from the state means probable tuition increases — again!

Another crucial question is what does the never-ending budget deficit mean for California's all-but-dead housing market? A few underpublicized statistics, added together, paint a bleak picture. California's unemployment rate (not seasonally adjusted) is 11.6 percent; the more important U-6 rate that includes those who are marginally employed is about 23 percent. That adds up to more than 2 million Californians out of work.

Another discouraging report found that within the last few weeks, more than 200,000 Americans lost their unemployment insurance; about 40 percent of them live in California. When you're out of work and no longer collecting unemployment insurance, you're not a potential home buyer.

April, historically one of the best months for tax receipts, came in at nearly $2.5 billion below the 2012-13 projections. As long as these economic patterns continue, the tax increases and service cuts they produce will keep housing prices soft.

A few other problems you may not have read about include a Department of Labor finding that California ranked dead last among the 50 states in job creation. This is counter to the national trend; 38 states posted job gains.

Finally, California's well-publicized problems have changed the state's image from one where people yearned to live in to one that should be avoided at all costs.

The first step in a recovery is honesty from government. The mostly successful effort to keep the public in the dark about what's really going on in Sacramento is self-defeating.

Joe Guzzardi retired from the Lodi Unified School District in 2008. Contact him at guzzjoe@yahoo.com.

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Welcome to the discussion.

14 comments:

  • John Kindseth posted at 8:08 am on Mon, May 28, 2012.

    John Kindseth Posts: 239

    Joe: I found this Monday morning ! Like yours, its very accurate.

    http://www.utsandiego.com/news/2012/may/26/budget-process-reflects-sacramentos-warped/

     
  • Patrick W Maple posted at 10:21 am on Sun, May 27, 2012.

    Pat Maple Posts: 1805

    You seee Darrell...this is why my grandmother always told me to read with both eyes!

    You can seeeeeeeeeeeeeeeeeeeeeeeee......

     
  • Darrell Baumbach posted at 9:27 am on Sun, May 27, 2012.

    Darrell Baumbach Posts: 9403

    One report stated...Brown's girlfriend at the time, Linda Ronstadt, who was quoted in a 1978 Rolling Stone magazine interview humorously calling him "Moonbeam".

    But in reality,most people did not care how his nick name came to be. Most thinking reasonable people who observed the radical whacked out appointees he made and policies he promoted concluded "Moonbeam Brown" was a great nickname for a man who many felt was literally crazy

     
  • Darrell Baumbach posted at 9:02 am on Sun, May 27, 2012.

    Darrell Baumbach Posts: 9403

    NetJets Announces Major Pilot Layoffs--- by Deidre Woollard (RSS feed)
    Nov 7th 2009 at 3:26AM

    NetJets Inc., the fractional ownership and plane leasing company owned by Warren Buffett's Berkshire Hathaway Inc., has announced major layoffs. Due to a slowdown in business travel and the overall usage of private jets the company is firing 495 pilots.

    Bloomberg quotes a statement from David Sokol, NetJets CEO who said that the decision came from looking at current and predicted flight demand. The news comes just around two months after Sokol took over and the company moved back to Columbus, Ohio.

    Currently the company owns more planes than it is using. NetJets employs over 3,000 pilots worldwide. The layoffs come after an earlier layoff of 350 non-pilot workers which was announced in September. Some are questioning whether or not the fractional private jet model still has a place in this economy. I think it does but that the scale may be smaller than these companies would like.

     
  • Patrick W Maple posted at 9:02 am on Sun, May 27, 2012.

    Pat Maple Posts: 1805

    Yes it was...it is called overregulation and taxiation. Taxed enough already maam.

     
  • Darrell Baumbach posted at 9:01 am on Sun, May 27, 2012.

    Darrell Baumbach Posts: 9403

    And surprise, surprise! Mr. Baumbach heroine, Meg Whitman, announced 40,000 layoffs for Hewlett Packard this week….That's what I call a "job creator."

    Finally, Ms Bobin comprehends how a healthy economy and business must operate in order to maintain its health and productivity. Indeed, Meg Whitman and Warren Buffet know exactly how to make sure an organization reminds viable financially.
    Why the layoffs? HP employees that remain are very happy because their jobs are more secure. People like you and me are happy because our 401k’s will not shrink, schools are happy because they can continue to get the tax revenue it gets for the children.

    Star Bucks also understands why nonproductive stores must be closed and employees layoffs take place. They want to exist…to live as a business entity which is not possible unless they do what they must to stay in business.

     
  • Joanne Bobin posted at 4:45 pm on Sat, May 26, 2012.

    Joanne Bobin Posts: 4485

    No, I don't subscribe to the Baumbach Bible.

    More like following in the footsteps of her predecessor, another failed politician.

    I suppose it was Obama's fault when Fiorina layed off the HP workforce and moved it overseas?

     
  • Patrick W Maple posted at 12:20 pm on Sat, May 26, 2012.

    Pat Maple Posts: 1805

    Thanks to BO...she was able to do that.

     
  • Patrick W Maple posted at 12:20 pm on Sat, May 26, 2012.

    Pat Maple Posts: 1805

    Yes I do. Did you read that on wikipedia? I lived JB and voted for him once...but not after he started driving his Plymouth.

     
  • Joanne Bobin posted at 11:25 am on Sat, May 26, 2012.

    Joanne Bobin Posts: 4485

    And surprise, surprise! Mr. Baumbach heroine, Meg Whitman, announced 40,000 layoffs for Hewlett Packard this week.

    That's what I call a "job creator."

     
  • Joanne Bobin posted at 11:10 am on Sat, May 26, 2012.

    Joanne Bobin Posts: 4485

    Do you know why Jerry Brown was called "Moonbeam," Mr. Maple.

     
  • Patrick W Maple posted at 10:14 am on Sat, May 26, 2012.

    Pat Maple Posts: 1805

    Moonbeam!!! You slay me... DB and Joe...this is all a ploy...if Governor Moonbeam sets the perameters for fiscal disaster at: "Either you bozos of CA give me more money or we will soon be going off a cliff" in order to pass his tax hikes it is likely we are going to be paying more in sales taxes.

    As DB says, either he was lying, is lying, is going to be lying, is going to be lying more (when the first lies are found out) OR as Joe says JB is just pandering to his base (we all know the four-day work week will become permanent {leaving more time for campaigning and cavorting in Sac} and the pay will go back up to where it is now in a few years)...so says J Beam. My opinion? His lips are moving.

    How better to energize your base than to tell them unless this passes...you are fired or at the least you will have 20% less incom. Motivation plus... to get them out there looking for votes in all the wrong places? Puttin' their signs in too many faces...lookin' for votes...Who wrote that song?

     
  • Joanne Bobin posted at 7:22 am on Sat, May 26, 2012.

    Joanne Bobin Posts: 4485

    Mr. Baumbach still harps on the issue of unions.

    http://blogs.sacbee.com/the_state_worker/2012/05/jerry-brown-tells-unions-to-brace-for-california-state-worker-pay-cuts.html

     
  • Darrell Baumbach posted at 6:01 am on Sat, May 26, 2012.

    Darrell Baumbach Posts: 9403

    Considering Brown's history and title of father of public California Unions, I am surprised the deficit is not 30 billion... great job Mr Brown!

    California could have had Meg Whitman as governor,but in its wisdom selected Brown. In my view,California deserves the consequences of it's actions.

     

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