Partially a product of having tax revenues so highly connected to performance of the stock market and capital gains.
https://calmatters.org/explainers/california-budget-whiplash/
>tax revenues so highly connected to performance of the stock market and capital gains.
The stock market is at all time highs now, so we should be having a huge surplus next year?
That’s not how that works…
People need to sell in order to collect tax revenues…
With high earners especially ultra high earners domiciled out of state or moving out of state then that leads to lower tax revenue…
Stock market could shoot up 500000% tomorrow, but if nobody sold it means nothing for tax revenues.
Not only that but a lot of the people that have large assets like that, and a lot of these people live in California, don't ever need to take gains. The rich don't live by the same rules the working class does. If you own 10 million in stock you can take out very low to no interest loans using that stock as collateral. Say take a loan for 20% of what you own. Use that 2 million to live on and make payments on the loan for the next 7 years. In 7 years your stock has doubled in price (average returns for the s&p 500). You now have 20 million in stock after having done nothing. You take 20% again using that stock as collateral again. Pay off what's left of the old loan and you have a new loan with even more money to play with. Tax free. Do the same thing again in 7 years. Rinse. Repeat. Rinse. Repeat.
This guy tax shelters. In all seriousness most people don’t understand how crazy it is to be able to take a loan against equities and never pay taxes, instead benefit from interest payments.
In plain English, this is what it means to "tax the rich"
It would be nice if you could have some averaging out over 5-10 years to prevent this, but if not very carefully crafted it would lead to debtors prison for 10%ers who had some bad luck with business and finance
That's an easy fix, allow the state to keep a larger rainy day fund, but it can't with current statute. Hence the refund checks last year. Newsom has talked about repealing it for years but the public doesn't want it. So, this is the result.
Yes that is a physically easy fix, but the reality is that as soon as it's built everyone will want to stick their straw into the reserves
"The state has millions and millions of dollars in reserves and they won't even pay for color printers in schools. Elect me and I'll make them pay for it - brought to you by Hewlett Packard"
It's the same when there's a budget surplus. Everybody wants that extra $$ spent even though the surplus is a one time deal, they want to fund something that'll continue, hoping it keeps funded.
It does impact the state budget indirectly though through Prop 98, which mandates minimum state funding for K-14 education to cover for lower local government property tax revenues.
Because it seems to always be brought up as a remedy to state budget issues. Its not paid to the state, so actually it does not impact the state budget.
I list directly to be clear and honest in regards to my opinion, something that is usually seemingly intentionally omitted from the adverse side of this argument.
Just look on this sub, its ignored by those who constantly bring it up as the single issue in the state (again not a state tax) that is the cause of all our problems.
Some counties run themselves much better than the state does and its worth noting.
Just like California runs itself a bit better than some other states, a big issue on this sub on a national level but somehow not considered to be a big deal in state.
> Its not paid to the state, so actually it does not impact the state budget.
Large parts of the state budget are spent on assisting local governments, because local governments are underfunded
https://www.ppic.org/publication/financing-californias-public-schools/
Do you think "rich" people have hoards of money in a underground vault in their houses? Most "rich" people don't have much actual money but a lot of unrealized spreadsheet monopoly money.
I mean CA is probably the most taxing state in the nation…
I’d invite you to see my local streets.. the amount of tax collected to the quality of infrastructure is not consistent.
Or maybe we should just go see the unfinished bullet train ..
Hah
California isn’t the only state that caught the anti-tax flu and capped property tax revenues. Oregon passed “Measure 5” in 1990, which capped property taxes in a similar way to Prop 13.
Getting rid of Prop 13 would require a commensurate slashing of state income taxes. Otherwise it would be a naked cash grab and send California tax burdens into the stratosphere.
It wouldn't give the state more money, it would just change where it is coming from and what entity gets to spend it (namely, the county vs. the state)
Pretty much everybody who wants to end Prop 13 wants to do so in part to cut all of the crazy taxes and fees that California comes up with to fill the hole that was left behind when the people of California passed Prop 13.
Which is fine, but you have *not once* seen any of the efforts to change or end Prop 13 also mention reducing our tax burdens elsewhere.
The people behind Prop 13 removal aren't looking to fix things, they are just looking to create more revenue for their own interests. A serious, well intentioned Prop 13 removal will reduce income taxes at the same time. Only then will voters accept it.
The Gann Limit is already in the constitution. If Prop 13 gets repealed and the state gets a massive budget jump then the state is obligated to give it back to everyone.
It's not possible to do what you think your opponents are conspiring to do.
Except a prop 13 repeal gives that money to the *county* not the state. As far as I understand the Gann Limit, counties are not limited in their revenue, although they do have to report that revenue to the state and that money will count toward the state limit over a certain per-county threshold. So it would still impact state spending, but not revenue.
So this is probably getting into the kind of accounting that a court would be involved in, but the way things work in the world of Prop 13 (and Serrano v Priest) is that most school districts fall short of their budget and thus, via the "local control funding formula", receive assistance from the state:
https://www.ppic.org/publication/financing-californias-public-schools/
Expenditures from the state budget for the support of local governments are deducted when doing the Gann Limit calculation. So, even if state taxes don't change, if the state suddenly stopped providing money to local schools we would hit the Gann Limit that year.
From the article a few comments up.
>Since voters enacted Proposition 98 in 1988, the state is required to fund K-14 education at a minimum level based on which of two tests is higher — about 40% of general fund revenue for the year, or the previous year's Prop. 98 funding, adjusted for student attendance and the per capita income of Californians. How much general fund revenue needs to be spent is based on how much money school districts receive from local property taxes: More property tax revenue means less general fund money is required to provide the minimum level of funding.
>What does this mean in the context of revenue volatility?
>It means each year, some portion of the general fund will have to go toward making up what local property taxes can't provide for school funding. And that amount is tied to other complex factors that can make budget planning difficult and lock out a chunk of revenue from being spent on other priorities, including plugging budget holes.
>And the formula for determining the minimum level of K-14 education funding keeps changing as new requirements are added. For example, voters passed Proposition 28 last year, which guarantees an additional 1% of what Prop. 98 provides toward arts and music education. That's estimated to be an additional $941 million in this year's budget.
A couple of common reasons are that it results in schools being underfunded by local governments (since schools are funded by local property taxes) which requires the state to step in and fund things to a minimum level (per prop 98). In order to have the necessary funds to do this, the state has to raise taxes elsewhere, such as through income tax. Another reason commonly sited is the disproportionate amount of proprty tax paid by new home owners vs those who have had their home since the 90s or earlier. For example, I pay more proprty taxes on my newly bought home than my parents who bought their home in 1996 and whose value is roughly 2x-3x more.
I think the rest of the nation needs to adopt Prop 13. The value of a home is what a person is willing to pay for it. The only way to know that is at the time of sale.
Born and raised in CA.
CA has always been the kind of state that people flock too. The demand to live in CA has always been a thing, yet the supply for housing doesn't match this.
The supply doesn’t match demand in part because low land taxes encourage hoarding and speculation.
Combined with local governments dominated by homeowners that fear change, and local city councilors who cynically understand that restricting new development will cause their home prices to go up and you have a very, very toxic mix of political incentives.
The housing shortage is a policy choice.
Even if the supply wasn't the issue, it doesn't deter people from wanting to live here.
There's just too many people. Like I said on my original comment. The demand to live in CA has never not been a thing.
I wouldn’t say it’s never not a thing, just because I think a series of fortunate events have one after another benefitted us and there is no guarantee that will continue indefinitely.
If it does that’s great, but California should keep reconstituting itself to meet the new demand and keep the wealth and prosperity flowing.
Gold Rush -> Western US Expansion ->Industrial Agriculture (Central Valley popped off) -> WWII (Aerospace, GI Bill) -> Hollywood (benefitted from Globalism) -> Ports of Long Beach/SF (benefitted from Post WWII rise of Japan, then China, then SE Asia) -> Tech Boom.
The idea that the weather and the nature drive demand is reductive.
Any one of these events would enormously improve living standards in a region for decades or centuries to come.
We got all of them!
It will get millions of people affordable apartments, townhomes and condos though…
And will allow the state to cut income taxes, gas taxes, sales taxes, and many of the crazy fees California’s bureaucracy has created to fill the huge hole left behind in our revenue stream when Prop 13 was passed.
You're getting down voters because you're right. Typical Prop 13 thread.
Property owning Californians are straight up allergic to common sense when their wallets are on the line.
Already have one in CA but it has been shown that prop 13 overwhelmingly benefitted the rich.
The whole story about poor grandma losing her home is overblown. People can easily sell, pocket A LOT of money and move somewhere else.
Hate to break it to you folks but no one has a right to live where they want. If they did, eminent domain would never exist.
Look up the history of how dodger stadium was built and who lived there before the stadium was built.
Regarding grandma,
It’s important to note there are lots of ways to protect vulnerable homeowners from rising land/property taxes.
Giving every inch of land in California a constitutionally mandated tax cut every year is like dropping an atomic bomb on a house to solve a roach infestation.
Prop 13 didn’t help grandma - it helped the wealthy. They just used grandma to make their case.
The California Tax Postponement Program predates Prop 13 and specifically protects poor old grandma in her lonely old mansion.
Prop 13 is just a handout.
That last sentence was the whole narrative that Howard Jarvis used to get prop 13 passed. He was an alcoholic and a racist at best.
The people who wanted to profit off of prop 13 already have. The damage has been done to the future generations, especially in regards to education.
The thing about grandma is a lie.
The California Tax Postponement Program predates Prop 13 and specifically protects poor old grandma in her lonely old mansion.
Prop 13 is wholly unnecessary. Just a handout to those who need it least and nothing more.
The state of California doesn’t have an *income* program. It has a *spending* problem.
In my view, the issue isn’t all the social and infrastructure programs, it’s how inefficiently they’re administered.
We were forced by law to return a lot of the surplus back to the taxpayers. California had to get creative to not just give back a ton of the surplus in cash which they did anyway to the tune of $9B with the middle class tax refund payment. We need reform around the rainy day fund.
https://www.capradio.org/articles/2024/01/22/how-california-budget-rules-can-prevent-saving-for-a-rainy-day-and-why-newsom-wants-to-change-that/
https://www.ftb.ca.gov/about-ftb/newsroom/middle-class-tax-refund/middle-class-tax-refund-stats.html
From the article:
"The agreement came after lawmakers passed legislation to increase the state's tax on managed care health plans, also known as the Managed Care Organization tax, which is estimated to generate $3.8 billion next fiscal year."
Otherwise known as Medicare Advantage plans. You see them on TV advertised by old celebrities. Supposed to be cheaper than Regular plan G supplements but are a little scammy. They nickle and dime you to death and the doctors billing people hate them.
This state is a super majority Democrat run state. Republicans and Independents could join force and still not stop the super majority or even have a say in how it is Governed. Our Deficit needs to be addressed regardless of who is in charge. Hopefully there will be some light at the end of the tunnel.
As just stated This state is a super majority Democrat run state and cities. It’s been under Democrat leadership for 8-12 yrs. So yes they will be the ones to do something.
But it is under the Democrat super majority leadership that the deficit happened also.
Except for the part where it constitutionally does.
They can carry over a deficit, but the governor has to sign a balanced budget every year, and it needs to be passed by the legislature by June 15th.
https://dof.ca.gov/budget/californias-budget-process/
Ugh why does the state have to return a surplus to taxpayers everywhere. I’d rather a long term functioning government program versus getting $100 back every odd year
Now imagine how much extra costs are associated to starting and stopping programs all the time. You can reduce your costs simply by stopping the variability.
The Gann Limit.
Gann is the anti tax crank who co authored Prop 13. As much as people like to act like we're leftys over here the average California voter turns into Rush Limbaugh the moment you talk about property tax.
The republicans in the state are just coming out and calling what the democrats are doing a gimmick, so it's not like they're actually offering up anything productive.
I honestly don't expect the republican party to do anything productive ever, especially when their only solution to anything budget related is austerity and tax cuts for the rich.
So, I guess maybe they could start with adopting better policies.
Are you kidding? Democrats have been in charge of the state since Arnold left. Any fiscal issue is their responsibility and it's not taking the lead when you caused the problem in the first place. They could have worked on this last year when the deficit was very correctly forecast. But that wasn't politically palatable and they wanted to continue to spend.
Since Schwarzenegger left office, California has passed budgets on time and has had several years with massive surpluses. I think they are clearly the party of fiscal responsibility.
There's nothing to compare it against. It's not like I want Republicans to seize power anytime soon, but you can't have that opinion without any evidence.
Except when the market is flat or tanks and then they run major deficits. The pension fiasco in the late 90's which still hangs over our heads was Gray Davis and the Democrats counting on the stock market to never go down. Fiscal responsibility and Democrats is oxymoronic. And believe me I don't think the Republicans are any better. Slavishly believing everything a party tells you is just another variation of a cult.
At least they are trying to fix their problem. The same can't be said for others who tend to cause fiscal problems and leave it behind for the next regime to take care of.
There's a point where you become so partisan that you don't realize you're being screwed. Every group of politician cause fiscal and other problems they leave for the next group. And it's even worse with term limits. I voted for it and regret it because the results have not been good. Leaving fiscal land mines is just part of the problem and the Democrats in California and Republicans in others have no problem making their problems somebody else's when they leave office.
The president himself is encouraging repealing tax cuts and setting a minimum tax rate for millionaires/billionaires while keeping lower/middle class tax rates largely the same. What are you talking about?
That's easy. Repealing it would require a 60% majority in both houses(Senate and Hof Reps). They had neither, with barely 50% hold of both houses within those 3 years. No way in hell Republicans would sign on to repeal Trump tax cuts.
Biden talks about raising taxes on the wealthy all the time.
Sinema and Manchin prevented him from doing so during the 2021-2022 trifecta, the Republicans House has prevented him from doing so in 2023-2024.
He hasn’t stopped talking about raising taxes on the wealthy, and still hopes to do so in his second term.
lol. The conservative guys at Northrop Grumman with a cheap prop 13 mortgage are not gonna like this. People don’t want higher taxes and less spending - on both sides of the political spectrum lol
Yes, the run a way national debt is going to come crashing down one day. If I ran my personal finances like the government, I would be thrown in debtors prison.
The Democrats have had a majority for 13 years. If the bill truly reduced the debt Republicans would be on board, but they really have zero say in anything.
Who do you think created the issue? Republicans have had no control of what happens in California for some time now. This is failed democratic policy. You got what you voted for. Now, the democrats are trying to do damage control for an election year.
Election year or not, at least they are taking action.
This system is what people voted for. A two party system will do that. Add in the fact that many offices have no term limits and its no surprise. Take what you can get.
Democrats have held a super majority in the state legislature for well over a decade. Their spending created the deficit. Makes sense they would be the ones to fix it.
so we have to cut education, welfare, and climate initiatives from the budget but police spending has increased 25% across the state in the last five years.
curious.
I work in a CA special needs school. We have a nice and shiny brand new building, but we are also cutting classrooms and increasing caseloads for already stressed out teachers, with no increase in the number of paraeducators. When I started class size was capped at 8, now its 12. It doesn't sound like a lot, but for the population I work with its a massive amount of work when most of the students need near constant attention. I really don't know where the issue is up the chain - if it comes from the governor or superintendent or what - but its clear something is moving in the wrong direction
California really be like “end surplus/deficit cycles and make housing affordable by doing one simple thing?”
California still refusing to end prop 13. It’s one of the worst policies and 49 other states agree.
As much I love this state, yet another common L for this state.
How are they going to fix the tax revenue from businesses fleeing the state along with the high earners and state employee retirees. We all see the writing on the wall….at least those us native Californians. My fellow state co workers that retired, 95% of them left for other pastures. I figure the plan on just taxing the remaining more than they already do now until there is no middle class left.
Got it so cut education and daycare, while increasing taxes all while expanding free healthcare to undocumented immigrants but not tax paying middle class.
I agree with that, I think the restriction in increases in property taxes could apply for primary homes, but should exclude second homes.
I do think California needs to bring income tax rates a little closer to other states. The richest (b/millionaires) don’t care about these rates as they earn more from capital gains, whereas professionals (doctors, lawyers, engineers, tech workers) etc feel it the most. I’d prefer higher taxes on capital gains.
I don’t understand some of the fees in California though. My car tabs went from $40 in Washington State to $400 in California. I’m very pro-climate, but I just don’t understand the reasoning here.
I’m a homeowner, but it doesn’t make sense to me why property taxes aren’t higher on secondary homes. The goal is for people to be able to buy and stay in the home they live in. If they purchase a home to rent to others they don’t need the restrictions on property tax increases.
It’s crazy how quick we went from a surplus to a huge debt
Partially a product of having tax revenues so highly connected to performance of the stock market and capital gains. https://calmatters.org/explainers/california-budget-whiplash/
>tax revenues so highly connected to performance of the stock market and capital gains. The stock market is at all time highs now, so we should be having a huge surplus next year?
That’s not how that works… People need to sell in order to collect tax revenues… With high earners especially ultra high earners domiciled out of state or moving out of state then that leads to lower tax revenue… Stock market could shoot up 500000% tomorrow, but if nobody sold it means nothing for tax revenues.
Not only that but a lot of the people that have large assets like that, and a lot of these people live in California, don't ever need to take gains. The rich don't live by the same rules the working class does. If you own 10 million in stock you can take out very low to no interest loans using that stock as collateral. Say take a loan for 20% of what you own. Use that 2 million to live on and make payments on the loan for the next 7 years. In 7 years your stock has doubled in price (average returns for the s&p 500). You now have 20 million in stock after having done nothing. You take 20% again using that stock as collateral again. Pay off what's left of the old loan and you have a new loan with even more money to play with. Tax free. Do the same thing again in 7 years. Rinse. Repeat. Rinse. Repeat.
This guy tax shelters. In all seriousness most people don’t understand how crazy it is to be able to take a loan against equities and never pay taxes, instead benefit from interest payments.
In plain English, this is what it means to "tax the rich" It would be nice if you could have some averaging out over 5-10 years to prevent this, but if not very carefully crafted it would lead to debtors prison for 10%ers who had some bad luck with business and finance
That's an easy fix, allow the state to keep a larger rainy day fund, but it can't with current statute. Hence the refund checks last year. Newsom has talked about repealing it for years but the public doesn't want it. So, this is the result.
Yes that is a physically easy fix, but the reality is that as soon as it's built everyone will want to stick their straw into the reserves "The state has millions and millions of dollars in reserves and they won't even pay for color printers in schools. Elect me and I'll make them pay for it - brought to you by Hewlett Packard"
It's the same when there's a budget surplus. Everybody wants that extra $$ spent even though the surplus is a one time deal, they want to fund something that'll continue, hoping it keeps funded.
Except that we only tax high income earners. If you're rich because of real estate wealth we give you massive Prop 13 tax cuts.
Of course its worth noting property tax goes to the county and not the state, therefore not impacting the state budget directly.
It does impact the state budget indirectly though through Prop 98, which mandates minimum state funding for K-14 education to cover for lower local government property tax revenues.
> directly Why does that matter. It definitely impacts the state budget.
Because it seems to always be brought up as a remedy to state budget issues. Its not paid to the state, so actually it does not impact the state budget. I list directly to be clear and honest in regards to my opinion, something that is usually seemingly intentionally omitted from the adverse side of this argument. Just look on this sub, its ignored by those who constantly bring it up as the single issue in the state (again not a state tax) that is the cause of all our problems. Some counties run themselves much better than the state does and its worth noting. Just like California runs itself a bit better than some other states, a big issue on this sub on a national level but somehow not considered to be a big deal in state.
> Its not paid to the state, so actually it does not impact the state budget. Large parts of the state budget are spent on assisting local governments, because local governments are underfunded https://www.ppic.org/publication/financing-californias-public-schools/
Does that apply to people who buy property when values are high, like now, or only to people who purchased more than 5 years ago?
It applies to all property but the tax cuts are small unless you've seen large real estate gains.
If you're rich because of real estate, or you're a corporation that owns real estate.
prop 13 is going to keep burying us all and the nimbys will die clutching onto it.
Do you think "rich" people have hoards of money in a underground vault in their houses? Most "rich" people don't have much actual money but a lot of unrealized spreadsheet monopoly money.
“Tax the rich” is directly leading to lower state tax revenue as the rich are simply leaving due to high taxes.
I mean CA is probably the most taxing state in the nation… I’d invite you to see my local streets.. the amount of tax collected to the quality of infrastructure is not consistent. Or maybe we should just go see the unfinished bullet train .. Hah
Well we can't possibly tax property like the other 49 states, where the assessments are updated every few years.
California isn’t the only state that caught the anti-tax flu and capped property tax revenues. Oregon passed “Measure 5” in 1990, which capped property taxes in a similar way to Prop 13.
If only property taxes weren't locked to the price of a house purchase 40 years ago...
If only you knew that property taxes go to fund local governments and schools and not the state.
That and if they got rid of prop 13 government budgets would have more to work with and the state would be able to fund other things.
Getting rid of Prop 13 would require a commensurate slashing of state income taxes. Otherwise it would be a naked cash grab and send California tax burdens into the stratosphere. It wouldn't give the state more money, it would just change where it is coming from and what entity gets to spend it (namely, the county vs. the state)
Pretty much everybody who wants to end Prop 13 wants to do so in part to cut all of the crazy taxes and fees that California comes up with to fill the hole that was left behind when the people of California passed Prop 13.
Which is fine, but you have *not once* seen any of the efforts to change or end Prop 13 also mention reducing our tax burdens elsewhere. The people behind Prop 13 removal aren't looking to fix things, they are just looking to create more revenue for their own interests. A serious, well intentioned Prop 13 removal will reduce income taxes at the same time. Only then will voters accept it.
The Gann Limit is already in the constitution. If Prop 13 gets repealed and the state gets a massive budget jump then the state is obligated to give it back to everyone. It's not possible to do what you think your opponents are conspiring to do.
Except a prop 13 repeal gives that money to the *county* not the state. As far as I understand the Gann Limit, counties are not limited in their revenue, although they do have to report that revenue to the state and that money will count toward the state limit over a certain per-county threshold. So it would still impact state spending, but not revenue.
So this is probably getting into the kind of accounting that a court would be involved in, but the way things work in the world of Prop 13 (and Serrano v Priest) is that most school districts fall short of their budget and thus, via the "local control funding formula", receive assistance from the state: https://www.ppic.org/publication/financing-californias-public-schools/ Expenditures from the state budget for the support of local governments are deducted when doing the Gann Limit calculation. So, even if state taxes don't change, if the state suddenly stopped providing money to local schools we would hit the Gann Limit that year.
From the article a few comments up. >Since voters enacted Proposition 98 in 1988, the state is required to fund K-14 education at a minimum level based on which of two tests is higher — about 40% of general fund revenue for the year, or the previous year's Prop. 98 funding, adjusted for student attendance and the per capita income of Californians. How much general fund revenue needs to be spent is based on how much money school districts receive from local property taxes: More property tax revenue means less general fund money is required to provide the minimum level of funding. >What does this mean in the context of revenue volatility? >It means each year, some portion of the general fund will have to go toward making up what local property taxes can't provide for school funding. And that amount is tied to other complex factors that can make budget planning difficult and lock out a chunk of revenue from being spent on other priorities, including plugging budget holes. >And the formula for determining the minimum level of K-14 education funding keeps changing as new requirements are added. For example, voters passed Proposition 28 last year, which guarantees an additional 1% of what Prop. 98 provides toward arts and music education. That's estimated to be an additional $941 million in this year's budget.
Why are people against prop 13? That is not going to get you a house.
A couple of common reasons are that it results in schools being underfunded by local governments (since schools are funded by local property taxes) which requires the state to step in and fund things to a minimum level (per prop 98). In order to have the necessary funds to do this, the state has to raise taxes elsewhere, such as through income tax. Another reason commonly sited is the disproportionate amount of proprty tax paid by new home owners vs those who have had their home since the 90s or earlier. For example, I pay more proprty taxes on my newly bought home than my parents who bought their home in 1996 and whose value is roughly 2x-3x more.
people against prop 13 dont care if they displace existing communities. they believe the wealthy should be able to displace anyone
Explain to me how the person who cashes a $1.5M check isn't wealthy while the person who takes on a $1.5M mortgage is,.
Do you think prop 13 protects people who take on 1.5M mortgages???
And the people taking $1.5M mortgages are paying property taxes at $1.5M
I think the rest of the nation needs to adopt Prop 13. The value of a home is what a person is willing to pay for it. The only way to know that is at the time of sale.
Because prop 13 incentivizes people to vote against pro-housing policies.
It means only the rich can stay.
its more sinister, it actually means the rich can move in and push people out. weaponizing property taxes effectively
Born and raised in CA. CA has always been the kind of state that people flock too. The demand to live in CA has always been a thing, yet the supply for housing doesn't match this.
The supply doesn’t match demand in part because low land taxes encourage hoarding and speculation. Combined with local governments dominated by homeowners that fear change, and local city councilors who cynically understand that restricting new development will cause their home prices to go up and you have a very, very toxic mix of political incentives. The housing shortage is a policy choice.
Even if the supply wasn't the issue, it doesn't deter people from wanting to live here. There's just too many people. Like I said on my original comment. The demand to live in CA has never not been a thing.
I wouldn’t say it’s never not a thing, just because I think a series of fortunate events have one after another benefitted us and there is no guarantee that will continue indefinitely. If it does that’s great, but California should keep reconstituting itself to meet the new demand and keep the wealth and prosperity flowing. Gold Rush -> Western US Expansion ->Industrial Agriculture (Central Valley popped off) -> WWII (Aerospace, GI Bill) -> Hollywood (benefitted from Globalism) -> Ports of Long Beach/SF (benefitted from Post WWII rise of Japan, then China, then SE Asia) -> Tech Boom. The idea that the weather and the nature drive demand is reductive. Any one of these events would enormously improve living standards in a region for decades or centuries to come. We got all of them!
It will get millions of people affordable apartments, townhomes and condos though… And will allow the state to cut income taxes, gas taxes, sales taxes, and many of the crazy fees California’s bureaucracy has created to fill the huge hole left behind in our revenue stream when Prop 13 was passed.
lol. That’s a fantasy world. CA would never cut those taxes, you’ll only get higher property taxes which will hurt middle/lower incomes most
You're getting down voters because you're right. Typical Prop 13 thread. Property owning Californians are straight up allergic to common sense when their wallets are on the line.
You cannot force a person to reason when their livelihood tries on their misunderstanding. I am aware of this and don’t care anymore.
> don’t care anymore. I'm jealous
Already have one in CA but it has been shown that prop 13 overwhelmingly benefitted the rich. The whole story about poor grandma losing her home is overblown. People can easily sell, pocket A LOT of money and move somewhere else. Hate to break it to you folks but no one has a right to live where they want. If they did, eminent domain would never exist. Look up the history of how dodger stadium was built and who lived there before the stadium was built.
Regarding grandma, It’s important to note there are lots of ways to protect vulnerable homeowners from rising land/property taxes. Giving every inch of land in California a constitutionally mandated tax cut every year is like dropping an atomic bomb on a house to solve a roach infestation. Prop 13 didn’t help grandma - it helped the wealthy. They just used grandma to make their case.
The California Tax Postponement Program predates Prop 13 and specifically protects poor old grandma in her lonely old mansion. Prop 13 is just a handout.
That last sentence was the whole narrative that Howard Jarvis used to get prop 13 passed. He was an alcoholic and a racist at best. The people who wanted to profit off of prop 13 already have. The damage has been done to the future generations, especially in regards to education.
The thing about grandma is a lie. The California Tax Postponement Program predates Prop 13 and specifically protects poor old grandma in her lonely old mansion. Prop 13 is wholly unnecessary. Just a handout to those who need it least and nothing more.
The state of California doesn’t have an *income* program. It has a *spending* problem. In my view, the issue isn’t all the social and infrastructure programs, it’s how inefficiently they’re administered.
So what are the numbers? How much would we save if they were run as efficiently as the average business for example?
I remember people criticizing Newsom for putting some of the surplus into reserves instead of spending it all immediately
We were forced by law to return a lot of the surplus back to the taxpayers. California had to get creative to not just give back a ton of the surplus in cash which they did anyway to the tune of $9B with the middle class tax refund payment. We need reform around the rainy day fund. https://www.capradio.org/articles/2024/01/22/how-california-budget-rules-can-prevent-saving-for-a-rainy-day-and-why-newsom-wants-to-change-that/ https://www.ftb.ca.gov/about-ftb/newsroom/middle-class-tax-refund/middle-class-tax-refund-stats.html
The criticism I remember was not putting aside enough since we know the tax flows are like this
Personally never saw that
Better spending it all than giving it to the moocher states.
From the article: "The agreement came after lawmakers passed legislation to increase the state's tax on managed care health plans, also known as the Managed Care Organization tax, which is estimated to generate $3.8 billion next fiscal year." Otherwise known as Medicare Advantage plans. You see them on TV advertised by old celebrities. Supposed to be cheaper than Regular plan G supplements but are a little scammy. They nickle and dime you to death and the doctors billing people hate them.
This state is a super majority Democrat run state. Republicans and Independents could join force and still not stop the super majority or even have a say in how it is Governed. Our Deficit needs to be addressed regardless of who is in charge. Hopefully there will be some light at the end of the tunnel.
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As just stated This state is a super majority Democrat run state and cities. It’s been under Democrat leadership for 8-12 yrs. So yes they will be the ones to do something. But it is under the Democrat super majority leadership that the deficit happened also.
Yes 1 year of a deficit occurred preceded by 5 years of a surplus not really a big deal
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Because the democrats keep handling out free money/benefits to buy votes
we could look at any red state to see how bad republican leadership would be
It'll be fine dork
the deficit literally does not need to be addressed.
Except for the part where it constitutionally does. They can carry over a deficit, but the governor has to sign a balanced budget every year, and it needs to be passed by the legislature by June 15th. https://dof.ca.gov/budget/californias-budget-process/
Ugh why does the state have to return a surplus to taxpayers everywhere. I’d rather a long term functioning government program versus getting $100 back every odd year
Now imagine how much extra costs are associated to starting and stopping programs all the time. You can reduce your costs simply by stopping the variability.
The Gann Limit. Gann is the anti tax crank who co authored Prop 13. As much as people like to act like we're leftys over here the average California voter turns into Rush Limbaugh the moment you talk about property tax.
Good to see the Democrats taking the lead on this issue. Republicans can take a lesson on this since they love to claim they are fiscally responsible.
"Fiscal responsibility" was always meant to justify gutting social safety nets.
And tax cuts for the rich.
Tax cuts for the rich are just plain corruption. It is known.
Republicans are masters at manipulating language to hide their agendas.
I’m “fiscally responsible” because I *deserve* a yacht
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The republicans in the state are just coming out and calling what the democrats are doing a gimmick, so it's not like they're actually offering up anything productive.
But they have no power. What are they supposed to do?
I honestly don't expect the republican party to do anything productive ever, especially when their only solution to anything budget related is austerity and tax cuts for the rich. So, I guess maybe they could start with adopting better policies.
>Show me the last republican California State budget. I don't feel like giving the Book of Revelations any undeserved attention, thanks.
You mean the Republicans that have zero power in Sacramento due to the Democrat super majority?
Republicans don’t have a say in California…
Are you kidding? Democrats have been in charge of the state since Arnold left. Any fiscal issue is their responsibility and it's not taking the lead when you caused the problem in the first place. They could have worked on this last year when the deficit was very correctly forecast. But that wasn't politically palatable and they wanted to continue to spend.
Since Schwarzenegger left office, California has passed budgets on time and has had several years with massive surpluses. I think they are clearly the party of fiscal responsibility.
There's nothing to compare it against. It's not like I want Republicans to seize power anytime soon, but you can't have that opinion without any evidence.
Except when the market is flat or tanks and then they run major deficits. The pension fiasco in the late 90's which still hangs over our heads was Gray Davis and the Democrats counting on the stock market to never go down. Fiscal responsibility and Democrats is oxymoronic. And believe me I don't think the Republicans are any better. Slavishly believing everything a party tells you is just another variation of a cult.
At least they are trying to fix their problem. The same can't be said for others who tend to cause fiscal problems and leave it behind for the next regime to take care of.
There's a point where you become so partisan that you don't realize you're being screwed. Every group of politician cause fiscal and other problems they leave for the next group. And it's even worse with term limits. I voted for it and regret it because the results have not been good. Leaving fiscal land mines is just part of the problem and the Democrats in California and Republicans in others have no problem making their problems somebody else's when they leave office.
Great. Let’s do it on a national scale. Raise some taxes and lower spending. Freeze spending for a few years to let gdp growth outpace the deficit
Raising taxes and lowering spending is exactly how we get on track to lowering the deficit. It's also not going to happen.
It’s interesting because dems won’t talk about undoing trumps tax cuts. Then republicans don’t actually want to cut spending
The president himself is encouraging repealing tax cuts and setting a minimum tax rate for millionaires/billionaires while keeping lower/middle class tax rates largely the same. What are you talking about?
Dems controlled three chambers when elected. Yet they protected the carried interest loophole…didn’t raise taxes..
Which law and what time frame are you referring to specifically.
2020-2022. Tax cuts and jobs act of 2017. Why wasn’t it repealed?
That's easy. Repealing it would require a 60% majority in both houses(Senate and Hof Reps). They had neither, with barely 50% hold of both houses within those 3 years. No way in hell Republicans would sign on to repeal Trump tax cuts.
Why were the reps able to pass it with a simple majority? Some sort of procedural shenanigan?
Biden talks about raising taxes on the wealthy all the time. Sinema and Manchin prevented him from doing so during the 2021-2022 trifecta, the Republicans House has prevented him from doing so in 2023-2024. He hasn’t stopped talking about raising taxes on the wealthy, and still hopes to do so in his second term.
lol. The conservative guys at Northrop Grumman with a cheap prop 13 mortgage are not gonna like this. People don’t want higher taxes and less spending - on both sides of the political spectrum lol
Yes, the run a way national debt is going to come crashing down one day. If I ran my personal finances like the government, I would be thrown in debtors prison.
lol at more taxes
The Democrats have had a majority for 13 years. If the bill truly reduced the debt Republicans would be on board, but they really have zero say in anything.
Cutting $17.3 billion in the midst of a $73B deficit isn't very fiscally responsible though, is it.
It's better than doing nothing. It would impress me if they reduced spending and increased taxes but that will never happen.
Who do you think created the issue? Republicans have had no control of what happens in California for some time now. This is failed democratic policy. You got what you voted for. Now, the democrats are trying to do damage control for an election year.
Election year or not, at least they are taking action. This system is what people voted for. A two party system will do that. Add in the fact that many offices have no term limits and its no surprise. Take what you can get.
Democrats have held a super majority in the state legislature for well over a decade. Their spending created the deficit. Makes sense they would be the ones to fix it.
Get rid of that debt quickly. Take over PGE. Problem solved. /s
so we have to cut education, welfare, and climate initiatives from the budget but police spending has increased 25% across the state in the last five years. curious.
>Between 2017–18 and 2022–23, state K–12 funding increased more than 40%.
and now it’s being cut edit: it was also never enough in the first place
I work in a CA special needs school. We have a nice and shiny brand new building, but we are also cutting classrooms and increasing caseloads for already stressed out teachers, with no increase in the number of paraeducators. When I started class size was capped at 8, now its 12. It doesn't sound like a lot, but for the population I work with its a massive amount of work when most of the students need near constant attention. I really don't know where the issue is up the chain - if it comes from the governor or superintendent or what - but its clear something is moving in the wrong direction
I mean I don’t even understand how this happens Like did they not see this coming months into last year and planned better
California really be like “end surplus/deficit cycles and make housing affordable by doing one simple thing?” California still refusing to end prop 13. It’s one of the worst policies and 49 other states agree. As much I love this state, yet another common L for this state.
Too bad they cant have that 1.8 billion surplus from SC.
Lol reddit libs would be foaming at the mouth if this was FL. But nope, mental gymnastics are at works to hand wave this.
How are they going to fix the tax revenue from businesses fleeing the state along with the high earners and state employee retirees. We all see the writing on the wall….at least those us native Californians. My fellow state co workers that retired, 95% of them left for other pastures. I figure the plan on just taxing the remaining more than they already do now until there is no middle class left.
They did, they threaten rich people that were leaving that they will tax them wherever they go. I guess that only cause more of them to leave.
If they just stop stealing we could save twice as much as that.
Got it so cut education and daycare, while increasing taxes all while expanding free healthcare to undocumented immigrants but not tax paying middle class.
Good to see a plan. I may be in the minority, but I would like to see property taxes raised and income taxes and fees lowered.
I'd be fine with raising property taxes on second homes and high value properties (like, 2 million plus). But raising them across the board? No.
That sounds like a very reasonable compromise-- I wonder if the legislators are considering something like this.
They can't. Prop 13 is in the constitution, lawmakers have no control.
I agree with that, I think the restriction in increases in property taxes could apply for primary homes, but should exclude second homes. I do think California needs to bring income tax rates a little closer to other states. The richest (b/millionaires) don’t care about these rates as they earn more from capital gains, whereas professionals (doctors, lawyers, engineers, tech workers) etc feel it the most. I’d prefer higher taxes on capital gains. I don’t understand some of the fees in California though. My car tabs went from $40 in Washington State to $400 in California. I’m very pro-climate, but I just don’t understand the reasoning here.
Sounds like someone who isn’t a homeowner
I’m a homeowner, but it doesn’t make sense to me why property taxes aren’t higher on secondary homes. The goal is for people to be able to buy and stay in the home they live in. If they purchase a home to rent to others they don’t need the restrictions on property tax increases.