Split Roll Tax Proposals: A Little Sweetener with the Poison
Curious items appear in the two initiatives filed by the California Teachers Association to split the property tax roll taxing commercial property more than residential property. Both measures contain a pair of tax cuts as part of the packages that, overall, would result in massive tax increases.
One item would double the homeowner’s exemption and increase the renter’s credit. The second would create an exemption for business personal property tax.
When the $7,000 homeowner exemption was created, the exemption was equivalent to about one-quarter of the average California home’s value. However, after years of housing inflation the $7,000 exemption has little impact. It saves $70 off the homeowners’ property tax bill. Increasing the homeowner exemption to offset inflation driven value is a good idea.
However, the CTA measures merely increases the savings to $140. Such a small amount does little to offset inflation built into home costs.
More Budget Woes Looming for State
If you like good news, it doesn’t look like California is going to have to call a special session on the budget before Jan. 10.
Come Jan. 11, though …
While the state’s current budget was balanced earlier this year with little more than boundless optimism and finger-crossed dreams of a better financial future, fiscal reality is about to strike, big time.
Gov. Arnold Schwarzenegger and his money team have been putting out the word that this year’s budget already looks to be $5 billion to $7 billion short of estimates. And that doesn’t include the $7.4 billion shortfall already predicted for the 2010-11 budget for the fiscal year beginning July 1.
And how accurate are these new estimates?
Getting Californians On Board the 2010 Water Bond
Incredibly, the legislature was able to come together to pass a water package. Democrats and Republicans together. Farmers and environmentalists alike. North and South in agreement. Historic and implausible, yes. What it’s not… is done.
To accurately describe the package in its current state, we might include the following: nada, zero, zip. That is, unless we can get the voters to agree. Unfortunately,
California voters are frustrated and fed-up. Yet, these are the people who will be asked to trust the government with an $11.4 billion.
Is it good timing? No. Could there be worse timing? Probably not. But anyone plugged into California politics, policy, and history will tell you that it just might be the only time. When California has recovered from this recession (and we will) and has reformed the way we function, govern and balance our budget (and we will), California will still need water. Our children will need water. And their children will need water. This issue will not go away. It cannot be put off.
The Audacity of Deceit
At the end of the 2008 fiscal year, the Treasury Department’s “Financial Report of the United States Government” issued a report that showed the present value of America’s unfunded liabilities had reached a staggering $56 trillion, or nearly four times our nation’s GDP.
In about a month, the 2009 Financial Report will be released and those in the know expect it to show our unfunded liabilities growing to over $60 trillion, effectively tripling in a decade.
Every day we delay rehabilitating our nation’s spending addiction, America sinks $11 billion deeper into an ocean of red ink.
What is the response from Congress to this out-of-control spending habit? Pass a massive new health care entitlement of course…what else?