New ‘Think Tank’ Report on California’s Business Exodus: Useless
What a gap we have in the thinking of California’s academic types and business leaders about whether companies are fleeing the state because of high taxes, over-regulation and general hostility to commercial enterprises.
The Public Policy Institute of California (PPIC) has updated a report about companies leaving California that concludes the exodus is exaggerated. The San Francisco-based think tank says that between 1992 and 2006, jobs leaving the state never accounted for more than 2.3 percent of job losses in any given year. So, folks, don’t worry.
However, for two years in a row Chief Executive magazine found California to be the worst state in the nation in which to do business. Said one CEO, "California is terrible. Even when we’ve paid their high taxes in full, they still treat every conversation as adversarial. It’s the most difficult state in the nation." The magazine called California the "Venezuela of North America."
How to Pass a Budget and Tax Increases by a Majority Vote of the Legislature
The Legislature may
vote on a legitimate (if not balanced) budget proposal in the next
couple weeks. Or it may not. But in any event the lack of a budget for
nearly the entire first fiscal quarter should not prevent us from
war-gaming the budget for the next fiscal year.
Jerry Brown has said on many occasions that he would only raise taxes with a vote of the people. At a recent editorial board he floated the idea of a special election next spring (Joel Fox predicted
May 17, 2011, to coincide with the LA mayoral election) to "tee up
some key decisions," presumably meaning voter approval of tax increases
tied to a budget. If Prop 25 passes in November, the Legislature could approve a budget by a simple majority vote. But
wouldn’t he still need a two-thirds vote to place a tax increase on the
ballot?
Maybe not.
Waiting for the Debate
Voters are waiting … waiting for something to break open this governor’s race. The Field Poll shows the governor’s race is dead even. Since the two gubernatorial candidates have been within the margin of error throughout the summer, today’s Field Poll doesn’t show much change.
The Brown campaign might say that since they are up on the air now they are turning things around, but in reality, the race has been flat and I suspect it will stay that way until the next turning point being the first debate on Tuesday at UC Davis.
The even poll puts more pressure on the candidates to perform well during the debate and the closeness of the race may bring more attention and interest from the voters than the voters seemed to have shown in this race so far.
Officials Hid Size Of Pension Crisis
Due to "Alice in Wonderland" accounting methods, the amount that
taxpayers owe to provide pensions for local and state government
employees is much larger – perhaps an extra $2.5 trillion – than
government officials have let on, according to an economic advisor to
Gov. Arnold Schwarzenegger speaking at a Securities and Exchange
Commission (SEC) hearing in San Francisco on Tuesday.
"State and local governments utilize a misleading method for
reporting the size of public pension obligations," said David Crane.
For example, an annual obligation of $30,000 for 25 years for a
government employee’s pension is projected to cost the government
$320,000, while the same $30,000/year, 25-year obligation in the form
of a bond is projected to be $425,000. "Two identical and unconditional
obligations owed by the same government are valued at different
amounts. The answer lies in the Alice in Wonderland world of government
pension accounting that allows governments to hide liabilities."
Government officials justify the lower obligation for the pension
based on the earnings they hope to receive by investing the money.