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WSJ Editorial Writer Allysia Finley on the impact of tax hikes to resolve California’s budget crisis.
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In California did the impossible.
Its budget is balanced we have fixed it California's back.
You heard from governor Jerry Brown -- California is saved the state now projecting today nearly 49 million dollar surplus.
A huge -- -- bringing in cash but.
Wall Street -- -- Finley says those tax hikes could backfire.
In California is still in a big -- house so we should.
Well you look added they have a huge massive load of debt be about.
Thirty billion dollars that they borrow from special fund schools local governments that -- softer and today.
Many of seventy billion dollar -- Barton capital market rates to build schools.
Infrastructure and then it but they always they've been floating bonds in California forever okay -- then you have to look at their pension liability -- which -- some estimates go up to all the way up to 40500.
Billion dollar yes.
And meaning to fully fund those -- shouldn't socking away about ten billion dollars a year.
I saw of California first public employee retirement system was 300 billion underfunded and state teachers' retirement was a hundred billion underfunded.
There's your 400 billion dollars.
Any of the local up pensions and that's plane included in there and those cities across you know misty airport and broke from their pensions.
Sold.
That he says everything's fine.
Lol why then are they trying to -- they want to raise taxes they're trying to gut prop thirteen which limits prop -- tax hikes.
And making it easier for look how these -- taxes.
You -- living California along time Ed and I I'm very familiar with prop thirteen and and everybody's been blaming prop thirteen ever since it was pathway back before.
You're probably born it was 1978.
And yet it's not it's not the tax limitation which is greatest kept seniors -- be taxed out of their homes.
But that they're spending has been far more than their revenues it's a spending problem that we keep repeating in Washington they have -- out Sacramento.
-- an aggravating the problem is that whenever days and it's -- name progressive tax system.
If you earn more than 50000 dollars.
You pay nine point 3% in your income taxes more than one million they they just doubled down on the system more than million dollars it paid thirteen point 3% heist in the country.
As a when you get all these revenues falling and they want to spend -- all.
But they know that people.
Can't can't or won't pick up and leave build a we are funny preachers.
And I think they know that about -- is that people even in dire situations.
Most people don't go anywhere.
Well that's true however and me and that's only to an extent California has great weather but when you can't afford it it -- -- there are no jobs.
You know 100000 people are -- each year because they can't find jobs there.
Yeah and in next stories Nevada which has -- zero income tax which which helps.
But that doesn't have an ocean a lot of people like that -- -- you don't have the -- palm -- the legislative -- office in California.
Nonpartisan.
I think pretty straight shooters.
They're saying they're just about two billion upside down for this fiscal year -- in right now everybody is going.
That's not that's piece a cake you grin.
Well compared to back in 20098.
Basis sixty billion dollar shortfall nobody is still love -- -- cool billion in the where they gonna get a front well it's interesting I think they found five billion their bad -- this this month was five billion dollars over projections.
And they have no reason.
They have no idea why that is.
Two billion dollars over the year well -- the tax hike could actually help with.
I just I think I think businesses that can't move manufacturing.
Warehousing and things like that.
Probably.
Mostly half.
-- I I.
Disagree -- still seeing a big -- this from their cap and trade program Ellington last fall.
Useful seeing manufacturing.
Errors moving out and -- still going oh Campbell's soup quote Campbell Soup and Comcast closed -- -- being cut 2000 jobs right in northern California -- right all.
Waste Management picked up and left rather there's a number of -- having the having a lot of jobs leaving.
So what do they believe are we gonna have urban decay problem but it's not going to be a city is going to be estate.
Well a lot of what little wealth there you can even keep the Silicon Valley that's the -- well beyond Claude.
And Orange County -- -- -- doing really well on the coast but we're really seeing things hard it.
Alicia -- Wall Street Journal.
Always good to get your -- thank you very much.
