California…why?

The ballot in California this year was rife with propositions and the televisions were a constant blitz of advertising for one side or the other. Many of those ads misleading…”A vote against this and you hate veterans!” or “Vote yes if you want to kill all the baby whales!” Maybe I exaggerate…but not by much.

Now, I won’t even begin to think that I have any right to tell anyone what they should believe, but I will show you what I have found…you can decide if we missed the mark on these propositions.

Let’s start with Proposition 51 – Our state passed a $9 billion dollar bond to rebuild public school physical infrastructure. Let me state unequivocally that I want safe school buildings for all of our children. My issue isn’t with the theoretical reason for the bond. Instead, my concern is the actual cost.

One problem is that many people seem to read the description of a proposition, see bond money and think, “Cool…that doesn’t come out of our pockets…people will buy these and we don’t have to raise taxes to get schools fixed.”

My question to those people is, “Why do you think people buy these bonds?” It certainly isn’t from the goodness of their hearts…this isn’t a bake sale or Boy Scouts (with their $20 bags of popcorn…I am in the wrong business)…these people are expecting a return on this investment.

What kind of return? Oh…probably in the neighborhood of 5%…amortized over 30 years with a 5 year buying-in period…math math math…and we can estimate that the state will pay out $17.6 billion over the next 30 years for this bond. Which means we have to find an extra $600 million a year just to pay back this bond. Someone somewhere is going to have to pay more taxes…or we have to cut somewhere else. No one wants to ever cut any program anywhere in this state…so it looks like we need more taxes!

Bonds are just like credit cards for the state…and, since they max them out at an alarming rate, it may be time to take away the power of our government to use credit until they pay down the debt they have already acquired.

I shouldn’t have looked at our state’s existing debts because I was so much happier not knowing this…but since I am now aware, you should be as well. It turns out that a decent chunk of this debt stems from education facilities bonds that we have passed in the not too distant past…how much, you ask?

Well…since 1988, we have put out approximately $55 billion in bonds that we still owe a total of $37 billion to pay off…add 9 and 17.6 and we have taken out $64 billion in facilities bonds to keep our schools up to date and we will now be on the hook for $54.6 billion more dollars to pay them all off.

There are approximately 12,000 public schools in California spread over 1000 districts. Before the passing of Prop. 51, we had already sold enough bonds over the last 3 decades to give $4.8 million per school for facilities. Almost $160,000 per year, per school…and our schools still look like left over cold-war military sites?

Where is it all going? Why do we keep saying yes to spending like this when we have so little to show for our efforts thus far? We are kind of like those guys searching for treasure on Oak Island…

Which brings me to 53 – the proposition to force all bonds greater than $2 billion to be approved by statewide vote.  Perfect! Let’s help our government take control of their credit habit! This proposition was actually campaigned against by our Governor…hmmm…I wonder why he wouldn’t want us controlling his checkbook…

I was so excited that maybe we could make some change, regain some control over the excessive spending…but then I saw that we just voted to approve the 9 billion dollar bond above to follow up the 9 billion dollar bond for the high speed train…the one with unattainable milestones (self-sustained with no subsidies, SJ to LA in 2 hours 10 minutes, etc)…plus all the previous education facilities bonds that we didn’t remember…

So even given the chance to shoot things down, we don’t step in. Until we get past the idea that bonds are just free money to do neat-o things with, this sort of proposition wouldn’t matter anyhow.

The state is already $340 billion in debt…what’s another 9…or $17.6 to be more accurate?

Finally, Proposition 55 – I believe that we need to challenge the legality of allowing voters to choose whether or not to extend a tax increase on <2% of the population. The proposition extends a previously voted tax on those bringing in more than $263K per year…the tax is an extra 1-3% on that money depending upon how much more than $263K you earn. How can 1.5% of the state defend itself in this vote? They can’t, and so the rest of the voters can line up every two years to take more and more.

The supporters of this proposition scared people by putting sad children on the television and telling us that if we didn’t vote this proposition in, little Jimmy wouldn’t get no book learnin’…and we want Jimmy to have book learnin’, don’t we?

Problem is, the wording is so bad in this proposition that the analysis says, “It is reasonable to assume that approximately half of this money will go to education.” The rest goes to Medi-Cal and where else?….Why, to pay down our debt (that we just increased by $17.6 billion) and pump up our reserves.

Hmmm…what if instead of borrowing another $9 billion, the state had used this tax money for the projects covered by Prop. 51 and had them paid off in the first 2 years?

Why not? Makes sense, right? Nope! Because too many hands are out for this money already. We need to keep funding our ever growing bureaucracy. We already fund too many projects that go far beyond the proposed budget.

For example, cost to build this light rail system…the voters were told $33 billion dollars. After voter approval, the revised estimate jumped to $68 billion and now it may be closer to $98 billion dollars. The reasons are many…but the one that makes me laugh the hardest is the, “There are so many mountains we have to tunnel through…”. So…when you planned this, California was flat, but since the original plans were created, we magically grew mountains in your path?

The state raids from one budget to pay another. Read about the 9/11 scholarships that were supposed to come from license plate sales and see how that went.

You want to become nauseous? You think working for the government doesn’t pay well?Check this link:

http://transparentcalifornia.com/salaries/2015/state-of-california/?&s=-total

This state is already driving business away…the individuals who bear the burden of the excruciating tax levels are going to be close behind. This state is going to put itself in bankruptcy if it doesn’t start controlling its spending and dependence on raising taxes for the high earners and disabling small business.

Small business owners are pummeled by this state. The federal government has declared that they won’t tax a sole proprietor’s business income because that money goes straight to the owner, who then claims it as personal income. Not California. We tax it both times.

Our own federal government, who would use a $.47 stamp to inform you that you were off by $.25 on your taxes, doesn’t think that this type of double taxation is fair…the same federal government that thinks taxing a person on their income and then taxing it all over again later at 55% when that person dies and leaves it to their children is fair…they don’t think it is right to double tax small business owners…but California does.

We can’t keep spending what we don’t have, and we can’t keep passing bonds that we can’t afford. This state is spending 17% less this year on labor and job creation and $4 billion more on government. Yes…$4 billion MORE…yet, we need this extra tax on the “wealthy” to keep from experiencing a budget shortfall.

How about we cut some of this government out? 65% of the total infrastructure budget or $1.3 billion is being spent to update government offices in Sacramento…but only $31 million for the protection of our water supplies? I think you can work in an outdated office, but that water keeps our economy thriving and our people alive.

We are spending $431 million next year to “better serve long term offenders”. That’s right…in order to make life just a bit more comfortable for our career and long term prison inmates, we are spending 14 times more on them than we are protecting our water supplies. Am I the only one who thinks this is insane? You want better living conditions, don’t commit crimes. It is that easy…or am I missing something?

So when you see that group out there protesting that inmates need better treatment, better opportunities…remember that the money they want is coming from the same pool (no pun intended) that keeps our farms producing and our people drinking and bathing.

Remember that the average inmate already has access to that *free* college that people are clamoring for, they get free arts lessons, they get cable tv (and now a plan to make sure they have access to internet programming…because it isn’t fair that they can’t watch “House of Cards”), they get a library of books, they have access to a gym…all things that you and I have to work for…but hey, they have it bad because they are in prison…so we should help them. Ask the working family that doesn’t have any of those things how they feel about helping long term prisoners. Ask the farmer that is fighting to keep his crops alive how he feels about that.

Our state government behaves like a college kid with their first credit card. We the citizens need to be responsible parents and cut them off. We have the highest tax rates in the nation…by a large margin…and that debt we carry is the most of any state in the nation. We are the largest in terms of GDP at over $2.4 trillion (yes, we are the 6th largest economy in the world)…and yet we have to raise taxes on a select few so that Mr. Career Criminal can see the latest “Orange is the New Black”.

 

How about this for the future budgets: Prisoners are last on the list, working families in need are first…Government offices are on the bottom, water resources on the top. Is that crazy? Let’s prioritize and spend this money where it does the most good for the people. Most importantly, let’s stop borrowing and make better use of what we have…it shouldn’t be that difficult. Less bureaucracy, less administration (you want to have a coronary, check the budget line items for administration), fix the budget crippling pension plans, and stop funding projects we can’t afford.