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California's budget whiplash: From a record-setting surplus to a massive shortfall in 1 year

Original post made on Jun 13, 2023

After last year's excitement over how to spend a record $97.5 billion budget surplus, the state is now grappling with a $31.5 billion budget gap.

Read the full story here Web Link posted Tuesday, June 13, 2023, 8:37 PM

Comments (5)

Posted by Mondoman
a resident of Green Acres
on Jun 13, 2023 at 11:29 pm

Mondoman is a registered user.

re: "One solution to relieving the funding pressure put on the state's general fund to pay for K-14 education is by assessing taxes on most commercial and industrial properties based on market value, essentially removing the tax relief Prop. 13 offers them. This is called "split roll" and a recent attempt to have voters pass this lost by 3 percentage points in 2020."

This makes a lot of sense. Commercial/Industrial properties are revalued much less frequently than residential properties, as the corporate owners don't "die". IIRC, when Prop 13 passed, about 60% of property taxes came from commercial/industrial propertied and 40% from residential. That ratio has now been flipped because of the corporate shield to property revaluation, with 60% of property taxes now coming from residential property. That's just not equitable.

Posted by Online Name
a resident of Embarcadero Oaks/Leland
on Jun 14, 2023 at 1:30 am

Online Name is a registered user.

@Mondoman, you're making too much sense to ask commercial interests to pay their fair share. It would also change the YIMBY narrative that only NIMBY's benefit and they're unlikely to bite the hands that feed them.

News Flash: California has regular boom and bust cycles. Who knew.

Evidently not our local "leaders" who bet the farm on continued job growth, the eternal strength of the technology companies and their constant need for more office buildings and more business hotels.

Extra credit to our state "leaders" for barring ANY reconsideration of LOCAL housing targets in the face of the new reality of the budget deficits -- massive unemployment, remote workers, population outflows, climate emergencies, business closures, etc etc etc for 8 -- EIGHT-- years.

Anything changed for you in the last 8 years? Your business? Your job? Your rent o or rental income? Your utility bill? Your taxes? Your commute? Your portfolio value? Income? Debt level? Health? Family situation? Portfolio value? Your weight? Flood damage? Insurance coverage?

If anything's changed, start wondering what why we're being forced to abide by JOBS-based Boom housing numbers during a Bust cycle for 8 long years before we next reconsider them.

The Reality Future Index ain't looking good.

Posted by Bystander
a resident of Another Palo Alto neighborhood
on Jun 14, 2023 at 7:54 am

Bystander is a registered user.

Businesses and residents are leaving California due in part to high taxation (and things like crime, homelessness situation, politics, etc.) and these were high tax paying so it is beginning to hit home to California.

As for those of us still living here, we are paying more for the same services and not getting more from our tax dollars. Crime is up and we all know it although we are told data shows that is not true, but statistics can be made to look any way the government want as any good statistician knows. They built extra lanes on 101 which are costly for most people so those lanes are underused while the regular lanes are crawling along. Stores and restaurants are closing because they either can't get staff or because of online shopping.

Nextdoor has a discussion about activities for teens in Palo Alto. The short answer is that most of the fun activities for teens during the summer in or around Palo Alto have gone. Many young people who have grown up here want to leave so that they can live somewhere more affordable, and those who have moved here for school or work expect to leave the state when they start their families. PAUSD enrollment is in decline which is opposite to a decade ago when the schools were bursting at the seams and a third high school was talked about. This is incredible when there are more homes being built, but the homes are not family friendly homes with back yards and space for children to play inside.

California is rapidly becoming a place that nobody really wants to live. Sure we have great weather, but everything else is getting harder. Even home insurance is now difficult. Unless someone enjoys outdoor activities or Michelin star restaurants, there is little to do at evenings and weekends, and that's for seniors, families, and all in between.

California needs to spend some time working out cost of living and quality of life issues. Stop the virtue signalling and enter the real world.

Posted by jr1
a resident of Greenmeadow
on Jun 14, 2023 at 10:59 am

jr1 is a registered user.

I would like to see a newspaper list every expenditure during the time from the surplus (97.5B) to the deficit (31.5B). I'm only interested in seeing the expenditures.

Posted by Annette
a resident of College Terrace
on Jun 15, 2023 at 5:38 am

Annette is a registered user.

EXCELLENT post by Online Name.

I especially like that Online Name called out the insurance industry. Insurers are a BIG part of some of our thorniest problems and now they are refusing to write policies for homes in certain areas. That is akin to declaring that policies are written ONLY when the chances are good that the money mostly flows INTO the company coffers and not OUT to policy holders. NOT COVERED BY INSURANCE is a growing problem in health care and now housing, two enormous segments of our economy.

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