Elon Musk has announced the rollout of the Tesla Model 3, which he claims is the car for the masses. But what he really means is that it is a car paid for by the masses. Tesla prominently features the various incentives and credits available to prospective buyers. Purchasers of the $35,000 Model 3 get a $7,500 tax credit—21 percent. In addition, some states provide tax credits or rebates that can range from $1,000 to $5,000, with Colorado at the high end. Plus, owners of electric vehicles (EVs) often get to use HOV lanes without charge, free parking, and rebates on home chargers.
Six years later, the state is no longer projecting massive deficits and the governor’s metaphorical wall is now more like a short fence. Tax increases approved by voters in 2012 and in 2016 have played a major role in making that happen. There’s broad agreement that a smaller “wall of debt” is good news. The problem, though, is that Brown’s original definition left out billions of dollars in obligations that someone will have to pay. And it’s unclear who that will be or when it will happen. . . . When he took office, Brown’s budget team identified 10 short-term government debts as a threat to California’s chances of recovery — debts that totaled $34.7 billion. . . By the close of the fiscal year that ended on Friday night, the state had paid off some $32 billion of the “wall of debt” identified by Brown in 2011. . . . Looming larger than anything now are the retirement promises made to state employees — totaling at least $242 billion, according to the governor’s finance team. Some insist that projection is too low, that taxpayers will have to hand over much more to fully pay off obligations to the California Public Employees’ Retirement System (CalPERS) and the California State Teachers Retirement System (CalSTRS). Add those pension debts to other chronic obligations — transportation loans and borrowing from special budget funds during lean years — and the state Department of Finance puts the total size of existing budget debt at more than $283.3 billion.
A review of federal data by The New York Times found that in the United States’ biggest metropolitan areas, low-income housing projects that use federal tax credits — the nation’s biggest source of funding for affordable housing — are disproportionately built in majority nonwhite communities. What this means, fair-housing advocates say, is that the government is essentially helping to maintain entrenched racial divides, even though federal law requires government agencies to promote integration.
Last month, a Civil Grand Jury report concluded that most of the debt of the San Francisco Employees Retirement System, which has been underfunded for more than a decade, was approved by the voters who in theory are a safeguard. . . . The grand jury suggests voters may have been misled by official ballot pamphlet cost information on two of the three “significant” pension increases described in the report. A dozen retroactive retirement benefit increases between 1996 and 2008 are listed in a report appendix. Voters were told that even with a retroactive pension increase for most employees (Proposition C in 2000) the city is not expected to make an annual payment to the retirement system “for at least the next 15 years.”
Despite a bright economic climate, voter-approved state tax hikes and $74.5 billion that California will devote to K-12 education and community colleges in 2017-’18 — a $3.1 billion year-over-year increase — schools are in financial distress. . . . With a currently healthy state budget, the biggest threat to balanced school budgets is the growing bite taken by public retirement systems — CalSTRS for teachers and CalPERS for support staff. Next school year, those taxes will be about 15 percent of employer payroll. In four years, the CalPERS payroll tax will exceed one-quarter of salaries and is scheduled to continue growing in an effort to enable it to better cover its projected retirement payouts. CalSTRS also will also grow.