Topic: Public Finance
News
July 18, 2017

Its critics say that Proposition 13, which restricts taxes to 1 percent of property values and caps increases in those values at 2 percent a year, has starved schools and local governments of vital revenue. However, the latest data on homes, farms and commercial and industrial property, compiled by county property assessors, tell a much different story. Assessors completed their 2017-18 rolls of taxable property this month and are reporting about a 5 percent statewide gain to approximately $5.75 trillion – yes, that’s trillion with a “t” – in taxable value. That huge figure will translate into at least $65 billion in property taxes, including levies to repay bonds, which are exempt from the 1 percent limit. . . .The most eye-popping number, however, is the immense growth in property tax revenue – well over 50 percent during the last decade alone and about 1,000 percent since 1978, when Proposition 13 was overwhelmingly passed by voters. The Legislature’s budget analyst, Mac Taylor, points out that “the property tax has grown faster than the economy” since then.

News
July 15, 2017

The idea of a universal basic income — monthly cash payments from the government to every individual, working or not, with no strings attached — is gaining traction, thanks in part to endorsements from Silicon Valley celebs. Some see it as a way to compensate for the traditional jobs with benefits that will be wiped out by robotics, artificial intelligence, self-driving vehicles, globalization and the gig economy. Others see it as a way to reduce income inequality or to create a more efficient, less stigmatizing safety net than our current mishmash of welfare benefits.

News
July 14, 2017

The California Public Employees’ Retirement System rode a strong year in the stock market and private equity investments to earn a return rate of 11.2 percent for the fiscal year that ended June 30, the pension fund announced Friday morning. That’s about double what CalPERS had expected to earn this year. It’s also a marked improvement over the previous year, when CalPERS’ investment return rate was .61 percent. In the budget year that ended in June 2015, CalPERS’ investment return rate was 2.4 percent.

News
July 14, 2017

Oblivious to the fact that these corporate and personal earnings [or just “earners”?] can move to other states or even other countries, Sacramento recently increased the gas tax and car tax by over $5 billion annually. The politicians do not spend this money well. Our freeways, once the envy of a great nation, are an embarrassment. Our dams, once an engineering marvel, threaten hundreds of thousands without warning because maintenance is deferred to cover up pension debt. The CalTrans budget was $13 billion in 2010, the year Governor Brown took office; by 2013, it was reduced to $11 billion. So here is the formula Sacramento politicians have dreamed up for sending our shining stars to other states: tax more, then spend less on the things that matter. Sacramento knows about this problem, but as usual, its solutions are ham-fisted. Here’s an example. Politicians paid Paramount Studios $22 million in tax bribes to film one of the myriad installments of “Transformers” in California instead of taking its business to another state. This is only one of the films in the Transformers “cycle” to be filmed in California; others have been shot in China, Britain and in other states. To keep some of the action in California, Sacramento has created a huge taxpayer-supported fund to help finance films with budgets of $75 million or more “to entice more major motion pictures to choose California and reverse the tide of runaway productions”. According to the LA Times, “California officials hope that more in-state film shoots will help spur local economics through spending and hiring.” Making crony deals with billion-dollar corporations will not stem the flow of our young entrepreneurs from California; it just makes them shake their heads at the pathetic condition of the state they used to love.

News
July 13, 2017

he trust fund that pays Medicare's hospital expenses will run out of money in 2029, a year later than was projected last year, according to a federal report. The Social Security program will remain solvent until 2034, a projection unchanged from last year. The report from the Social Security and Medicare board of trustees is an annual glimpse at the long-term solvency of the federal government's two biggest entitlement programs. It comes as Republican lawmakers have introduced a new version of a health care bill that would make deep, long-term cuts to a different entitlement program, Medicaid.

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