Exhibit 9,453,316 on Why California Municipalities are Broke

by rrusczyk, Jul 22, 2009, 10:44 PM

California is bleeding money. Voters recently resoundingly voted against all sorts of measures that would explicitly or implicitly increase taxes. So, the San Diego School Board votes to pay some political consultant $130,000 to investigate whether or not it is feasible to get 2/3 of voters to pay a new tax that would be targeted to education. Good luck with that (particularly in a state that already has whopping taxes, spends a staggering amount of that on education, and doesn't have much to show for it). No doubt, the consultant will come back with the answer he's paid to provide...

(Thanks to DPatrick for sending the link. And just in case the San Diego School Board is reading this, DPatrick offers to do the study for 13K. I don't think you'll like the answer he'll give, though.)

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California needs new taxes. No, $\$[/dollar]130,000$ to a consultant is not a good use of money, not in any universe, but the legacy of Proposition 13 continues to undermine the state government. Tax cuts are a popular platform, but they tend to undermine good government in times like this.

by worthawholebean, Jul 22, 2009, 11:50 PM

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California spends a lot on education? In raw terms, yes. Adjust for population and they fall to the middle of the pack. Since it's generally expensive to live in California, salaries go up- and that's where most of the spending goes. Something has to give, and it's overcrowded schools and huge classes. California is dead last in teacher-student ratio at the high school level, with twice as many students per teacher as the national average.
Source for the data.

Of course, the main reasons that the local governments are broke are that (a) the state is taking their money to prop itself up and (b) it's practically impossible to raise taxes for anything because of supermajority requirements.

by jmerry, Jul 23, 2009, 1:02 AM

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California has many problems, but it doesn't seem like a lack of taxation is really one of them.

http://www.reason.com/news/show/133772.html

This sounds more like the old "closing the Washington Monument" technique of budget preservation. The story may be apocryphal but the it is often deployed.

When the parks department is threatened with a budget cut (or more likely a cut in the rate of expected increase) it would be unproductive to actually cut costs in some rarely visited bit of desert. Instead they announce that these draconian cost will force them to limit the hours of operation of the Washington Monument.

The expectation of course is that a public outcry will restore the original budget.

I suspect that the State of California (and its enablers) rather than cutting expense like the one Richard notes or these http://reason.tv/video/show/783.html are smart enough to threaten school children, widows and orphans.

by djcordeiro, Jul 23, 2009, 12:39 PM

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Yeah, I'd like to see more justification of that "need more taxes" claim. There is another possible solution -- spend less. Such as on the absurd pensions public service workers get, for starters.

We are among the most highly taxed states in the country. Other states seem to be doing a lot better with lower taxes. How does that square with "California needs more taxes."

What do you think is going to happen to the job situation in California when those taxes are imposed? Companies will move, jobs will go with them, and California's deficit situation will get worse. And what will the solution be then? Oh yeah, more taxes.

If California were a low-tax state, the "need more taxes" argument would hold water. But it's not a low-tax state, or even a medium-tax state. So, raising taxes is self-defeating here.

by rrusczyk, Jul 23, 2009, 2:45 PM

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jmerry - fair point on the education spending, but I think I'm on pretty safe ground complaining about what we're getting for that spending, outside of the university system. Maybe the problem is that our educational priorities are skewed too much toward the universities? I don't think the problem is simply "not enough money," but the teachers' unions will certainly disagree with me on that point.

by rrusczyk, Jul 23, 2009, 2:53 PM