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California gets its first upgrade from S&P since 2006, the agency hiking the rating on...

  • Thursday, January 31, 3:39 PM ET
    California gets its first upgrade from S&P since 2006, the agency hiking the rating on the state's general-obligation bonds to A from A-. "The economic expansion is gaining positive momentum," and the approval of higher sales and income tax rates "positions the state to capitalize on burgeoning economic activity." S&P should ask Phil Mickelson about that one.
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This news story has 49 comments:

  •  
    "S&P should ask Phil Mickelson about that one."

    Beat me to the punch on that one.

    If Mickelson moves to Florida will that result in a downgrade?

    The way Lefty played at Torrey Pines, it could push CA up to AA.
    31 Jan, 03:56 PM Reply Like
  •  
    So Phil moves to Florida, who cares? He doesn't create a lot of jobs in Ca. or Florida. Maybe he should just move to Russia like the French actor. I can think of a bunch of people who should move to Russia, and not come back.
    31 Jan, 04:48 PM Reply Like
  •  
    Four!
    31 Jan, 10:23 PM Reply Like
  •  
    If Callaway sells 1,000's of the driver he uses or the putter he uses doesn't that mean that they have to be employ people to get the product out there? I'm sure Rolex, KPMG and Barclays have gotten a bump in business because of him.
    31 Jan, 05:18 PM Reply Like
  •  
    Golf doesn't depend on one golfer anymore than basketball depends on one player.
    31 Jan, 09:32 PM Reply Like
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    The better answer is still Phil's living location does not create jobs. He can live in Mexico and Callaway will still sell his drivers. How many drivers say "used by Phil Mickelson only when he is living in CA."
    31 Jan, 11:28 PM Reply Like
  •  
    So, seems this was on the basis of December's first receipts vs. disbursements break-even. It'll be interesting to see 1Q - 2013. Aren't there alot of "defense" contractors in CA?
    31 Jan, 06:32 PM Reply Like
  •  
    There used to be, still a bunch in San Diego.
    31 Jan, 09:32 PM Reply Like
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    California doesn't deserve upgrade or even a mention. One of these days, after a good shake LA or SF will be half in rumble and few hundred billion dollars won't be able to rebuild that piece of crap. Who will want that real estate then?
    31 Jan, 06:35 PM Reply Like
  •  
    that's not very nice.
    31 Jan, 08:36 PM Reply Like
  •  
    Life can be not very nice. Life will get even worse for the state like California where 3.8% of population draws welfare check. In that regard, California is really #1.
    31 Jan, 08:54 PM Reply Like
  •  
    Most Californopeans dont have earth quake insurance. If the big one comes, or more like when the big one comes, most people will be royally F'd.
    31 Jan, 11:18 PM Reply Like
  •  
    My place is up 25% since I bought it last year.

    Appreciate your sentiments and well wishes, peace on earth and all that though lol :-) <3
    1 Feb, 12:45 AM Reply Like
  •  
    california should try to declare independance
    i predict that will happen within 50 years
    we do not want to pay for the defense budget that is used to kill people
    also why should we pay more into the fed and get less back?
    all those money go to all the red states
    California and NY are giving aids to many red states like the US giving adis to the third world
    31 Jan, 06:49 PM Reply Like
  •  
    if not for Nancy Pelosi who has completely tied her State's fate to a "bailout regime" for Wall Street this probably could be realistic. Unfortunately you're tied to all those Federales Dolares...and that stuff comes from Wall Street courtesy of the Fed. She's doing a great acting job though...i look forward to her next appearance as a Hollywood star. http://bit.ly/YmHJuJ
    31 Jan, 08:40 PM Reply Like
  •  
    bingo. the biggest consistent drain on the California GDP is having to foot the bill for red states.
    31 Jan, 08:40 PM Reply Like
  •  
    Whatever, California is neither a huge drain or contributor in terms of federal coffers. I think MN, IL, NJ, and NY would clobber CA in terms of contribution percentages.

    Puerto Rico on the other hand can be done away with.
    31 Jan, 09:06 PM Reply Like
  •  
    California is a major contributor, but you're right that MN and NY give more. At any rate, the point holds: the socially progressive states foot the bill for the red states who actually the ones who subsist on welfare:

    http://econ.st/vnJYeR
    31 Jan, 09:25 PM Reply Like
  •  
    Those statewide maps of which state gives more etc are flawed and only useful in partisan arguing matches. If you notice, many of the states which show negative are small states but with huge a Federal Government presence, especially things like military bases, like New Mexico. The presence of that base is neither an indication of the culture of the people or their economics, but the whims of politicians long ago who decided where those bases would be.

    Second showing a state like Delaware "giving more" is ludicrous. Delaware is the closest thing to an offshore tax haven within the continental US. That is why so many companies have their corporate HQ their on paper. Again this doesnt so much mean that Deleware folk are more "giving" but that their tax shelter strategy has been successful and as a result more corporate earnings, and hence more taxes paid on those earnings, are attributed to their state.
    31 Jan, 11:28 PM Reply Like
  •  
    with the exception of Illinois things are looking up for the taxer and spenders...who of course were the primary, secondary and totality of the bailouts in 2008. And of course in for those who were rightfully disgusted by that horrible rendition of "i will survive" above: http://bit.ly/11bGx2E
    ah, Gloria Gaynor. "listen and weep" amatuers.
    31 Jan, 08:46 PM Reply Like
  •  
    You cynics can skulk all you want, but California is clearly benefiting from large oversea cash inflows.

    Chinese who wish to swap their bathrooms in Beijing for nice Californian single family homes are sweeping the state clean of excess inventories. As a result, property prices are shooting up strongly and filling up the state with property tax money.

    In addition, Silicon Valley tech giants are girding up for platform wars and are ramping up their capex. Even the defunct Nokia has built up a strong presence in Sunnyvale while shutting its facilities in Europe. Amazon.com is opening up a gigantic fullfillment center near Tracy.

    Finally, California should stop sending its tax dollars to those piss poor red states.
    31 Jan, 08:52 PM Reply Like
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    @dividend growth: that is so true. Houses all over the bay area are selling for 150% and more of asking to Chinese investors, sight unseen.

    And amen about the tax dollars to red states. Or, at least, we should attach some kind of educational requirement to that funding.
    31 Jan, 09:29 PM Reply Like
  •  
    "Chinese who wish to swap their bathrooms in Beijing for nice Californian"

    True, why are there a significant amount of Bay Areans that discriminate.
    31 Jan, 11:08 PM Reply Like
  •  
    I wouldn't call most single family homes in California nice, more like delapidated. Yes, there are nice homes as well - but at 3-5X times the prices of similar houses in other parts of US not named New York or Chicago.
    31 Jan, 09:20 PM Reply Like
  •  
    Have you even been here?
    1 Feb, 12:47 AM Reply Like
  •  
    Try San Bernardino.
    31 Jan, 09:35 PM Reply Like
  •  
    Try foothills of North Carolina.
    31 Jan, 11:21 PM Reply Like
  •  
    By 2014, revenues will be flat or declining...In the next census Mexaforina will have lost 5 to 10% of her population...
    31 Jan, 10:27 PM Reply Like
  •  
    Good, maybe they will re-district Pelosi out of business.
    31 Jan, 11:52 PM Reply Like
  •  
    WMARKW, she will be in the wax museum....
    1 Feb, 10:03 AM Reply Like
  •  
    Amazing, taxing very high earners in a low interest rate environment so as to avoid cuts in education, police and infrastructure lays the foundation for growth! I was stuck in the 1980's so I didn't realize. But there is still a lot to hate about California. Just to name a few things: silicon valley and all those great jobs, all that water sucking farmland in the valley, a hugh diversified economy in the south. And that clean air and California sun.

    I for one want to live in a state that has very pro business policies. Perhaps one that pays low wages. Any suggestions? Low home prices would be a good indicator, right?
    31 Jan, 11:30 PM Reply Like
  •  
    It's actually a good rating, we will have a budget surplus next year.

    Political affiliations aside, Gov. Brown knows how to balance budgets and has done it before, he is doing it again.
    1 Feb, 01:02 AM Reply Like
  •  
    Mr Barrett, enjoy your brief respite, as your state pension system will lead to the junkyard...

    For those still in denial, there is always the wonderful world of Holeywood, Berkeley and Disneyland...
    1 Feb, 10:13 AM Reply Like
  •  
    Schadenfreude aside, it's hard to deny Gov. Brown's track record of being fiscally conservative and righting the ship

    Also, considering the economic cycle, 2 things coming together means we got this.

    Of course, the pension issue does need to be addressed, however not sure it spells the doom some are making it out to be.

    I would be more worried about the social security cliff at the national level.
    1 Feb, 01:46 PM Reply Like
  •  
    Mr Barrett, it was the brilliant Gov Brown, whom in his first occupation of the mansion allowed state government labor gangs...

    They do not want to address spending but rather take the old road of increasing taxes...The price will be paid as it is now in Euroland...
    1 Feb, 03:58 PM Reply Like
  •  
    He addresses both sides of the equation.

    That's why I like the guy so much, he doesn't fall on one end of the dogmatic spectrum, by addressing costs and revenues at the same time.

    This is the guy who refused the governor's mansion and drove himself to work every day in an economy car.

    That's top down leadership by example.
    1 Feb, 04:05 PM Reply Like
  •  
    The pension crisis should be less severe going forward.
    http://bit.ly/W9hPfm
    1 Feb, 11:38 PM Reply Like
  •  
    Boy, oh Boy, I am glad you have complete confidence in the pols..
    2 Feb, 10:07 AM Reply Like
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    Just this one. :)
    2 Feb, 11:45 AM Reply Like
  •  
    We'll see about those pols.
    http://bit.ly/WmHj9g
    2 Feb, 11:17 PM Reply Like
  •  
    From 1992 to 2012 state spending went up 2 1/2 times....
    The states part of GNP was 7% in 1992, now it is 10%...

    He supports the $60 billion high speed rail and you say he is addressing costs...

    http://bit.ly/VBDGtS <-------- spending chart
    1 Feb, 04:58 PM Reply Like
  •  
    The chart you linked shows costs coming down under his tenure.
    1 Feb, 06:00 PM Reply Like
  •  
    Mr Barrett, the top chart is total governmental unit spending...
    Please go to the last chart on the bottom of the page...

    Since 2010, state spending has increase 11% under Brown's tenure...
    1 Feb, 07:52 PM Reply Like
  •  
    I think there are a few key concepts that are missing from the analysis, and also spending per GDP is a very important concept I wouldn't just dismiss. It means the government is getting out of the way and making room for business.

    But also consider:

    1) Voters pushed through the tax increases through a referendum
    2) Even though spending will begin to increase (more people need more services), it is being done in a diligent manner, with many painful austerity cuts taking place since Brown took office
    3) Increased revenues allowed for a budget surplus even with spending increases ($850 million surplus)
    4) Most of the spending increases Brown is proposing are going towards schools and underprivileged schools. California has some of the best schools in the world. (Caltech ranked consistently #1).

    I think we need to look past the tax or cut debate and move practically. As I stated, Brown did it before and he did it again. The guy is considered a very fiscally conservative Governor and I think he is doing a fantastic job.

    This article is much more balanced, and Brown himself even warns about overspending.

    http://bit.ly/YJPH54

    "Brown took both approaches. He pushed an austerity message that forced cuts throughout state government during his first two years in office while persuading California voters to approve increases to the state sales tax and on income taxes on high-income earners.

    Despite the new revenue flowing in, Brown has warned his Democratic colleagues who control both houses of the state Legislature that they must not overplay their hand and spend too freely. The governor wants to build a reserve fund for future downturns and focus spending on K-12 education, which already accounts for more than half the state's general fund spending."

    Finally, take a look at the general fund website, and you see it comes down the first two years:

    http://bit.ly/YJPVZX

    "How the money in the General Fund is spent is determined by the Governor and the Legislature through the annual state budget process. The spending choices available to the Governor and Legislature are limited by federal or state laws and requirements, court orders, and ballot measures passed by the voters."
    1 Feb, 08:38 PM Reply Like
  •  
    You can look just year to year and see in the "Local Assistance" category which accounts for $42 Bil of $54 Bil in disbursements, that K-12 spending is up 27% y-o-y, Medical Assistance 6%, and Developmental Services - up 20%. What's that K-12 number about?

    http://bit.ly/WxjYNs
    1 Feb, 06:11 PM Reply Like
  •  
    Money article on the financial turnaround. "Big taxes + big spending cuts = California budget surplus"

    Sorry if this upsets those who like to partake in Schadenfruede and use my state as a strawman punching bag catchall for every bad policy on the planet !

    We aren't going anywhere, not gonna fall off into the ocean due to an earthquake and are revving the engine back up for the next leg up!

    Great job Gov. Brown ! Don't call it a comeback !

    http://cnnmon.ie/11QnCKg
    7 Feb, 01:26 PM Reply Like
  •  
    I might be more enthusiastic about the budget situation if it were not for the prospect of having to build the high speed rail project through the middle of the state. I say "having to" because the project is a mandate from the voters.
    7 Feb, 01:42 PM Reply Like
  •  
    It's a good point, kinda strange where it is starting out in the middle of agriculture land and not close to the population centers.
    7 Feb, 03:46 PM Reply Like
  •  
    I think the project is unfortunate partly because there are still a handful of local urban rail projects which need to be constructed. The project will no doubt siphon off funding which could have been directed toward the local projects.
    The city folk actually ride the trains. We country folk aren't much interested in that.
    7 Feb, 03:57 PM Reply Like
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