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California's got a new problem: Too much money. This year's expected surplus of $1.2B-$4.4B...

California's got a new problem: Too much money. This year's expected surplus of $1.2B-$4.4B comes three years after the state faced a deficit of nearly $60B. Governor Brown - arguing the surplus is the result of a flood of capital-gains realizations ahead of higher 2013 tax rates - wants to put the money aside. The legislature - dominated by Brown's own party - wants to spend it.
Comments (18)
  • bbro
    , contributor
    Comments (9323) | Send Message
     
    Democrats...am I right??
    26 May 2013, 09:17 AM Reply Like
  • bankingqueen
    , contributor
    Comments (135) | Send Message
     
    Always democrats
    26 May 2013, 12:09 PM Reply Like
  • GaltMachine
    , contributor
    Comments (1135) | Send Message
     
    bbro,

     

    A retroactive tax is hardly a fair policy. That is as close as a government can get to stealing. Clearly in the short run you can manufacture a surplus if you want to by taking it away from the "rich" and the most productive segments of industry.

     

    But will it be sustainable?

     

    I say no. Especially now that those capital gains were harvested in anticipation of the threatened rise in taxes.
    26 May 2013, 12:48 PM Reply Like
  • rambler1
    , contributor
    Comments (398) | Send Message
     
    Always spending other people's money. Disgraceful.
    26 May 2013, 09:55 PM Reply Like
  • Bret Jensen
    , contributor
    Comments (9832) | Send Message
     
    They might want to put some to the $300B to $500B unfunded liabilities to the overpromised/overpaid public employee union's pension and benefit plans...............
    26 May 2013, 09:19 AM Reply Like
  • Ron Myers
    , contributor
    Comments (256) | Send Message
     
    But these liabilities can always be decreased by further increases in the discount rate to record spreads above corporate bond yields. And on the asset side they can switch to 100% stocks!!! Why put in a single dollar into these plans.
    26 May 2013, 10:16 AM Reply Like
  • Rico Kastilani
    , contributor
    Comments (161) | Send Message
     
    I doubt it. These crooks will take the money and put it in their pockets....
    26 May 2013, 09:22 AM Reply Like
  • apberusdisvet
    , contributor
    Comments (2860) | Send Message
     
    Calpers unfunded potential liabilities are in the trillions, not billions.
    There are at least 100,000 that could potentially collect over $3 million in total benefits. Start collecting $100k at age 50, live to age 80. These include police and fire, prisons, and administrator positions. Do the math.
    26 May 2013, 10:49 AM Reply Like
  • D_Virginia
    , contributor
    Comments (2280) | Send Message
     
    Nope, still billions, ~$330B at a recent estimate:
    http://reut.rs/12WwfRV

     

    And only about 2% of current retirees get $100K or more -- less than 15,000 individuals:
    http://tinyurl.com/o39...

     

    Let's keep our hyperbole grounded in something resembling reality, shall we?
    26 May 2013, 11:04 AM Reply Like
  • chopchop0
    , contributor
    Comments (3137) | Send Message
     
    Of course they do. $150K salaries for correctional officers is simply too low in this day and age.

     

    http://bit.ly/18s73Vi
    26 May 2013, 10:59 AM Reply Like
  • maybenot
    , contributor
    Comments (3368) | Send Message
     
    Go California!

     

    As California goes -- so goes the nation (sorta).

     

    jmho -- relax.
    26 May 2013, 03:50 PM Reply Like
  • winningtrader
    , contributor
    Comments (2476) | Send Message
     
    Party poopers ...why mention the 100's of billions of deficit (more likely trillions) when today we need to enjoy the $1 billion surplus (coming from creative accounting of course).
    26 May 2013, 04:01 PM Reply Like
  • whidbey
    , contributor
    Comments (3391) | Send Message
     
    This is embarrassing to most citizens, and possibly some Californians. Brown, who for once has basic human instincts for survival, is set upon by his fellow party members for his sanity, save a few bucks. It is a lesson that ought not be ignored: political choices in American politics are never optimal and often destructive. Watch Congress, it will do the same in the fall. Pressure off debt growth for a while? Pretend the crisis is over. Yes, We have problems, and it is us.
    26 May 2013, 07:56 PM Reply Like
  • Poor Texan
    , contributor
    Comments (3529) | Send Message
     
    Gee a surplus? But I didn't see a tax cut among the options. lmao
    26 May 2013, 08:45 PM Reply Like
  • montanamark
    , contributor
    Comments (1434) | Send Message
     
    A financial report issued by state auditors in April finds that the state of California is in the red by an unsustainable $127.2 billion.
    The report says that the state’s negative status increased year, largely because it spent $1.7 billion more than it received in revenues and wound up with an accumulated deficit of just under $23 billion in fiscal year 2011-2012, the Sacramento Bee stated.
    Gov. Jerry Brown has referred to the deficit and other budget gaps, mostly money owed to schools, as a “wall of debt” totaling more than $30 billion, the Sacramento Bee reported.

     

    Read more: http://bit.ly/12HvNFj
    Follow us: @washtimes on Twitter
    26 May 2013, 09:10 PM Reply Like
  • montanamark
    , contributor
    Comments (1434) | Send Message
     
    The California State Auditor has released the state government's audit for the 2011-12 year (PDF). The state collected $218 billion (including $60 billion in federal aid, $104 billion in state taxes, and $51 billion in various fees and charges), but spent over $225 billion, a deficit twice the size of the year before. On the books, the state has $199.9 billion in assets but $215.4 billion in liabilities; eliminating assets unpledgable against obligations results in an unrestricted net asset deficit of a staggering -$127 billion. Put succinctly, the state has booked $127 billion more in promises and liabilities than it has assets to pay for them. (Part of this is because the state borrows to build things for local governments but turns title over to them, which is running up debts.) It's been getting deeper every year.
    The report did not include the full cost of state retiree health and pension costs, so the real amount is probably much higher.
    26 May 2013, 09:14 PM Reply Like
  • montanamark
    , contributor
    Comments (1434) | Send Message
     
    The federal tax that California employers pay to support the unemployment insurance (UI) program increased January 1 due to the continuing insolvency of the UI Trust Fund, and will continue to increase every year until the debt is paid. The state administration projects that without corrective action, the federal loan will not be fully repaid until sometime after 2020. California employers have been paying higher taxes since the beginning of 2011 because the state has not repaid money it borrowed from the federal government to pay UI benefits. California’s outstanding federal loan was $10.3 billion at the start of this year, more than $6.5 billion greater than the next highest state loan, New York. California has the third highest unemployment rate in the nation, behind Rhode Island and Nevada, according to the U.S. Bureau of Labor Statistics.
    26 May 2013, 09:30 PM Reply Like
  • DeepValueLover
    , contributor
    Comments (8157) | Send Message
     
    If California has a budget surplus at lunch then they will have a budget deficit by dinner.

     

    That is exactly the governance that the people of California keep putting back into office so good luck to them.
    27 May 2013, 11:30 PM Reply Like
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