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California faces a deficit of $16B, Governor Jerry Brown said yesterday (video), not the $9B...

California faces a deficit of $16B, Governor Jerry Brown said yesterday (video), not the $9B he'd estimated in January. The ballooning gap is due to tepid tax revenues and slow progress in slashing budgets, which Brown blamed on the federal government and the courts. One bit of hope is Facebook's IPO, which could bring in $2B. (see also)
Comments (89)
  • divinecomedy
    , contributor
    Comments (466) | Send Message
     
    How about the hot housing market in the valley that we kept hearing about? Surely that should bring in a couple of billion more?
    13 May 2012, 04:08 AM Reply Like
  • davidingeorgia
    , contributor
    Comments (2713) | Send Message
     
    "The ballooning gap is due to the state of California still spending money at a ridiculous rate and to tepid tax revenues caused by the state's extremely hostile business environment driving many of the state's former employers to relocate out of California. Despite all this, the state has still managed to continue paying enormous salaries and retirement benefits to members of the state's public employee unions and to waste billions more on a wide array of other boondoggles. Brown declined comment on public employee union pay and benefits, citing his need to be re-elected."

     

    There. Fixed it for you.
    13 May 2012, 06:35 AM Reply Like
  • brachiosaurus
    , contributor
    Comments (237) | Send Message
     
    of course, you feast on a budget gap that represents less than 1% of California GDP.

     

    these so called boondoggles include the best university system in the world, and attempts at creating world-class infrastructure.

     

    There's a reason that the most innovative companies in the country are headquartered in California, and not Georgia. Note also that CA has a 25% higher GDP per capita than Georgia.
    13 May 2012, 06:55 AM Reply Like
  • D_Virginia
    , contributor
    Comments (2280) | Send Message
     
    I agree with brach. The cognitive dissonance in some people is amazing.

     

    Why do some of most advanced and most profitable companies make their homes in California? Why do some of the best and brightest students come out of California's university system? Why isn't Apple actually located in Delaware?

     

    Yes, CA has a serious budget problem and they need to address it, but you can't pretend that the state doesn't achieve a lot of value for all its spending, especially at the state level (the municipalities are another story).
    13 May 2012, 08:51 AM Reply Like
  • Wyatt Junker
    , contributor
    Comments (4503) | Send Message
     
    You're looking in the past. California is now in the rear view mirror.

     

    What you're talking about is so 1998. The state is imploding.

     

    "But how do you get out of a tax load that large? Simple, just renounce your US citizenship, and, poof, no more US taxes up to a point. Of course, renouncing US citizenship is not something that should be taken lightly, but for some, the value of a United States passport might not equal a tax bill that amounts to millions of dollars.

     

    Enter Eduardo Saverin, one of the original Facebook four, who still owns a good-sized piece of Facebook. How big? This big: Saverin's stake in Facebook is roughly 4% and valued around $3.84 billion.

     

    Let’s run our numbers again, just for fun. 15% of 3.84 billion is a stunning $576 million dollars. So, would it surprise you that Mr. Saverin recently gave up his US citizenship? It shouldn’t. For proof, check the list. He’s out of here."

     

    http://tnw.co/JwUyfB

     

    In fact, they're all OUT OF HERE.

     

    http://1.usa.gov/J8Dyxv

     

    Wanna tax the rich? Want their 'fair share'? Time to be patriotic, eh Biden?

     

    HAHAHAHAHA.

     

    They're all GettingTFO.

     

    Buh bye america. It was nice knowing you.
    13 May 2012, 11:38 AM Reply Like
  • TomasViewPoint
    , contributor
    Comments (4845) | Send Message
     
    For half a billion bucks I would be moving too. This is the same behavior as rich people claiming FL as as their primary residence to avoid state taxes.
    13 May 2012, 01:26 PM Reply Like
  • ephud
    , contributor
    Comments (2458) | Send Message
     
    re: "Why do some of most advanced and most profitable companies make their homes in California?"

     

    Yes, why do they? I can understand why they incorporated there back in the 60s and 70s but who would start up a new company in a state that is so hostile to business while welcoming with open arms the invasion of illegal aliens and the ensuing additional tax load? The chickens have come home to roost in California.
    13 May 2012, 04:32 PM Reply Like
  • SanDiegoNonSurfer
    , contributor
    Comments (2826) | Send Message
     
    What chickens?

     

    At 2T, California's GSP (gross state product) is the nations' largest and it's growing at a respectable 3.1%/y -- not a mega boom but far from a recessionary rate. California's state welfare costs are a mere 1% of GSP v. the 2.3% of GSP that "libertarian" Vermont spends on welfare.

     

    California's state-level debt is 6.65% of GSP, above North Dakota's 6.55% but well below Kentucky's 7.52%, Missouri's 8%, or Montana's 12.77%, and far below the 18.89% of Romney's Massachusetts.

     

    Source:
    http://bit.ly/J0B0me
    13 May 2012, 04:45 PM Reply Like
  • chihawk
    , contributor
    Comments (2099) | Send Message
     
    brach,
    That's the CA I grew up in (18 years ago). I am a product of that University system (UC Irvine). Trouble is I left for Texas 18 years ago and many businesses, entrepreneurs, and innovations went elsewhere too. Silicon Valley is still great, but it is no where near the same CA where I grew up.

     

    The unions provide nothing. The deficit is not an aide to what made CA great. In fact, my buddies kids got sent to University outside California due to cost. I think it is a shame that once great University system can no longer serve it's own residents.

     

    With the right priorities the state can be fixed, but preserving the deficit by pandering to vote buying unions is no solution. And Republicans with "blood oaths" against taxes are wrong too. I think a more moderate and pragmatic approach is needed. I sincerely wish you well. Things worked out for me, I hope for the same for those I know that are still there.
    13 May 2012, 07:10 PM Reply Like
  • David Hatchett
    , contributor
    Comments (28) | Send Message
     
    I like the pork rhine states. Hello Georgia!
    14 May 2012, 09:47 PM Reply Like
  • brachiosaurus
    , contributor
    Comments (237) | Send Message
     
    This wouldn't be an issue, if only California received a tax rebate from the Federal government for the fact that it receives less than 80c for every $1 it sends to the Federal government.

     

    http://bit.ly/vi8oS6

     

    Or better yet, why don't states like Alaska, Alabama, or Oklahoma just send a check for the proportion of funds that they leach from California. That'll help. Then CA can get to the business of cracking down on the corporations and millionaires that evade taxes via Prop 13.
    13 May 2012, 06:50 AM Reply Like
  • Tack
    , contributor
    Comments (13562) | Send Message
     
    Hey, CA can "crack down" on all those "tax evaders" (while you're at it, look up definition of "tax evasion") simply by passing this November the tax initiatives to increase income taxes, sales taxes and eviscerate the Prop-13 protections. It's all going to be on the ballot.

     

    If they pass (especially the Prop-13 changes), however, you'll have anew form of evasion. People with wealth will merely "evade" California.
    13 May 2012, 07:00 AM Reply Like
  • brachiosaurus
    , contributor
    Comments (237) | Send Message
     
    I don't think this new form of evasion is much of a risk. If they responded to simple, naive costs like that, they most likely wouldn't be in CA in the first place, where they must pay relatively high real estate costs just to live here. They're welcome to leave the beaches, mountains, universities, and great cities, but of course most wealthy (if they are already here) wouldn't even consider it.
    13 May 2012, 07:32 AM Reply Like
  • Tack
    , contributor
    Comments (13562) | Send Message
     
    brach:

     

    Just to demonstrate how incorrect this is, about a year ago there was an article referencing wealth migration patterns in the U.S. In it, they highlighted the five U.S. counties with the highest outward migration and the five with the highest inflows. Where do you think these were?

     

    The five highest outflows were led by #1, Santa Clara County, followed by four others in MA, NY, NJ, and MD, all high-tax states. The five highest inflow counties were all in FL and TX, two states with no state income taxes.

     

    In fact, the laws of economics do work, even despite beautiful mountains, etc. I, myself, know this because I am a former Santa Clara County resident, who, now, lives in Florida, even though I visit CA frequently.
    13 May 2012, 07:39 AM Reply Like
  • Papaswamp
    , contributor
    Comments (2198) | Send Message
     
    Keep going down that road and more people will be leaving than coming into the state...or is that already occurring? It's becoming too expensive for the average person. Make it too expensive for the wealthy and they will also follow. As to CA not getting it's fair share of tax revenue back....well that is exactly how it works when you pay into a pool and the wealth gets redistributed. Seems a bit funny you want the wealthy to pay their 'fair share' yet complain when CA does just that.

     

    "The proportion of Californians who had moved here from out of state reached a 100-year low of about 20% in 2010, and the decade measured by the most recent census was the first in a century in which the majority of Californians were native-born.

     

    The demographics of California today more closely resemble those of 1900 than of 1950: It is a mostly home-grown population, whose future depends on the children of immigrants and their children, said William Frey, a demographer and senior fellow at the Brookings Institution.

     

    "We used to say California, here we come," said Frey. "That now has flipped."

     

    Experts point to various causes of the turnaround, most of them rooted in a flagging economy. But exorbitant housing prices — too high for many struggling Californians despite a burst housing bubble — still play a role."
    http://lat.ms/KWqWfi
    13 May 2012, 07:50 AM Reply Like
  • Leftfield
    , contributor
    Comments (3829) | Send Message
     
    "The proportion of Californians who had moved here from out of state reached a 100-year low of about 20% in 2010..."

     

    Most of the remaining inflow is from Mexico, and long-suffering California taxpayers have been forced to provide benefits to all comers.
    13 May 2012, 08:13 AM Reply Like
  • brachiosaurus
    , contributor
    Comments (237) | Send Message
     
    I've read the article and I'm familiar with the migration myth that you are pushing. The myth incorrectly associates causation with correlation. In fact, a major reason for this net wealth migration/people migration is because high wealth/high density regions naturally tend to have a net diffusion of people to poorer/lower density. It takes strong economic forces to counteract this diffusion (e.g., the industrialisation of the western countries in the 19th/early 20th century, and currently happening in China). It seems you are a smart fellow, so I think you'll appreciate that there is an analogy of this diffusion with the 2nd law of thermodynamics.

     

    The particular case of Santa Clara County is a good example because this county has been the scene of one of the greatest bouts of wealth creation. There is net migration of wealthy out of Santa Clara County, but this is almost a mathematical certainty when the amount of wealth created there greatly exceeded most of the rest of the country. Now I don't deny that FL or TX are creating a lot of wealth right now compared to other places, but really the effect you are seeing is that generally poorer states are in the gradual process of catching up with the richest states. It is no coincidence that the 5 states with highest net flows are the richest per capita (if discussing wealth flow), and highest population density (if discussing population flow).

     

    Here is an article, written by sociologists who properly control for non-salient and salient factors. Honestly compare the quality of the academic article to the study by an industry lobbying group.
    http://goo.gl/eRIj8

     

    Did you really move to Florida because of you didn't like your income tax rate?
    13 May 2012, 08:31 AM Reply Like
  • brachiosaurus
    , contributor
    Comments (237) | Send Message
     
    In summary, there is good evidence that rich people don't leave states because they are upset with their taxes.
    BTW, there is an exception for high income people in traveling professions (like famous sports athletes) who don't necessarily spend a huge fraction of their time in the place of residence.
    13 May 2012, 08:42 AM Reply Like
  • Tack
    , contributor
    Comments (13562) | Send Message
     
    brach:

     

    Thanks for the intelligent dialogue. It's refreshing.

     

    You raise good points, and, as an engineer by collegiate education, I fully appreciate the analogy to thermodynamics. However, I am not sure the analogy directly applies. First off, the outward migration isn't going to the "poorest" states; it's going to those with the lowest taxation. There's a difference. Furthermore, past migrations didn't see wealthy people move to poor regions; they saw poor people move from wealthy regions to poorer regions because they sensed opportunity. Now, that doesn't occur because the wealthy states engage in socialism, which blunts the need for them to improve their situation.

     

    Personally, I moved away from Silicon Valley because, after twenty years in the maelstrom, I needed a change. My wife and I considered Monterey County, but she grew up there and was never a fan of the "cold" (as she describes it) weather on the coast, so we wound up on Florida's gulf coast, where we visited every year, anyway, and where I have a sister living. Economics, too, played some role, as we sold our house in CA at the very week the realty market frenzy peaked in 2000 and bought a gorgeous waterfront home in Sarasota that would have been laughably expensive in CA. Since then, we realize how fortunate we've been, as our home here as appreciated very substantially (even after the recent housing declines) and we don't face myriad personal taxation issues that confront Californians, now. We still have many friends and family and visit CA frequently, but we also know that any passing thought of relocating back there would be most economically imprudent.
    13 May 2012, 08:51 AM Reply Like
  • brachiosaurus
    , contributor
    Comments (237) | Send Message
     
    well done getting out during a market peak!
    I am refreshed as well, arguing with someone who is smart, but more importantly attempts to be intellectually honest.

     

    I think my analogy is good, although admittedly I'm no sociologist. A particularly cool piece of evidence for the analogy is looking at the net flows of wealthy people between poorer states with high taxes (not many by the way), and richer states with low taxes (also, not many of these). One stark example is the net flow between Hawaii (poor) and Alaska (rich), for which the lobby-group funded "studies" would prepare you to believe there would be an overwhelming flow from Hawaii (high tax) to Alaska (low tax). In fact there is a slight flow in the opposite direction.

     

    The "study" should be ringing alarm bells to you because it is obvious that they haven't controlled for ongoing changes in the level of urbanization, or ongoing changes in productivity, or even obvious situations like resource booms. TX and other inflow states are only now (slowly) catching up in levels of urbanization, and levels of productivity, that are seen in the outflow states (and they are still pretty far behind, so the trends will continue barring some major economic forces). It has nothing to do with taxation, except for the fact that the states that have more ground to cover are generally those that tend to be red state. Additionally, in some particular low density, resource rich, red states, like Alaska, TX, OK, ND, the relative level of job creation is further boosted by natural resources.

     

    by the way, in Florida I think there is currently a net domestic outflow right now.
    13 May 2012, 09:55 AM Reply Like
  • Papaswamp
    , contributor
    Comments (2198) | Send Message
     
    Brach,
    The study cited relies heavily on 1998 study and a Canadian study. Additionally, their data is before the 2010 census results as well as tax revenue results for 2007. There is substantial migration from high tax states to lower tax rate states, as well as the extremely wealthy moving out of country. The 2010 census clearly shows CA population growth was purely native with the biggest decline in 100yrs from people moving into CA. This is classic demographic decline signal. Regardless of what one wishes to point to as the cause....the fact is....it is happening.
    http://bit.ly/M9hpRi
    13 May 2012, 09:56 AM Reply Like
  • brachiosaurus
    , contributor
    Comments (237) | Send Message
     
    it is happening, but domestic migration is only 1-2%/yr effect and not the major cause of population changes, and it is not due to taxation whatsoever.
    13 May 2012, 10:13 AM Reply Like
  • brachiosaurus
    , contributor
    Comments (237) | Send Message
     
    about the fair share business. I'd be happy with it, if the tax brackets were indexed on a state-to-state level based on cost of living (but, of course, this would remove a lot of the state-to-state fiscal transfers).
    13 May 2012, 10:16 AM Reply Like
  • Tack
    , contributor
    Comments (13562) | Send Message
     
    Here's a fascinating tool:

     

    http://onforb.es/I6pRPX
    13 May 2012, 10:19 AM Reply Like
  • brachiosaurus
    , contributor
    Comments (237) | Send Message
     
    (except for the extremely rich, as you mention, and its not a large effect)
    13 May 2012, 10:28 AM Reply Like
  • brachiosaurus
    , contributor
    Comments (237) | Send Message
     
    cool
    13 May 2012, 10:29 AM Reply Like
  • SanDiegoNonSurfer
    , contributor
    Comments (2826) | Send Message
     
    brach, and Enron (with Bush's help) stole 13B from California.
    13 May 2012, 10:45 AM Reply Like
  • SanDiegoNonSurfer
    , contributor
    Comments (2826) | Send Message
     
    How many people either moved to CA or moved w/in CA in an attempt to benefit from the housing boom? And how many of those people who got caught unaware sought out cheaper digs after the bubble burst?
    13 May 2012, 10:51 AM Reply Like
  • apberusdisvet
    , contributor
    Comments (2897) | Send Message
     
    Brach: in counter to your argument (and I don't think it is an anomaly) there is the case of Maryland which increases the state taxes on millionaires only to see net tax revenues decline in subsequent years. Independent analysis showed that the wealthy voted with their feet. In addition, the CEO of Carl's Jr, a well entrenched and iconic SoCal fast food chain, is no longer expanding in California, but instead entering the Texas market, where the permitting costs are dramatically lower and the time frame to get approved is a month or two vs the 2 years or more in California. Further, Califiornia has some absurd regulations (that significantly impact the bottom line) on employee staffing for fast foodies that do not exist in Texas.
    13 May 2012, 10:58 AM Reply Like
  • Aristiphones
    , contributor
    Comments (1327) | Send Message
     
    I thought Florida was losing population now too. And you forgot North Dakota as an inflow. Such wonderful weather in North Dakota!
    13 May 2012, 11:14 AM Reply Like
  • Aristiphones
    , contributor
    Comments (1327) | Send Message
     
    even that has stopped now from what i'm told.
    13 May 2012, 11:18 AM Reply Like
  • Tack
    , contributor
    Comments (13562) | Send Message
     
    ap:

     

    Add Illinois to your list. Recent analysis blames the not-long-ago overnight 40% increase in the Illinois income tax with the reality that Chicago's realty market has recently been among the nation's weakest.
    13 May 2012, 11:32 AM Reply Like
  • Wyatt Junker
    , contributor
    Comments (4503) | Send Message
     
    LTCM, WorldCom and Enron were all created under Clinton. Research it.
    13 May 2012, 11:45 AM Reply Like
  • SanDiegoNonSurfer
    , contributor
    Comments (2826) | Send Message
     
    Wyatt, the date when Enron happens to have been founded as a company has zero to do with what Ken Lay, Jeff Skillings, and Ken Lay's close friend GW Bush did. Bush gave his buddies at Enron a monopoly over California's electrical distribution network, hooking them in with federal use of force as parasites to profit by directly fleecing Californians.

     

    When Governor Davis sought to take back state control over the grid and end the bloodsucking, Bush told him he wouldn't allow that. As Enron continued to suck wealth out of the state, Davis finally decided to go rebel and defy Bush. Almost immediately, Enron CEO Ken Lay flew out to California, visited an actor named Arnold Schwarzenegger and next thing you know Davis has been replaced by this Schwarzenegger guy. Enron eventually got busted criminally and when they did, Governor Schwarzenegger forgave his Enron benefactors all but 0.5B of the 13B stolen from California.
    13 May 2012, 12:20 PM Reply Like
  • brachiosaurus
    , contributor
    Comments (237) | Send Message
     
    yeah... California is not known for business start-ups and real entrepreneurial spirit or anything like that. you know those job creating start-ups throughout the bay area and in San Diego are just a lie by the liberal media. why would you consider doing business in Silicon Valley, when you could do it in suburban Houston, lol
    13 May 2012, 12:24 PM Reply Like
  • brachiosaurus
    , contributor
    Comments (237) | Send Message
     
    the Maryland talking point is a distortion. The main reason tax revenues decreased was because former millionaires were no longer millionaires--- that's what happens in a recession you know. Not because they are moving out for tax purposes.
    It's the same issue in Illinois.
    13 May 2012, 12:30 PM Reply Like
  • brachiosaurus
    , contributor
    Comments (237) | Send Message
     
    yes, that bloody liberal Ken Lay
    13 May 2012, 12:38 PM Reply Like
  • TomasViewPoint
    , contributor
    Comments (4845) | Send Message
     
    Alaska and OK could just add a tax on oil coming out of their states and they could more than make up any money coming from CA.
    13 May 2012, 01:28 PM Reply Like
  • Old Rick
    , contributor
    Comments (518) | Send Message
     
    Brach, you really live up to your handle! I was in CA in the 70s when prop 13 was passed. I've been reading about the Prop 13 red herring from guys and gals like you for 35 years. The CA problem is plain and simple; overspending and overtaxing and supporting wild union bennies and welfare. Remember the Gray Davis deal with the Prison guard union that locked in exorbitant salaries and pensions so he could try to get re-elected? How about the Murphy deal with the firefighters and cops in San Diego. City you say, but its a symptom of the California syndrome. As the demographics continue in the current direction you will see Sacramento Govt start to look more and more like Mexico. Don't think Nevada and Arizona are licking their chops at the current and future CA business and wealth emigration? Great weather (San Diego is the best in the world) only buys so much loyalty.
    13 May 2012, 01:32 PM Reply Like
  • TomasViewPoint
    , contributor
    Comments (4845) | Send Message
     
    Hate to interrupt the romance between Tack and Brach but my simple point is that capital looks for the best risk adjusted basis rate of return. If taxes are punitive in CA that will eventually take a toll especially if the economy is suffering. Depending on FaceBook to meet revenues is laughable. That is hope not a strategy.

     

    Moving from correlation to causation is a tricky business and there are plenty of people with axes to grind but punitive taxation on capital and incomes is going to show up at some point.
    13 May 2012, 01:38 PM Reply Like
  • Tack
    , contributor
    Comments (13562) | Send Message
     
    TVP:

     

    We just had a little cocktail-party smooch, not a genuine love affair. :-)
    13 May 2012, 01:57 PM Reply Like
  • Herr Hansa
    , contributor
    Comments (3080) | Send Message
     
    LTCM goes back far further to a time when Michael Milken was at Drexel. You can chart many other people who worked there and then went on to other companies that eventually got in trouble. Robert Rubin and Larry Summers, along with Reagan appointee Greenspan blocked Brooksley Born from warning (or legislating) derivative trade. If you went back a little further, you would find that Salomon Brothers becoming a public company led towards many other financial disasters later on. A book, or two, could be written on this stuff, but Michael Lewis beat most authors to it.
    13 May 2012, 02:42 PM Reply Like
  • SanDiegoNonSurfer
    , contributor
    Comments (2826) | Send Message
     
    Arizona and Nevada are not growth regions with a dynamic, tech-savvy youth population. No offence to either state but demographically speaking, they're places people go to grow old and die.
    13 May 2012, 03:56 PM Reply Like
  • ephud
    , contributor
    Comments (2458) | Send Message
     
    I too have left California for more favorable conditions. I have a small studio in the back of my rental property in Santa Cruz, very near the beach. I don't reside in California for tax purposes but you'd be surprised how often I have to go out there to check up on my rental property...The trip there and all the associated expenses are of course a tax write-off. God knows I wouldn't go out there for pleasure, it's strictly business.
    13 May 2012, 04:42 PM Reply Like
  • SanDiegoNonSurfer
    , contributor
    Comments (2826) | Send Message
     
    So again, leftfield, a mere 1% of California's GSP goes towards state-level welfare while so-called "libertarian" Vermont spends 2.34% of its GSP on state-level welfare benefits: http://bit.ly/JosKNy But hey, don't let facts get in your way.
    13 May 2012, 05:00 PM Reply Like
  • Mobywhite
    , contributor
    Comments (413) | Send Message
     
    Brach,

     

    I live and own a small business in California. This is my second and last business in this state. I'll sell it in the next year or two and will incorporate and run my next business from Nevada where we will buy a house and live for 50.1% of the year.

     

    I've already got one very successful friend doing this and I know of another who is thinking about it. This is on top of two friends who have left for Texas and Nevada already.

     

    For me, it's not the taxes in California as much as the hostility to businesses exhibited by our wonderful state. In 18 year in business I've twice had a complaint filed by ex-employees. The first we won in court after the EDD auto awarded him 65% of the gross profit on a large sale we made that he assisted in as a trainee.

     

    The second time was absolutely incredible. I was subjected to the most hostile interview I've ever seen in my life by the EDD. Hostile is a nice word. We won that case also by the way.

     

    If I ever go before the EDD again I'll find some type of small video and audio recorder to tape the meeting in case I'm subjected to the same level of hostility. It would be a real eye opener for the majority of people who don't run businesses.

     

    I will never again start a business in this state.
    14 May 2012, 03:57 AM Reply Like
  • NUNAY the KING
    , contributor
    Comments (241) | Send Message
     
    Have to agree with Tach here, we are in Ventura County and we seriously are considering saving 10% of our retirement income by moving out of the state. It's a tough decision, I cannot imagine others are not considering the same as us, as we are very average income here.
    14 May 2012, 04:15 AM Reply Like
  • SanDiegoNonSurfer
    , contributor
    Comments (2826) | Send Message
     
    Hi Mobywhite, Having three employees of a small business file formal complaints seems unusual! I've had a small business here for eleven years and also know a large number of other business owners. I've never heard a similar story from any of them.
    14 May 2012, 11:48 AM Reply Like
  • Mobywhite
    , contributor
    Comments (413) | Send Message
     
    Congratulations, you are another person on SA who has no idea what they are talking about.

     

    Having only TWO people file claims in 18 years in this state is a miracle.
    14 May 2012, 12:23 PM Reply Like
  • jhooper
    , contributor
    Comments (6045) | Send Message
     
    http://bit.ly/J4GgF7
    14 May 2012, 12:25 PM Reply Like
  • SanDiegoNonSurfer
    , contributor
    Comments (2826) | Send Message
     
    Mobywhite, out of curiosity, I took a quick look at the EDD to see what sort of complaints they would even handle. Looks like sexual harassment and discrimination (sex, race, religion, e.g.) are the only complaints. I'd be interested in the story of how a successful sales call became the basis for a sexual harassment or a discrimination complaint. Would you mind sharing that?
    14 May 2012, 01:19 PM Reply Like
  • Mobywhite
    , contributor
    Comments (413) | Send Message
     
    We hired a young man for a newly created position we called Sales Trainee. This was a three month crash course in our industry and how we sell. The idea was to match this person with an experienced Account Manager. The Account Manager would train them to do the job of an Account Manager and after three months the trainee would get promoted to an Account Manager and be expected to handle their account base.

     

    During this Trainee's first three months the Account Manager had an opportunity at one of his clients. He ended up closing the sale of about $40,000. At this time we were a network integration company. The trainee new nothing of computers much less of networking so he could not have handled the sale by himself whatsoever which is what he claimed he did.

     

    At the EDD hearing he stated that he had handled the sale that was worth $100,000 (he didn't have the size right) and that the gross profit was $40,000 and I had promised him $10,000. Our compensation structure paid 25% of gross profit so he said he was due $10,000.

     

    The mistake I made was that I had not created a position directive for this new position so I had nothing that said he wasn’t paid commission during his training period. I did show his offer letter which stated during the three months of training he would be paid x dollars an hour. However, that offer letter didn’t say he wouldn’t be paid commissions. I pointed out that he was terminated weeks before we got the signed quote, he didn’t know the deal size and didn’t have the background or the skillset to handle this sale. I pointed out that no business is going to pay commissions to two sales people for the same sale. That was all meaningless to the commissioner and she awarded him $10,000 on a total sale of $40k (about 65% of the GP).

     

    So I got my lawyer involved. In California, employees have nothing to lose in filing a claim. If they lose the hearing then they are only out a little bit of time. If they win the hearing which they do a large percentage of the time then the business can take it to a court but if they lose they have to pay legal fees for both parties. If the employer wins they cannot get legal fees from the plaintiff. Employees in California literally have nothing to lose and it is impossible to keep up with all the rules and regulations in this state. I have no doubt that if I was audited for every possible rule I would be in violation of some even though we work hard to meet them all. This has created a group of people who move from company to company suing them.

     

    So my lawyer started taking depositions from me, the Account Manager who handled the sale, our Accounting Manager and then hat in hand I went to the client and asked the two executives who we worked with if they would testify to which they agreed.

     

    Of course this person didn’t want to actually go to court because they would lose so we settled for $2k. We agreed on $2k because that was half of the minimum number my lawyer said I would spend in legal fees if we continued to court. So the cost to my company was a lot of stress, scores of hours for me and my staff, $2k to this crook and $5k in legal fees.

     

    There was no mistake or misunderstanding. He knew he wasn’t entitled to commissions and he only marginally assisted the Account Manager in putting the proposal together. It was more than a year after he was terminated that he filed the claim. That is California and the burden of the rules and regulations combined with the hostility that our state government shows towards businesses is why this business will be the last businesses I ever start in California.
    14 May 2012, 02:49 PM Reply Like
  • SanDiegoNonSurfer
    , contributor
    Comments (2826) | Send Message
     
    mobywhite, thanks for sharing the story. It's always better to put everything in writing. That's for sure! Good luck w/your next venture.
    14 May 2012, 02:53 PM Reply Like
  • nasdaq99
    , contributor
    Comments (114) | Send Message
     
    do a google for "leaving california"!!!

     

    just let the unions have it. it will work out pretty much like Greece.

     

    or maybe Warren Buffet might like to help close that gap too. what lunacy that was, like offering martinis at the AA meeting.
    13 May 2012, 07:31 AM Reply Like
  • Micah
    , contributor
    Comments (478) | Send Message
     
    What would happen if CA were to legalize marijuana and tax it?
    13 May 2012, 08:24 AM Reply Like
  • SanDiegoNonSurfer
    , contributor
    Comments (2826) | Send Message
     
    Micah, I think the feds would have something to say about that. Except for that it's a good idea.
    13 May 2012, 11:05 AM Reply Like
  • Wyatt Junker
    , contributor
    Comments (4503) | Send Message
     
    Its a good idea. Desperate and sad, but sure... 'good'. heh I guess when you're left with no more good ideas, might as well go junkie.
    13 May 2012, 11:46 AM Reply Like
  • SanDiegoNonSurfer
    , contributor
    Comments (2826) | Send Message
     
    No, the reason it's a good idea is because MJ is what's driving the illegal Mexican drug trade. Decriminalize it and tax it. Just makes sense. Either that or make the far more deadly drug ethanol (a.k.a booze) illegal too. Oh wait we tried that already, didn't we. How'd that work out anyhow?
    13 May 2012, 12:33 PM Reply Like
  • TomasViewPoint
    , contributor
    Comments (4845) | Send Message
     
    You would have Silicon Valley, Napa and Sonoma and Green Acres!!!
    13 May 2012, 01:39 PM Reply Like
  • The Geoffster
    , contributor
    Comments (4013) | Send Message
     
    What would happen if CA had a major earthquake and required Katrina type assistance?
    13 May 2012, 08:49 AM Reply Like
  • 544
    , contributor
    Comments (29) | Send Message
     
    California have been spending more then it takes in for years, like Greece,it will come a time that it will no longer can borrow to cover
    the deficit.California congress controlled by democrats can not see it.
    We have our selves to blame for voting for them so they can continue to spend like drunk sailors.
    13 May 2012, 09:24 AM Reply Like
  • Wyatt Junker
    , contributor
    Comments (4503) | Send Message
     
    Grey Davis was a disaster to this state. During the dot com run up pre-2000 he went BatS crazy and locked in long term pension contracts with unsustainable annual raises with all the public employees using the stock market trajectory as his new bargaining chip to rip off the state. We've never been able to reverse course since.

     

    In a word, it is corruption. And in the end there is nothing new under the sun.
    13 May 2012, 11:48 AM Reply Like
  • Wyatt Junker
    , contributor
    Comments (4503) | Send Message
     
    This is all you need to know.

     

    http://bit.ly/J29qol

     

    Kind of says it all.
    13 May 2012, 11:51 AM Reply Like
  • Wyatt Junker
    , contributor
    Comments (4503) | Send Message
     
    Enjoy.

     

    http://bit.ly/ISagiJ
    13 May 2012, 12:10 PM Reply Like
  • Joe Dirnfeld
    , contributor
    Comments (1128) | Send Message
     
    Jerry brown, what a disaster. They deserve what they vote for.
    13 May 2012, 12:58 PM Reply Like
  • SanDiegoNonSurfer
    , contributor
    Comments (2826) | Send Message
     
    Joe, Schwarzenneger left the state with a 28B deficit. During the two years since Brown has been governor that's been whittled down to 16B. A deficit reduction of 12B, achieved during the worst economic crisis since the Great Depression, can hardly be called a disaster.

     

    Unemployment is still far too low. However, since Brown took office, it's been improving at a faster rate than the national average. Additionally, since Brown took office, hiring by the state government is down compared to what it was in 2010 under his Republican predecessor, Schwarzenegger. That means that the faster-than national job growth in California is entirely due to private sector growth.

     

    There is simply no objective measure under which you can, with honesty, say that Brown has been "a disaster".
    13 May 2012, 01:10 PM Reply Like
  • TomasViewPoint
    , contributor
    Comments (4845) | Send Message
     
    Actually Arnie talked/acted more at times like a Dem to appease his wife or housekeeper..........not sure which. Fiscal conservatism is related to actions not party because the numbers don't lie.
    13 May 2012, 01:42 PM Reply Like
  • SanDiegoNonSurfer
    , contributor
    Comments (2826) | Send Message
     
    Wasn't making a partisan point. Was replying to a false assertion.
    13 May 2012, 01:58 PM Reply Like
  • Valley Boy
    , contributor
    Comments (2201) | Send Message
     
    I think that unemployment is still far too high. If the unemployment can be brought down to reasonable levels then the state budget deficit can be reduced with increased tax revenues coming into the state treasury. That would mean that the private sector needs to made stronger in this state by various means.
    13 May 2012, 02:15 PM Reply Like
  • SanDiegoNonSurfer
    , contributor
    Comments (2826) | Send Message
     
    Valley Boy, yes, I agree. The trend is in the right direction but there's a long ways to go yet. California had a ton of construction workers during the housing boom. They either need to find other types of work or leave the state before unemployment can come down to normal levels. Possibly some of the population growth in shale-boom states is due to construction workers looking for other types of manual labor.
    13 May 2012, 02:47 PM Reply Like
  • Herr Hansa
    , contributor
    Comments (3080) | Send Message
     
    Temporary and part-time employment has grown. Average worker wages in California are down, though that is true of other parts of the country. Meanwhile public workers in California under-contribute to their pensions, and that system will come under pressure in the future. There are a ton of things that need to change, but none of this will happen quickly. The expenses being cut are often against the weakest public worker unions, or areas not influenced by public worker unions. Lobbying and campaign donations guide California.
    13 May 2012, 03:18 PM Reply Like
  • Valley Boy
    , contributor
    Comments (2201) | Send Message
     
    There should be some ongoing construction opportunities in this state aside from the controversial high- speed rail project and housing debacle. For instance, there might be some by converting the empty strip malls into multi- family housing if financing is available. There are wide swaths of urban California left that need to be reconstructed into efficient, livable areas. There are several commuter rail links and freeway gaps still to be constructed. There are some dams which are supposed to approaching the end of their estimated useful life. Those could be substituted with some run of river hydro projects eventually. There will lots of construction jobs when the next earthquake hits.
    13 May 2012, 03:19 PM Reply Like
  • Old Rick
    , contributor
    Comments (518) | Send Message
     
    "Schwarzenneger left the state with a 28B deficit"

     

    Horse Poo!! The California legislature (aka The gang that couldn't shoot straight) left CA with a NEAR $20B deficit in Arnie's last year in office.

     

    2009-2010 Budget Expenditures -- $206B
    2010-2011 Budget Expenditures -- $216B
    2011-2012 Budget Expenditures -- $214B
    source: http://1.usa.gov/KUYhBD

     

    Last budget deficit under Arnie was around $19B
    Current deficit under Moonbeam to be around $16B

     

    Hmmm, looks a lot like $3B "cuts" (smoke and mirrors?) to me.
    13 May 2012, 01:58 PM Reply Like
  • SanDiegoNonSurfer
    , contributor
    Comments (2826) | Send Message
     
    Old Rick, that 19B was an estimate, a projection that turned out to have been overly optimistic. Similar thing happened to Brown. Projected deficit was 9B but some of the cuts called for in the budget plan were blocked by the courts. Even if the courts (and the fed) hadn't blocked some cuts, deficits are always projections. The 2011 Legislature tried to pass a budget they claimed was balanced but it really was just smoke and mirrors. Brown rejected it and sent them back to do it over.
    13 May 2012, 02:16 PM Reply Like
  • Eightball
    , contributor
    Comments (134) | Send Message
     
    Great points from the pro-Californians here. Amazing state that, yes, isn't perfect, but is an economic juggernaut.
    13 May 2012, 06:24 PM Reply Like
  • chihawk
    , contributor
    Comments (2099) | Send Message
     
    Regrettably Eightball,
    All of these points can be looked at two ways. California is still a very large economy (juggernaut). But if you average out the government spending on the State and federal level it is losing steam. SD's 3% y over y ignores the low base from last year (hopefully the housing bottom). The fact is CA needs to get back to attracting new business to keep the juggernaut alive. Right now they have had little success in that direction for several years.
    13 May 2012, 07:23 PM Reply Like
  • SanDiegoNonSurfer
    , contributor
    Comments (2826) | Send Message
     
    chihawk, actually California's GSP is higher now than in 2007 -- just before the housing bubble burst. Since 2002, right before the start of the bubble, GSP is up 48%. GSP growth rate for your adopted state of Texas over these intervals is higher. But of course one *could* always say Texas was starting from a low base ;-)

     

    I think one could make a fair argument that Californians have benefited from (though are no longer receiving) extended unemployment benefits. However, if you want to make that point then I think you also need to look at the fact that Texas plugged its own yawning deficit gap using money from the feds: http://read.bi/w0afiz

     

    Things are often not what one expects based on stereotypes. Texas avoided the carnage of the housing boom and bust that ravaged the other sunbelt states largely because of stricter down payment requirements and other state financial regulations, including Texas state consumer protection rules. In other words, it was...wait for it...government regulation, imposed by the state of Texas, that helped Texans weather the financial crisis better than the other sunbelt states:
    http://on.wsj.com/JUiA2P
    http://bit.ly/Jafhcs

     

    Here's another fact about Texas that may not fit the stereotypes: the Houston ballet is one of the world's top ballets and has attracted what may be the world's greatest living ballet choreographer, British-born Christopher Bruce. Here are clips from are two of his glorious creations, performed by the gifted Houston Ballet:
    http://bit.ly/KDicHV
    http://bit.ly/IPonqn
    Keep up the good work, Texas.
    13 May 2012, 08:46 PM Reply Like
  • brachiosaurus
    , contributor
    Comments (237) | Send Message
     
    Symphony, ballet, and theater in Houston are world class. Thank you Mitchell, Jones, and menil families
    Also from 1948 to 1984 Texas was a swing state, voting like new York in every presidential election.
    13 May 2012, 10:01 PM Reply Like
  • chihawk
    , contributor
    Comments (2099) | Send Message
     
    SD,
    Again you tell only a small part of the story. The Texas homestead rule was longstanding. So it was no new regulation, it's more like Texas avoided modern financial engineering that CA tried to use for an expanding tax basis.

     

    The issue with CA should not be measured by GSP which is boosted heavily by government stimulus. Rather the unemployment rate and business creation are the better measurements. Here you will see the Texas unemployment rate has remained under national averages and the state has rapid expansion in key industries like oil and gas. Also trade (through NAFTA) has supported several industries. In short, the regulations have not been in the way and the real economy grows. Meanwhile, CA regulation continues to crowd out entrepreneurs in favor of government bureaucrats.

     

    I'm no believer in stereotypes SD, but clouding the issues to deny the truths makes little sense to me. CA must raise the revenue to pay for the government they created and they must be honest about the effect of this much government. This was true 18 years ago when I left and I feel the state still remains in denial to this day.

     

    One personal aside, when I left everyone I knew thought I was crazy to leave "paradise". Now, nearly all of those same people have left as well. "Paradise" did wilt once I had a comparison. The sad truth is the rich old people got the money and the best places to live in CA and the ambitious younger people left. To be totally crass, the older and richer I get the more I hate rich old people. Sad really.
    13 May 2012, 10:15 PM Reply Like
  • SanDiegoNonSurfer
    , contributor
    Comments (2826) | Send Message
     
    chihawk, sorry but your claims that California is living off of federal handouts and that it went around rigging up financial engineering schemes to create a tax basis sound bogus to me. Where's your proof?

     

    Texas had several legislative constraints that prevented it from overparticipating in the housing boom (I posted links). The Texas homesteading rule that prevents creditors from seizing one's home was not one of them, however.

     

    I'm glad your move worked out for you. You seem to have some personal animosity against whoever didn't applaud you at the time, which is unfortunate. I've visited Texas on several occasions. It's not somewhere I'd want to live but that doesn't prevent me from recognizing the good things that are there -- including a number of people with whom I've had worthwhile discussions.
    13 May 2012, 10:39 PM Reply Like
  • chihawk
    , contributor
    Comments (2099) | Send Message
     
    Get off your high horse SD.
    13 May 2012, 10:54 PM Reply Like
  • SanDiegoNonSurfer
    , contributor
    Comments (2826) | Send Message
     
    LOLLLLL...funny, considering the source. Very convincing reply, too...full of solid, substantiating evidence.
    13 May 2012, 10:56 PM Reply Like
  • TomasViewPoint
    , contributor
    Comments (4845) | Send Message
     
    San Diego

     

    All these Texas accomplishments are Bush's fault! LOL.
    13 May 2012, 11:08 PM Reply Like
  • SanDiegoNonSurfer
    , contributor
    Comments (2826) | Send Message
     
    Thomas, if you've ever been in the Houston-Dallas airport, it contains a worshipful, idealized bronze statue of President GHW Bush, jacket flying straight out behind as if held aloft by the winds of the future as they stream through his hair. Here in California, we have the John Wayne airport. The statue of The Duke doesn't look much like a prophet though, he just looks bemused: http://bit.ly/Kj3uX7
    13 May 2012, 11:20 PM Reply Like
  • Moon Kil Woong
    , contributor
    Comments (11158) | Send Message
     
    Agree with most comments here. 1) The Federal gov screws California 2) California screws cities and counties 3) All of them screw citizens 4) California overspends 5) Jerry Brown was a failed leader before and clearly fails this time too. He can't control Sacramento and its lobbyists since he's a product of special interest 6) Bureaucrats in California never intend to control spending or cut the deficit. It's their way of demanding more out of the taxpayer without saying so.
    13 May 2012, 10:22 PM Reply Like
  • SanDiegoNonSurfer
    , contributor
    Comments (2826) | Send Message
     
    Moon Kil Woong, interesting that the comments you selected to agree with are the ones consisting of nothing but unsubstantiated spewing.
    13 May 2012, 10:43 PM Reply Like
  • TomasViewPoint
    , contributor
    Comments (4845) | Send Message
     
    It just hit me that CA is TBTF. We need to break it up!!!!!

     

    It is too big and cannot be managed and they don't even know what is going on in the governors office.
    13 May 2012, 11:11 PM Reply Like
  • Herr Hansa
    , contributor
    Comments (3080) | Send Message
     
    http://bit.ly/Jb9otu

     

    A news search for $100k pensions and California makes an interesting read. When you consider that most in the military don't get this as a retirement, yet put their lives on the line, it should be no surprise people get pissed off about public worker pensions.

     

    Obviously other states have similar problems with their pension systems, including underfunding and declaring unrealistic gains that limit worker contributions. Probably one of the odder things in California that has made the news often, especially in San Diego, is the proliferation of 100% or higher pension payouts. Maybe if it was restricted to police and firefighter who actually face some danger in their work, there might be some public sympathy, but invariably we find paper pushers and desk jockeys getting these lavish pensions.

     

    If there is a budget shortfall in California, it is quite simple to see that the amount being spent annually is exceeding the amount collected in taxes and permits. According to the most recent census, there are 37691912 people living in California (2011 data). Rather than further gouge them to make up for the $16Billion "shortfall", how about cutting that out of public worker pay?
    13 May 2012, 11:11 PM Reply Like
  • NUNAY the KING
    , contributor
    Comments (241) | Send Message
     
    I believe that the government in Sacramento is under the impression that the more they pay their pensioners, the richer the state must be!
    14 May 2012, 04:38 AM Reply Like
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