man, living here is painful..I NEVER bought Arnolds rap....not that means anything as I have to work here anyway.......industry leaving, taxes through the roof....


State of the Living Dead
January 12, 2008; Page A8
Arnold Schwarzenegger said in an address this week that California must end its "binge and purge" budget process -- his way of kicking off a binge worthy of Imperial Rome in its decadent late period. Yep: As his state reels from one of its recurrent fiscal crises, the Governor is making some headway on his "universal" health-care plan.

California is carrying a $14 billion budget deficit and Mr. Schwarzenegger is suggesting across-the-board spending cuts. So perhaps it's unwise to introduce a new government entitlement that costs north of $14.4 billion a year. But then, you have to understand the Kremlinology of liberal health-care reform: This effort has as much to do with politics as public policy.

Mr. Schwarzenegger devoted more than a year to health feuding with Sacramento. He strafed his own party for opposing tax increases. Meanwhile, many Democrats (and most labor unions) fought the Governor's agenda because the subsidies weren't extravagant enough. Desperate, the Governor brokered a last-minute bargain with Assembly Speaker Fabian Nunez in December.

Thus Mr. Schwarzenegger's ambitions didn't die -- but for now, maybe call them the living dead. The negotiators rushed to patch together a policy framework before 2007 ended, but they didn't have the votes to actually pay for it. A two-thirds majority in the state legislature is required for tax increases, and Mr. Schwarzenegger alienated the Republicans he needed. So if this scheme is to become reality, new taxes on tobacco, hospitals and business must be ratified by voters in a November ballot initiative.

Assuming that the bill reaches Mr. Schwarzenegger's desk at all. His plan may hit a wall in the state Senate, where President Pro Tem Don Perata, a Democrat, has qualms about the plan's cost in the midst of a budget meltdown. Apparently, Mr. Perata is one of the few adults in Sacramento.

Mr. Schwarzenegger and his collaborators insist their proposal is revenue neutral and requires no new spending after the start-up costs. But the numbers are flimsy. When the bill moved out of the Assembly hopper, the financing fine print remained unresolved and legislators were practically working off the back of an envelope. Mr. Perata is leery of potential consequences for the state's general fund.

With good reason -- these health plans are always more expensive than predicted. But that's what happens with governance via political ego. Having invested himself so fully in the congratulations for "doing something" about health care, Mr. Schwarzenegger wanted a plan, anything to claim victory. He's spinning it as "post-partisan" pragmatism. At least he's not calling it a "free market" solution, as did Mitt Romney after he pioneered a similar plan.

Like Massachusetts, Mr. Schwarzenegger's program is built around the "individual mandate," which requires that everyone acquire insurance or else pay penalties. While bumping up subsidies for the uninsured, California would also lay down more severe insurance regulations, instituting price controls and compelling companies to offer policies to all applicants without regard to age or health condition. Such mandates have all but devastated the insurance markets in every other state where they've been tried, but then all this is the triumph of politics over experience anyway.

In addition to hiking state levies on cigarettes to $1.75 a pack and imposing a 4% tax on hospital revenues, there are new taxes on business. Companies must either spend a certain amount on covering their employees or pay a tax sliding between 1% and 6.5%, depending on the size of the payroll. If Mr. Perata is watching out for his state's bottom line, such taxes may drive businesses to Nevada or Arizona -- or simply lead them to dump their health-care liabilities on the state and pay the 6.5%.

None of this is what California's cooling economy needs -- to say nothing of the damage that such a plan would do to the insurance markets, or the national precedent it would set. Mr. Perata supports comprehensive health reform but seems to be leaning toward prioritizing the budget deficit. If Mr. Schwarzenegger's stunt collapses only because of fiscal reality, that's good enough.

State of the Living Dead - WSJ.com

__________________
No individual can plan his own existence in their view.

So the state planners must arrogate to themselves the right to manipulate any sector of the economic system if the good of “society” or the “general welfare” is paramount.

Ipso- if the rights of the individual get in the way, the rights of the individual must be sublimated.

The Road to Serfdom
FA Hayek (interpretation)


Mortgage Backed Security survivor

As I recall those are about the same conditions Arnie faced when he was first elected. He ran on a reform platform, took office and the teachers union or something cut him off at the knees while CA kept spending. I haven't followed CA bonds for some time but even then most were no longer tied to revenue streams due to deficit spending. CA's a liberal state with a diversified population with ag as the major money gather, always has been, and it never seemed to make much difference who was governor.

Yea, he inherited many issues, chief among them a 9.1 billion dollar deficit. Davis didn't have the revenue the state has taken in over the last 4 years since,,,it was just starting to take off. The terminator has terminated the budget and aside from reforming state employment compensation laws, an early bone to the suits, he has in fact ruled like a spendthrift tax and spend lib. ala Bush.
Back to square one.

Revenue will now slow down, if we hit a recession which I think likely, servicing the bonds took something like 12% of the state revenues when he started, I'd say we are probably looking at 16-18%....Funding Calpers is a mess too. He is contractually obligated to do so, and the first wave of early civil service retirements will hit in 4 years......55, at 80%.........he never repealed what gray davis signed to buy the unions etc.and never really tried to privatize them, he was ran off........when he had the sppt. and the chance...for example, in Menlo Park, for example, the city's pension costs were about $260,000 in fiscal year 2003-04, but rose to about $1.75 million in 2005.... this state is fucked, plain and simple.

__________________
No individual can plan his own existence in their view.

So the state planners must arrogate to themselves the right to manipulate any sector of the economic system if the good of “society” or the “general welfare” is paramount.

Ipso- if the rights of the individual get in the way, the rights of the individual must be sublimated.

The Road to Serfdom
FA Hayek (interpretation)


Mortgage Backed Security survivor

There should never be a one sided debate, which is what the Imperator here (great name by the way), is trying to create... I like Arnold, and although I don't know a whole lot here, I think that he's got to raise revenues somehow, and if he didn't raise it on cigarettes and profits on sickness he would have had to raise it on single mothers and entrepreneurs, so please, Mr Imperator, if you think Arnolds ideas are so wrong, why not submit some of your own ideas for how to fix the problems of the day!!!!

Cuz if your looking at just the record, god himself, and every prophet 99.9% of humanity believes in has facts about them that could be used by imperators such as yourself which could be used in a hollywood self-fulfilling realization film to convince the masses to buy coke instead of pepsi...

Cigarette taxes are one of the easy, dumb targets for taxation. Lower income people are the largest group of smokers, can least afford the tax, cigarette smoking is on a decline which will reduce the tax revenue stream and eventually require replacement.

CA's is tied to agriculture, still the largest revenue producer in the state and being somewhat crippled by the illegal immigration emotion targeting employers and crop disasters. Most of CA's post-ww2 growth through the '70s was derived from aerospace and military defense spending with real estate development keeping pace and then becoming its own force. Like the rest of the US a majority of the heavy industry including multiple domestic car manufacturing facilities and their suppliers had left by the '80s. I left CA in '86, fortunately right before the housing market collapsed in '87, and it took almost ten-years for that market to recover. CA has a very dominant union presence concentrated in civil services which has pretty well controlled CA politics and spending for decades and I don't see that scenario changing.

Tax wise, CA is stuck between a rock and a hard place with declining industry and escalating social/civil requirements. Like many states and the federal government civil service salaries and benefits have shot up like a rocket due to union practices of making demands based on 'like sized agencies' rather than private sector compensation and benefits and will eventually break many municipalities. While I'm sure this isn't the news you're looking for, with the eminent collapse of many bond insurers due to the housing bubble scam CA's bond debt service expense is going to increase without any new issues. I guess the only question is how much general obligation debt CA can float to keep its nose above water before the market says no more. Then what?

I don't have anything to add to that....except, we are racing to retirement, at which time we will bail.....my co. pays their employees a 12% premuim above salary when they come to work in santa clara......nuff said...

__________________
No individual can plan his own existence in their view.

So the state planners must arrogate to themselves the right to manipulate any sector of the economic system if the good of “society” or the “general welfare” is paramount.

Ipso- if the rights of the individual get in the way, the rights of the individual must be sublimated.

The Road to Serfdom
FA Hayek (interpretation)


Mortgage Backed Security survivor

Unfortunately you're tucked in behind baby boomers who are the majority of high-end civil service drones and civil servants in charge will attempt to bleed you as a worker and your company dry to maintain their exploited standard of living. I don't know what CA's position is, but OR's civil service retirement fund is forecast for insolvency due to retirement benefit demand by 2015. Efforts are being made to sever the union relationships (dual work forces in many counties) and the state move to universal health care was prompted in part by the drain of take your breath away health care costs for retired and to-be retired civil servants. Combine those circumstances with greatly reduced federal revenue sharing to pursue US foreign policy and we're in for some interesting financial times.

as to calpers, check this out for Ca's way of blind siding itself....

my emphasis on what I consider key points-

Pension cost pileup tied to change in rules

By Troy Anderson, Staff Writer Changes in a national accounting
guideline a decade ago helped set the stage for California's ballooning
pension liabilities by obscuring the long-term costs of providing the
richest benefits in the nation, a former CalPERS consultant says. Under
changes by the Governmental Accounting Standards Board, pension funds
can amortize the cost of retroactive benefit increases over 30 years and
public employee unions can negotiate to defer salary increases in favor
of better pension benefits.


But the shifts meant officials often were unaware of the full costs of
their decisions, Citrus Heights accountant Marcia Fritz wrote in a Sept.
30 letter to the board. That's because complex actuarial calculations
are simplified to a percentage increase in the government's contribution
to pensions for only the first few years. "Within a year after the
rules took effect (in 1998), public employee unions successfully lobbied
for changes in funding policies that enabled them to receive increased
pension benefits at younger retirement ages for their members and mask
the costs to decision-makers," wrote Fritz, who has worked with
Assemblyman Keith Richman on pension reform proposals.

Fritz's letter follows a recent Daily News review that found Los Angeles
area taxpayers are on the hook for at least an extra $110 billion in the
years to come to pay for retiree pensions, health care and workers'
compensation benefits. National pension expert Stephen D'Arcy, a
professor of finance at the University of Illinois, agreed that stronger
accounting standards could have given elected officials a more accurate
picture of the impact of pension enhancements.

"The key problem really is that legislators are interested in gaining
political support, and one way to do that is to be generous with pension
benefits," D'Arcy said. "It's possible to defer recognition of the
costs of pension benefits to later generations, and unless taxpayers pay
attention to this - making it a priority in the voting process - then it
will continue, regardless of the accounting standards applied."

Several years after the accounting rule changes, board members of the
state's largest pension fund - the 1.4 million-member California Public
Employees Retirement System - made recommendations and state, county and city elected officials soon agreed to allow employees to retire at younger ages with more pay, Richman said. The pension enhancements were retroactive and employees were allowed to calculate their pensions using their single highest salary year, Richman said, adding that California is the only state in the nation that does this.

"CalPERS went around the state and told cities and counties that
increasing pension benefits was not going to cost them any additional
money, and they were just wrong" said Richman, a Granada Hills
Republican who plans to run for state treasurer next year. "As a result,
the Legislative Analyst says pension benefits in California are 25
percent higher than the next highest state." Rob Feckner, president of
CalPERS' board of administration, denied Richman's charge. "That is a
stunning distortion of the truth," he said. "We told each and every
public agency, in their customized reports, on how every single proposed
benefit change would affect their immediate and long-term costs."

In her letter, Fritz noted that the changes coincided with a surge in
pension income from stock investments. And she also noted that by using
a methodology change allowed under 1999 legislation, the state actually
saved $547 million in the first two years after the benefit increases.
But, she said, "When market values later decreased, the board again
changed its methodology. Each change reduced contributions and
increased insolvency in pension funds administered by CalPERS."

Gerard C. Carney, spokesman for the independent, nonprofit GASB, which
sets financial accounting standards for government agencies, said the
guidelines that took effect in 1998 gave pension boards across the
nation ample opportunity to assess their unfunded liabilities. The
guidelines just set new standards on how governments should disclose
their pension obligations, allowing more flexibility in how pension
increases were accounted for, he said. "Ultimately, officials make the
decisions on how to rationally and fully fund the pensions," Carney
said. "We only set the financial reporting standards that, if followed,
disclose the results of those decisions."

Robert Walton, assistant executive officer for governmental affairs at
the California Public Employees Retirement System, said Fritz's
assertion that the guideline changes created an atmosphere for pension
abuse is "ludicrous." Walton denied CalPERS underestimated the costs of
enhanced benefits. CalPERS has an unfunded liability of $22.3 billion.
"CalPERS did not go around the state and tell employers that benefit
improvements wouldn't cost anything," Walton said. "We just didn't do
it. Anytime a public employer asks for a benefit increase, we are
required by law to give them the cost of that increase."


But James F. Antonio, the retired state auditor of Missouri who served
as chairman of the accounting standards board from 1984 to 1995, said he
objected to the rule change a decade ago because it removed "virtually
all of those constraints on funding approaches" and failed the "fiscal
responsibility" test.

Antonio said the guideline didn't "go far enough in requiring
recognition of pension costs. It had to do with the period of which we
were amortizing the unfunded liabilities."
Mary Bradley, a member of the League of California Cities' Pension
Reform Task Force and Sunnyvale finance director, agreed with Fritz that
public employee unions persuaded elected officials to use the pension
surpluses in the late 1990s to grant benefit increases.

Bradley said elected officials may have made poor decisions because the
pension fund data some were presented was two years old and didn't
reflect the debts that had begun to mount after the stock market began
to drop. In her letter, Fritz encouraged the accounting standards board
to revise its rule and recommend government agencies fully amortize the
costs of pension enhancements while employees are working. "I would not
say that elected officials are uninformed, but I can sure say that on
complicated issues such as pension reform, they take staff
recommendations," said P. Anthony Thomas, a pension reform lobbyist for
the 478-member League of California Cities. "And the majority of the
time staff are taking recommendations from actuaries."



[Employee_relations] Ballooning pension costs unchecked

__________________
No individual can plan his own existence in their view.

So the state planners must arrogate to themselves the right to manipulate any sector of the economic system if the good of “society” or the “general welfare” is paramount.

Ipso- if the rights of the individual get in the way, the rights of the individual must be sublimated.

The Road to Serfdom
FA Hayek (interpretation)


Mortgage Backed Security survivor

Retroactive pension benefits disguised by amortization practices. Another instance of elected officials buying votes with public money. And Ford/GM thought they had union problems.

Yup.....an example...my next door neighbor, works for cal osha ...he is 50, he can retire at 75% at 55 ( oh and did I mention excellent health benefits too, that’s a whole other issue)......hes loving it of course, he’ll contract himself out to supplement his income, if there any industries left here that can use him, and his pension will keep him as you said ensconced in his bloated lifestyle.....so, cal osha, will pay for 10 years in effect 1 and 3/4's salaries to fill his position....we have discussed this, he sees no issue with it of course, which I find , well, intellectually dishonest when I point out the sheer folly of such a prgm.

__________________
No individual can plan his own existence in their view.

So the state planners must arrogate to themselves the right to manipulate any sector of the economic system if the good of “society” or the “general welfare” is paramount.

Ipso- if the rights of the individual get in the way, the rights of the individual must be sublimated.

The Road to Serfdom
FA Hayek (interpretation)


Mortgage Backed Security survivor

Any society that feels it can indefinitely sustain those costs even in good economic times is fooling itself. I'm sure your neighbor is no different than civil service drones I've met, nice guy but figures the public owes him whatever his union can get out of them and damm the moral and fiscal implications.

exactly.....

__________________
No individual can plan his own existence in their view.

So the state planners must arrogate to themselves the right to manipulate any sector of the economic system if the good of “society” or the “general welfare” is paramount.

Ipso- if the rights of the individual get in the way, the rights of the individual must be sublimated.

The Road to Serfdom
FA Hayek (interpretation)


Mortgage Backed Security survivor

Austrians must really be proud of their little Schwarzenegger!

__________________

It all comes down to this on election day: Are you a racist, or do you look down on spastics?