When, and I mean something real … not like when the Republican’s forced Bill Clinton into a balanced budget, I’m pretty sure there were some shenanigans that made the budget look a lot more balanced than it was.
I don’t care if the law is constitutional or unconstitutional. If the latter, Congress can get it right when they re-write it.
What I do care about is people thinking of insufficient tax revenues. Why? I’m glad you asked. If the federal government taxed everyone in the country (rich, poor, middle class) at a 90% percent rate with no deductions and this brought in X tax revenues, Congress would spend 2 times X.
I agree. Sadly, the IRS already does this imputed interest on Zeroes. You haven’t earned the money, and don’t have access to it without selling, but they still tax you on it … every year.
Turns out paying for hookers and blow might be a good time, but even the First Son and Artist Extraordinaire shouldn’t have tried to deduct those as business expenses while not reporting his high profile job as a million dollar Ukrainian energy expert. Half a dozen tax fraud charges finally caught up to him, even if the powers that be managed to slow walk his case and get a few years past the statue of limitation.
I think that was in reference to California specifically. They did conjure up a rather large surplus a couple years ago - which was clearly an anomaly, but they went and spent it all anyways (and spent a lot of it on recurring spending no less, further compounding the current deficit.).
Most of it was spent on one time refunds, padding the reserve accounts (the rainy day fund was funded in the billions and beyond the statutory requirements, which is the opposite of “spent it all anyways”), and one-time items that could be clawed back. You make it sound like a shopping spree, which It wasn’t.
I meant around the year 2000, we had 2-3 years of budget surpluses. Some of it was due to inflated revenues from the dot.com bubble but still, it was more or less balanced until 2007. Then Bush, Obama, Trump and now Biden administrations with the blessing of Congress of various leanings all thought it was ok to run deficits to pay for crises.
Like Buffett said, we could solve this very simply. Any year there is more than 3% GDP deficit, all sitting members of Congress are not eligible for re-election. Although knowing them, they’d arrange to have semi-balanced budget on election years and catch up the next year.
You’d have to base it on lookback results, not projected budgets. A lot of the ongoing deficits (absent “crisis” emergency spending bills) are due to increased spending based on inflated revenue projections that never materialize. Not that they’ve tried recently, but it is rather easy to “balance” a budget by adding new tax revenue lines that are never actually implimented/collected.
Here is what analyst Dan Walters says about the spending in the article I posted on the 2024 election thread
Automatic spending reductions triggered by a slowing economy, such as lower mandatory levels of K-12 education support, would — on paper at least — cover some of the gap. But they do little to solve the political dilemma confronting Newsom and legislators as they face pressure to maintain school spending and billions of dollars in other commitments made when the state treasury seemed to be overflowing.
Also the paragraph you quoted from Dan Walters uses generic terms and doesn’t talk about any specific expenditures made during the two surplus years. Yes they probably increased the school budgets in the past, and yes, these are likely subject to automatic reductions. And sure there were “billions of dollars in other commitments”, but the surplus was enormous, and they didn’t squander it – lots of it went back to the taxpayers and lots of it went into the reserve fund.
Ah yes, “in theory”. In theory, most of the state’s spending can be cancelled or scaled back. But as a political reality, that theory isnt practical.
To that:
However, one-time appropriations, while not legally required to be long-term commitments, raise expectations that the state will continue to finance what it started.
Yet the article’s headline says the state faces a deficit that will require a major adjustment, which contradicts the claim of being “in its best position ever”.
I don’t know if “most” as I’m guessing some obligations are not optional. And the political reality is that they’re required to pass a balanced budget, so if they have to cut, they’ll cut. They’ve done it before and will do it again.
I don’t know what you’re reading, but that’s not what this means. That claim means that the state is in a better position now to manage a downturn than it had been at any point in the past to manage a downturn. If there was a downturn 20 years ago, the state would’ve been (or was?) in a whole lot more trouble because back then it did not have a $22B (or whatever it is) rainy day fund created specifically to handle downturns.
Than at any point in the past? I don’t believe it, but the phrase “to manage a downturn” is so nebulous that it could mean anything from protecting kids from their parents’ common sense to funding drug dens for San Francisco’s homeless army.
I am a taxpayer as are you. The only return I saw from the state was a $250 gift card. That was more than offset by tax increases, for example, a gasoline tax increase last January. And this January there will be a new income tax on utility bills.
There are also mandates such as a $20 per hour minimum wage for fast food workers and $25 for medical workers passed at the behest of the unions. Unless you believe in a free lunch, I will pay for those with increased prices.
Your comment is mostly off-topic. The conversation was about the CA state government budget surplus and how it was spent. The refunds that were issued (that wasn’t a gift card, it was a prepaid card) depended on AGI and household size IIRC.
What’s this now? If it’s what I think it is, then no, it’s not going to be this January. The CPUC is supposed to make a decision by next summer and it wouldn’t go into effect until 2025. But I think it is unconstitutional, because it’s basically a new tax, and if I’m not mistaken, new taxes require voter approval. Also the proposals out there are totally bonkers – my “income-based part” (vs “usage-based part”) of the bill would be like twice more than my current bill. This will create a huge incentive for high income people to go completely off grid as the payoff for solar plus battery plus a big F.U. to the whole plan in the form of a gas-powered generator for backup, will only be a few years. And that in turn will screw up the plan as high income people leave the utilities on the hook. This is way too stupid to actually get implemented in the way it is proposed.
Do not forget that this is California. The requirement to impose an income tax was written into AB 205 that was signed by the governor. the utilities commission is working out the details. Even the left-wing media are concerned.
I, like the video in your link, suspect that most of the legislature and the governor did not know about this provision. There is, however, another provision right next to it: “The bill would additionally require the PUC to ensure that the approved fixed charges do not unreasonably impair incentives for beneficial electrification and greenhouse gas reduction”. Adding a huge fixed charge of $70-$120 a month proposed by the utilities is an obvious incentive to go off-grid. The proposals also include reducing the per-kWh variable charge, which is an incentive to consume more electricity and only impairs greenhouse gas reduction. Like I said, waaaay too stupid.
It doesn’t sound that bad in principle. After all the infrastructure will need to be maintained and should be a cost that is relatively stable compared to generation costs, and that cost should also be stable vs. consumption levels.
Around here, the electricity bill (and gas bill) has a small fixed flat fee (which is not income-based) for infrastructure. What makes it ok is the flat fee is relatively small (about $20/month) in comparison to the bill (ours is around $75/month + AC in summer). But price per kWh is also nowhere near $0.47. In our current contract, the generation cost is $0.06/kWh.
If you kept that fee revenue-neutral but changed it to income-based, you’d have to make the fee $0 for a lot of people to increase the total bill by much more than $10/month so that would likely not be enough incentive for people to take action to get off the grid or to not care about their consumption.
What is out of whack about the CA proposed bill is that it sounds like the flat fee is gonna be for some on the same order as the consumption part. Unless they shrink the generation cost dramatically, I just don’t see how this whole scheme is not going to be generating way more revenues than before - which I did not read was the intended effect-.
Agreed. And I think if you based it on lookback results of the previous year, you’d see much more conservative budgets with prudent revenue projections taking into account trend in economic activity. Or even budgets that are designed to produce a surplus unless something major happens to derail them. That way, when a crisis hit, they’d be more resources to tap. Like a household emergency fund for unplanned expenses.
The proposed flat fees are much higher than the current consumption fees for the energy-efficient high-income households. My bill would be 50% higher even if I didn’t use any electricity, and my retired neighbors’ bill would be lower even if they doubled their consumption.
