Holy Deficit, Batman! It's Worse Than I Thought -- Absolutely Nothing To Do With the Bakken -- California's Deficit

Jerry Brown blames Jerry Brown: it's worse than I thought!

Updates

May 13, 2012: The state's deficit balloonw from $9 billion to $16 billion and they're still talking about a bullet train that leads to nowhere. Headline story in LA Times -- the bullet train would require spending of $3.5 million/day --

The bullet train track through the Central Valley would cost $6 billion and have to be completed by September 2017, or else potentially lose some of its federal funding. It would mean spending as much as $3.5 million every calendar day, holidays and weekends included — the fastest rate of transportation construction known in U.S. history, according to industry and academic experts.

Original Post

The great California exodus (see comments; link added after original post).

California's deficit balloons from $9 billion to $16 billion.

Meredith Whitney noted this last month.

For a running commentary of states in trouble, click here.

Now back to the linked story published today:

Gov. Jerry Brown announced on Saturday that the state's deficit has ballooned to $16 billion, a huge increase over his $9.2-billion estimate in January.

The bigger deficit is a significant setback for California, which has struggled to turn the page on a devastating budget crisis. Brown, who announced the deficit on YouTube, is expected to outline his full budget proposal on Monday in Sacramento.

"This means we will have to go much further, and make cuts far greater, than I asked for at the beginning of the year," Brown said in the video.

Lawmakers and others were hoping that a rebounding economy would help the state avoid steep cuts to social services. But revenue in April, the most important month of the year for income taxes, fell far short of expectations, leading to a shortfall of at least $3 billion in the current fiscal year.

The state has also spent $2.1 billion more than expected, according to the controller, further worsening California's financial health.

The article did not mention anything about the "bullet train to nowhere."

Brown's solution: increase taxes. No specifics on cutting spending. My hunch: even if the folks in California vote to increase taxes in the November election, California will have periods of running out of cash to pay its bills. It takes awhile for tax increases to actually show up as increased revenue, and of course, some folks affected by increased taxes will take steps to minimize them.

From Bloomberg:

Brown this week submitted more than 1.5 million signatures to place the tax measure on the ballot. It would temporarily raise the state sales tax, already the highest in the U.S., to 7.5 percent from 7.25 percent. It would also boost rates on income starting at $250,000. The 10.3 percent levy on those making $1 million or more would rise to 13.3 percent, the most of any state.

I wonder how many A-list Hollywood actors, with multiple homes around the world, claim California as their state of residence?

Income tax, property tax, and now the highest sales tax in the US. Incredible. I wonder when California will push for increased off-shore drilling?