California Budget -- From A Surplus Of $100 Billion To A $35-Billion Deficit -- In One Year -- May 12, 2023

Locator: 44635CA.  

California budget: May revision, an additional $10 billion deficit; link here.

• 2022 - 2023 May Revision: 
• $300.6 billion
• surplus: approximately $100 billion
  
• 2023, January budget:
• $297 billion
• deficit: $22.5 billion
• budgetary reserves: $35.6 billion
• 2023, May, revision:
• $306.5 billion
• deficit has grown to $31.5 billion
• budgetary reserves: $37.3 billion
• Safety Net Reserve:
• apparently about $1 billion
• state will withdraw $450 million which represents about half the funds available within that reserve
• budget does not forecast a recession, but if there is a recession --
• revenues could decrease by $40 billion in 2023 - 2024 alone -- due to losses in personal income tax

Note:

Chief among the end-of-April Senate Democrat recommendations was an increase in taxes for the top 0.2 percent of corporations, which the lawmakers said could reverse “the federal Trump Tax cuts for Big Corporations at the state level.” [One needs to ask the question why the governor did not go along with a tax increase on the top 0.2 percent of corporations. Even Warren Buffett has said corporations pay too little in taxes.]

The senators suggested using that revenue to cut taxes for small businesses, renters, lower-income Californians and union workers, as well as implementing spending increases of about $1 billion each for schools, child care and homelessness reductions.

Newsom’s office immediately came out against the proposal, stressing that the governor “cannot support the new tax increases and massive ongoing spending proposed by the Senate,” according to the San Francisco Chronicle. [Sounds like a classic conservative, an endangered species in California, especially in the Bay area.]

Question: why would the governor not go along with an increased tax on the top 0.2 percent of corporations? One word: Tesla. Left California for Texas due to taxes.

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Update

Google doesn't link Fox sites. The URL: https://www.foxnews.com/politics/gavin-newsoms-reparations-experiment-backfires-2024-speculation-swirls.

Fascinating article. The most interesting story coming out of California right now has to be the "budget."

The "budget" was interesting without the "reparations" angle, but now the budget story has become very, very interesting on so many levels.

Most importantly, we now have numbers.

California budget surplus in 2022: $100 billion.

California budget deficit in 2023: $35 billion.

California budget in 2024 time frame: $350 billion.

Cost of reparations: $700 billion. 

Bottom line: reparations, spread out over twenty years, no interest, doable. It's like winning the lottery.

$700 billion / 20 = $35 billion.

Suggestion: if California were to go through with this, to include but not limited to several requirements:

• total outlay capped; first-come, first-served, based on date of application.
• payout over a minimum of 20 years; no interest; no offset for inflation;
• payouts do not begin until at least ten years after bond funding approved; 
• proceeds can go to heirs of deceased applicant beneficiaries; 
  
• fully taxed at California's max income bracket, regardless of size of payout; 
• alternatively, a new tax bracket for this special item at twice the current max bracket
  
• applications: 
• with a $1,000 fee, non-refundable -- to cover the cost of verifying one's history; 
• application: genealogy documentation; at minimum, an on-line family site such as Ancestry.com; and a copy of a genetic report from a company such as 23andMe.
  
• false applications: felony; significant penalty; preparer will share in penalty;
• all applications posted on website with appropriate security redactions;
• FBI, IRS has access to all applications with no redactions
  
• once approved, recipient must post bond to cover benefits if at some future date, application is found to be inaccurate or fraudulent denying benefits once they started flowing
  
• no government employee (included elected positions) eligible for any payout (they wrote the bill); 
  
• to be funded by special bond; a ballot initiative; not a question of whether reparations are paid, but the funding mechanism and the guidelines for payout.
• applicants must send in proof of purchase of one Hasbro Monopoly game and proof that they have donated that said game to charity
  

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Other Links

"Top One Percent." Old source. Not sure to what extent it remains accurate.

One year ago, April 15, 2022, Los Angeles Times.