Category Archives: California

California Become 3rd Largest State with More People leaving than Migrating to the State

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California has beaten Illinois for net out-migration from the state. California has become one state that there are more people trying to get out than moving into it. So while California wants to protect illegal aliens and fight with the Federal government over sanctuary cities contrary to the Constitutional Supremacy Clause, according to a November report from the U.S Census Bureau, the Golden State has had 142,932 residents exit the state. This domestic out-migration has been the second largest outflow in the USA behind only New York and New Jersey. The net out-migration from California jumped up 11% compared to 2015.

Source: Armstrong Economics

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Proposal To Split California Into Three States Earns Spot On November Ballot

3 Californias? Billionaire’s Plan to Split California Into 3 Separate States Clears First Hurdle

California’s 168-year run as a single entity, hugging the continent’s edge for hundreds of miles and sprawling east across mountains and desert, could come to an end next year — as a controversial plan to split the Golden State into three new jurisdictions qualified Tuesday for the Nov. 6 ballot.

If a majority of voters who cast ballots agree, a long and contentious process would begin for three separate states to take the place of California, with one primarily centered around Los Angeles and the other two divvying up the counties to the north and south. Completion of the radical plan — far from certain, given its many hurdles at judicial, state and federal levels — would make history.

It would be the first division of an existing U.S. state since the creation of West Virginia in 1863.

“Three states will get us better infrastructure, better education and lower taxes,” Tim Draper, the Silicon Valley billionaire venture capitalist who sponsored the ballot measure, said in an email to The Times last summer when he formally submitted the proposal. “States will be more accountable to us and can cooperate and compete for citizens.”

Source: by John Myers | Los Angeles Times

California Officials Avoid ‘p-word’ When Selling Higher Taxes to Voters

Why are officials so unwilling to tell their voters (tax donkeys) that pension costs are the underlying factor in their requests for tax increases?

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While public and media attention to this week’s primary election focused – understandably so – on contests for governor, U.S. senator and a handful of congressional seats, there were other important issues on Californians’ ballots.

One, which received scant attention at best, was another flurry of local government and school tax and bond proposals.

The California Taxpayers Association counted 98 proposals to raise local taxes directly, or indirectly through issuance of bonds that would require higher property taxes to repay.

The proposed taxes on legal marijuana sales and other retail sales and “parcel taxes” on pieces of real estate were particularly noteworthy for how they were presented to voters.

Most followed the playbook that highly paid strategists peddle to local officials, advising them to promise improvements in popular services, such as police and fire protection and parks, and avoid any mention of the most important factor in deteriorating fiscal circumstances – the soaring cost of public employee pensions.

City, county and school district officials howl constantly, albeit mostly in private, that ever-increasing, mandatory payments to the California Public Employees Retirement System (CalPERS) and the California State Teachers Retirement System (CalSTRS) are driving some entities to the brink of insolvency.

However, those officials are just as consistently unwilling to tell their voters that pension costs are the basic underlying factor in their requests for tax increases.

Why?

Tying tax increases to pensions, rather than popular services, not only would make voters less likely to vote for them but make public employee unions less willing to pony up campaign funds to sell the tax increases to voters. It is, in effect, a conspiracy of silence.

This week’s local tax and bond measures are just a tuneup for what will likely be a much larger batch on the November ballot.

It’s a well-established axiom of California politics that low-turnout elections, such as a non-presidential primary in June, are not as friendly to tax proposals as higher-turnout general elections, such as the one in November. Primaries tend to draw older white voters who often shun taxes, while general elections have younger and more ethnically diverse electorates easily conditioned through social media to believing they might receive a few crumbs from voting in favor of socialist wealth transfer tax schemes.

As local officials make plans to place those proposals on the November ballot, a bill making its way through the Legislature could skew local tax politics even more.

Senate Bill 958 would allow one school district, Davis Unified, to exempt its own employees from paying the $620 per year parcel tax that its voters approved two years ago.

The Senate approved SB 958 on a 24-19 vote last month, sending it to the Assembly. It’s being carried by Sen. Bill Dodd, a Napa Democrat whose district includes Davis.

The bill’s rationale is that housing is so expensive in Davis that teachers and other school employees cannot afford to live there, and that exempting them from the parcel tax would, at least in theory, make housing more affordable.

However, if SB 958 becomes law, it would set a dangerous precedent. It doesn’t take much imagination to see local government and school unions throughout the state demanding similar exemptions from new taxes with the threat, explicit or implicit, that they would refuse to finance tax measure campaigns.

The very people who benefit most from additional taxes by receiving higher salaries and/or better fringe benefits thus would be able to avoid paying those taxes themselves.

Source: The Mercury News

 

California Primary: Voters Recall Democrat Josh Newman over Gas Tax Vote

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Photo Attribute: Rich Pedroncelli / Associated Press

Voters in California’s 29th State Senate district recalled freshman Democrat Josh Newman in Tuesdy’s California primary over his vote for Governor Jerry Brown’s 12-cent-per-gallon gas tax hike, replacing him with Republican Ling Ling Chang and definitively denying Democrats a super majority in the upper house.

Election results showed Newman being recalled by a margin of 59.5% to 40.5%, despite the fact that saving his seat was the top priority of California Democrats on Tuesday.

Newman was, of course, not the only state senator to vote for the gas tax hike. He was, however, the most vulnerable, and Republicans targeted him in an effort to undo the Democrats’ super majority.

That super majority no longer existed by the time of the recall election, thanks to several “#metoo” resignations of Democrats who had been accused of sexual harassment.

However, the recall effort pressed ahead, and is an early barometer of voter outrage at the gas tax, amidst higher prices at the pump.

Republicans have likely managed to place a repeal of the gas tax on the November ballot, hoping to tap into a statewide majority that favors repealing the tax, and to motivate conservative voters to turn out — a task that has been made even easier by the somewhat unexpected second-place finish of Republican businessman John Cox in the primary for governor.

Newman’s recall is a hopeful sign for Republicans, who will need strong statewide turnout to defend several vulnerable congressional seats. Conversely, it is a bitter disappointment for Democrats, who now fear that the highly-anticipated “blue wave” may not materialize in California after all.

Avoid the ‘blue wave’. It’s a trap.

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Source: by Joel B. Pollak | Breitbart

It’s Now Against The Law In California To Shower And Do Laundry On The Same Day

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A vintage postcard shows the brilliantly lit California State Capitol fountain at night.

Governor Jerry Brown is retiring but not before he passes a few draconian laws as parting gifts for California. Two bills were signed into law on Thursday of last week to “help California be better prepared for future droughts and the effects of climate change.”

The mandatory water conservation standards will be permanent, according to their wording, and not just for use in times of crisis. To make a long story short, now that these bills are law, it’s illegal to take a shower and do a load of laundry in the same day because you’ll exceed your “ration.”

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Here’s the wording of the new laws.

Senate Bill 606 establishes a “governing body” to oversee all water suppliers, both private and public and will require extensive paperwork from those utility companies.

Assembly Bill 1668 is where it gets personal.  This establishes limits on indoor water usage for every person in California and the amount allowed will decrease even further over the next 12 years.

The bill, until January 1, 2025, would establish 55 gallons per capita daily as the standard for indoor residential water use, beginning January 1, 2025, would establish the greater of 52.5 gallons per capita daily or a standard recommended by the department and the board as the standard for indoor residential water use, and beginning January 1, 2030, would establish the greater of 50 gallons per capita daily or a standard recommended by the department and the board as the standard for indoor residential water use. The bill would impose civil liability for a violation of an order or regulation issued pursuant to these provisions, as specified.

If you’re wondering how the government would know how much water your family is using, the utility providers will be obligated to rat you out of face massive fines. And they’re encouraged to spy in all sorts of creative ways. They “shall use satellite imagery, site visits, or other best available technology to develop an accurate estimate of landscaped areas.”

Some analysis

Now, if you’re wondering where I get my assertion that you can’t shower and do laundry on the same day, here’s some math:

  • An 8-minute shower uses about 17 gallons of water
  • A load of laundry uses about 40 gallons of water
  • A bathtub holds 80 to 100 gallons of water
  • A dishwasher uses 6 gallons of water

There are also standards to be established for outdoor use such as landscaping, caring for livestock, and gardening, but those numbers don’t seem to be available at this time. Maybe Californians just get to wait in suspense to see if their chickens are allowed to have water on the same day as their vegetables. Back when I lived in California, we were only “allowed” to water our gardens two times per week, which, in that heat, as you can imagine, didn’t lead to very productive gardens.

Farmers on a larger scale will have to jump through numerous hoops and create water management plans which must then be approved by the people in suits because obviously, they’ll know more about the needs of crops and livestock than the farmers will

Oh, and don’t worry, rich people. There will be “provisions for swimming pools, spas, and other water features.” So you can still have your pretty fountains and pools while the rest of the peons take 2 showers a week. One might wonder if ‘variances” will apply to the wealthy for their landscaping needs.

“The State Water Resources Control Board, which will oversee local agencies’ progress, will also consider possible “variances” for some districts that need additional allowances due to specific local circumstances.” (source)

Both Brown and his most-likely successor, Gavin Newsom, want to spend $17 billion to build a tunnel that will bring water from resource-rich Northern California down to bone-dry Southern California. This means, even the parts of California that DO have water will be restricted in its use.

What if you don’t comply?

If you don’t plan to comply it’s going to be way cheaper to move. Here are the fines Californians will be looking at – and it’s not a typo – these fines are PER DAY.

(1) If the violation occurs in a critically dry year immediately preceded by two or more consecutive below normal, dry, or critically dry years or during a period for which the Governor has issued a proclamation of a state of emergency under the California Emergency Services Act (Chapter 7 (commencing with Section 8550) of Division 1 of Title 2 of the Government Code) based on drought conditions, ten thousand dollars ($10,000) for each day in which the violation occurs.

(2) For all violations other than those described in paragraph (1), one thousand dollars ($1,000) for each day in which the violation occurs.

It’s important to note that your usage is only tracked if you have municipal water. If you have a well, at this point, you will probably be okay. Back when I lived there, the idea of metering private wells and billing the owners for use had been floated around, but most people resisted and it wasn’t enforced. If you truck your water in, you can also use as much as you need to.

For years it was illegal to use greywater systems in California, despite the epic droughts. Those regulations have been loosened, however, compliance is still extremely onerous. (Get the details here.) And rainwater catchment is not only legal, it’s encouraged. In fact, there’s a ballot on the table that is a “measure to allow rainwater capture systems to be installed without counting as new construction for the purposes of reassessing property taxes.”

Don’t think this only affects California

Not only are Californians fleeing the state in droves, but there are other ways these restrictive laws can affect the rest of us directly.

  • These stringent measures set a dangerous precedent for the rest of the country.
  • There could be a shortage of food coming out of California because there isn’t enough water to produce it.
  • The food we do get from there will cost a lot more.

It’s important to pay attention to stuff like this and not shrug it off because “I don’t live in California.” In an economy such as ours, we’re all interlinked. A draconian law that gains a footing in one part of the country is much easier to pass in other parts.

Source: ZeroHedge

Government Howls Over Proposed California Property Tax Break

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Some months ago (October-November, 2017) we wrote that the directors of the California Association of REALTORS® (CAR) had voted to support a signature drive with the intention of placing a CAR-sponsored initiative on the November 2018 California ballot.

The initiative, if passed, would allow “individuals 55 years of age and older to transfer their property tax basis to any home in the state, to purchase any price home, and to transfer their basis as many times as they wish.”

To appreciate the significance of this, it is necessary to have some idea of California’s property tax system. Property tax valuations are based on purchase price. You buy a house for $700,000, the assessor will value it at $700,000. After that, increases in property tax value are severely limited by formula. A home that was purchased for $500,000 five years ago could still be valued, for tax purposes, in the $500,000 range, even if its actual market value had increased to $700,000.

If you have lived in the same home for 15 — 20 years or more, you are probably enjoying relatively low property taxes because they are based on your low tax valuation. When contemplating a move, one of the things you have to think about is what your new property taxes might be, as they will be based on the purchase price of your new home. The effect of this has been to discourage people from moving down, e.g. from the 4-bedroom family home to a new 2-bedroom in a senior community, because the latter might result in significantly higher property taxes.

Californians sought to solve this problem in 1986 with the passage of Proposition 60. It allowed seniors to keep their property tax base assessment when they moved within the same county. However, in 1988, Proposition 90 was passed which allowed each individual county the option of participating in this tax base transfer by seniors who move from one county to another. This had great significance, because many retirees move to a different county (e.g. in the mountains, or desert) than the ones in which they had lived.

Only eleven of California’s 58 counties will allow a senior from another county to transfer his or her old property tax base to a newly-acquired home in that county. It is estimated that 75% of California homeowners over the age 55 are still living in the same home they lived in since the year 2000. That is not because they still love living there. It is because of the tax consequences.

Suppose that Mr. and Mrs. Baby Boomer bought a home in 2001 for $400,000. It was taxed on a value of $400,000 the first year. Its value for property tax purposes could only increase 2% per year. So now it might have a taxable value of $560,000. At a Proposition 13 tax rate of 1%, that is $5,600, even though the house might now have a market value of $900,000.

If Mr. and Mrs. Boomer sought to move down in size, they might buy a nice (not fantastic) two-bedroom which could cost them $700,000. Under current law their taxes would increase by $1,400 to $7,000.

However, if the CAR tax initiative were in effect, their tax value would be proportionately the same to actual value as with their previous home. In this case, it would be 62%, and their property tax would be $4,340. It would be $2,660 less than it would under current law.

No wonder the initiative garnered more than one million signatures to put it on the ballot (585,407 was the required number). It’s the best idea since sliced bread, right? Well, no; not in everyone’s eyes.

Ballot initiatives are accompanied by a report of the Legislative Analyst’s Office (LAO). In this case the LAO painted a bleak picture of the initiative’s impact on tax revenues. According to one briefing paper, the initiative would result in a $150 million loss for cities and counties and special districts, and another $150 million loss for school districts in the first years. Ultimately, it would grow to a total of $2 billion in losses.

It now appears that the LAO analysis has generated significant opposition to the initiative by city and county governments as well as teacher unions and firefighter associations.

CAR argues that the LAO analysis is flawed because it looks at the potential revenue lost because of the tax savings, but it doesn’t account for the revenue gained as a result of the senior’s home now having a new, increased tax base. It is a “static” analysis rather than a dynamic one.

Now, all of this could be sorted out through an extensive educational campaign; but that costs money, lots of money. It has been estimated that strong opposition could push the costs of backing the initiative into the $90 million range. Frankly, CAR doesn’t have that kind of money lying around.

At their recent meetings (Sacramento, May 2 — 5), CAR directors voted to pursue an alternative to the ballot initiative as well. It would be to seek support to have the legislature place the issue on the ballot in 2020. By seeking such legislative support, CAR would be able to free up resources to address other crucial issues in 2018. Whether this alternative will be possible won’t be known until late June. Stay tuned.

Source: by Bob Hunt | Realty Times

It’s Not What You Know But Who You’re Related To In The CA Dept of Tax and Fee Administration

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A California tax department where almost a third of managers are related to another employee is unwinding nepotistic chains of supervision six months after a state audit revealed a problematic concentration of personal relationships among staff.

California Department of Tax and Fee Administration Director Nicolas Maduros reported on Thursday that 141 of his department’s 484 managers has a familial or other close personal relationship to another employee.

A handful of those relationships appear to violate the department’s new anti-nepotism policy. Maduros said the department has corrective action plans for 17 of the managers whose relationships present conflicts for the organization.

“We are still working through this,” he told the State Personnel Board.

His department defines nepotism as “any relationship so personal that other CDTFA employees may reasonably perceive that one of the employees may be motivated to treat the other one more favorably than other employees. That includes, but is not limited to, any familial relationship established by blood, adoption, marriage, or registered domestic partnership.” It also includes roommates.

The State Personnel Board released an audit in November that found more than 800 of the 4,200 employees at the tax department has a familial relationship to someone else at the Board of Equalization.

The report drew attention to several instances in which job applicants appeared to receive a hiring advantage because they were related to someone at the department, and it questioned the hiring of a group of employees in December 2012 just before a law took effect that would have limited their potential retirement income.

Maduros’ presentation was intended to follow up on the audit’s findings.

“You all have stepped up. You have done a great job,” State Personnel Board member Richard Costigan told him.

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The nepotism audit was among the last in a series of critical reports on the Board of Equalization that resulted in the Legislature gutting the tax-collecting agency and creating the new California Department of Tax and Fee Administration.

Maduros released an anti-nepotism policy for the new department while the personnel audit was underway. The new policy forbids tax department employees from intervening to help anyone they know get a job there.

His latest report on nepotism disclosed the number of managers and supervisors who have relatives on staff. The department is addressing those conflicts first, and could later move to address close relationships among rank-and-file workers.

The department also is considering whether a job or promotion candidate has a relative on staff when it makes personnel decisions.

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“It’s going to take us time,” he said.

At least one investigation into the former Board of Equalization might still be underway.

Gov. Jerry Brown last year asked Attorney General Xavier Becerra to investigate the tax agency. Staff members from the Board of Equalization told The Bee that they were interviewed by Department of Justice agents.

Neither Brown nor Becerra has released a report. The Attorney General’s Office last month rejected a Public Records Act request from The Sacramento Bee seeking the document. The denial said the review was not complete.

It also said the document would not be releasable through the Public Records Act when it is complete. It said the documents would be exempt because they are “attorney-client privileged records.” The governor is the client.

Source: by Adam Ashton | The Sacramento Bee