California’s real debt $617 billion

Oct. 26, 2012

Katy Grimes: As California voters head out to vote on November 6, everyone should note that California’s real debt is not just the measly $16 billion that Gov. Jerry Brown and state Democrats bandy about; California’s real debt is $617 billion.

“California again trumped other states with a $617 billion debt,”  State Budget Solution reported in August. “California’s debt is more than twice the size of New York’s state debt, and New York has the second largest total debt burden in the nation.”

The reason for the disparity in numbers? “Unfunded public pension liabilities make up more than half of all state debt,”according to State Budget Solutions. The pension liabilities of the total debt represent the $2.8 trillion owed to public pension systems “as a result of years of skipped payments, borrowed funds, and inaccurate discount rate assumptions.”

States Highest Total State Debt (in thousands) States Lowest Total State Debt (in thousands)
California $617,620,709 Vermont $5,846,189
New York $300,066,114 North Dakota $6,116,162
Texas $286,999,196 South Dakota $6,536,680
Illinois $271,111,148 Wyoming $6,927,767
New Jersey $258,034,922 Nebraska $7,829,117

 

Given that California politicians historically push to be first at everything, I doubt that this is one of the contests California lawmakers had in mind.

But they should not gloss this over. Gov. Jerry Brown is pushing Proposition 30, a ballot measure which would raise California sales taxes to the highest in the nation, and an income tax increase for individuals making $250,000 or more in annual income.

An expensive power play

Should Prop. 30 pass, it is estimated to only bring in $6 billion in additional revenue. This seems a low amount of tax revenue given the anger Prop. 30 has incited in taxpayers. And given that the state debt is so huge, no one is really sure what Brown has in mind. I suspect he is doing it because he can.

It’s a ugly control game and power play over taxpayers, and something the entitlement classes gladly support. When people can vote to increase their own entitlements by taking from other hard working taxpayers, the game has gone awry and the wrong people are in charge.

Control over business

Proposition 39 is another taxing measure, which would require businesses headquartered out of the state to use the “single sales factor method,” in which their tax liability is based solely on their amount of sales in the state.

They would no longer be allowed to use the “three-factor method,” which bases tax liability on a combination of the sales, property and number of employees a business has in the state. That option was a tax-cut part of the budget deal in 2009 that otherwise increased taxes. This was negotiated between then-Gov. Arnold Schwarzenegger and the Legislature.

Now, Democrats want to renege on that deal too. At least they are consistent and can be counted on to renege on every deal with Republicans.

Prop. 39 is estimated to bring in $1 billion a year in additional tax revenue.

According to my calculations, if Props 30 and 39 pass, that is only another $7 to $9 billion of additional tax revenue to the state’s coffers. And that is only if everything goes according to the Democrat’s plan. Many believe that higher taxes will cause small businesses to close or move, and out-of-state businesses will rethink their California presences.

Playing with the numbers

The latest monthly jobs report was released by the Bureau of Labor Statistics the first week of October. The unemployment rate decreased to 7.8 percent in September, the BLS reported.

According to The Associated Press, “the Labor Department said weekly applications fell by 30,000 to the lowest level since February 2008. The four-week average, a less volatile measure, dropped by 11,500 to 364,000, a six-month low.

But the real reason for the massive drop in jobless claims is because the BLS claimed that it forgot to include California in their jobs report, according to the Business Insider.

Really? Does this ever really happen, or only in big election years for a favored incumbent?

 Just the facts ma’am

Despite the positive spin being used by the White House and compliant media, these are the facts: We created fewer jobs in in America during September than in August, and fewer jobs in August than in July. More than 600,000 manufacturing jobs have been lost in the U.S. just since President Obama took office.

The real unemployment rate would be closer to 11 percent if it weren’t for all of the people who have stopped looking for work and completely dropped out of the labor force. And the really real unemployment rate is a separate government number called the “U-6,” rarely reported, which provides an accurate look at how many people are really unemployed.

According to the U-6, California has a 20.3 percent real unemployment rate.

The results of the last four years are a tough pill to swallow: 23 million Americans are struggling to look for any work, nearly one in six are living in poverty, and 47 million people are dependent on food stamps to feed themselves and their families.

And California’s real debt is 10 times what Brown and the state Democrats report. Remember this at the polling booth.

15 comments

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  1. NTHEOC
    NTHEOC 26 October, 2012, 14:41

    The results of the last four years are a tough pill to swallow: 23 million Americans are struggling to look for any work, nearly one in six are living in poverty, and 47 million people are dependent on food stamps to feed themselves and their families.
    ———————————————————
    Just more proof we need to end the top 1% and their reign of terror over the people!!!!!! Vote yes on prop 30 and make these hogs pay up. If they don’t like it they can pack up and we can all be equal!!!!!!

    Reply this comment
  2. Kevin
    Kevin 26 October, 2012, 14:55

    @NTHEOC: That is exactly what Lenin and Marx would say! How did that work out for the 99% in Russia?

    Reply this comment
  3. us citizen
    us citizen 26 October, 2012, 15:41

    Vote NO on 30. There is no guarantee that the money will go to schools. And Brown is just using extortion methods to up his caufer. (sp?)

    And just because you make a lot of money, why should you have to support everyone else?

    Being equal……….that’s socialistic. Its never worked and it never will. I bet you are voting for BO too.

    Reply this comment
  4. John
    John 26 October, 2012, 15:43

    California’s real problem is illegals living off hard working taxpayers. I have seen first hand how they are doing it. They have babies and the husband and wife don’t get married. The the husband gets a cash paying job who then pays no taxes and does not have to declare income. How many times have you got into the grocery line only to see a non English speaking person in front of you pull out not only an ebt card but also wick checks. This is costing Californians billions and nobody wants to take a stand in our poorly run government. It is time to end the so called anchor baby program, Lock down our boarders that Senator Fienstien says we are doing(LIE), and do a sweep of our state make all illegals leave and those that want aid have proper documentation that they are here legally.

    Reply this comment
  5. Bob
    Bob 26 October, 2012, 15:51

    So NTHEOC, why not vote yes on 38?

    Reply this comment
  6. Queeg
    Queeg 26 October, 2012, 16:40

    You know the money goes for gov goodies…..stand with us….get in line early!!! best goodie selection before high noon.

    Reply this comment
  7. barb
    barb 26 October, 2012, 17:19

    Such a disaster! California will never recover until several scenarios occur and Ms. Grimes mentioned the largest, stinging problem. Unfunded pension liabilities. Until this problem is controlled, you re preaching to the choir!

    Reply this comment
  8. NTHEOC
    NTHEOC 26 October, 2012, 19:17

    Kevin says:
    October 26, 2012 at 2:55 pm
    @NTHEOC: That is exactly what Lenin and Marx would say! How did that work out for the 99% in Russia
    ===========================
    Hey kevin,
    How is capatalism working out for ya!!Capitalism works gloriously for the world’s ruling 2%. The rest of us get the Trickle Down effect. The vast majority of the world’s population reaps little or no benefit from a political system based on profiteering and turning people against each other in the mad search for money. Which is exactly whats happening now!! It is the lowest common denominator humans can reach. Works for the elite (so loved by the right) but doesn’t work for the people that really work for a living.Vote yes on 30 and end the 1% elite pigs!!!

    Reply this comment
  9. NTHEOC
    NTHEOC 26 October, 2012, 19:20

    barb says:
    October 26, 2012 at 5:19 pm
    Such a disaster! California will never recover until several scenarios occur and Ms. Grimes mentioned the largest, stinging problem. Unfunded pension liabilities. Until this problem is controlled, you re preaching to the choir!
    =====================
    Keep drinking the Koolaid barb!!!! I’m sure it’s the easiest way you can think of blaming the public pension system. Dummy!

    Reply this comment
  10. Rex the Wonder Dog!
    Rex the Wonder Dog! 26 October, 2012, 20:41

    LOL….NTHEOC, living in the Fantasyland of gov support 😉

    Reply this comment
  11. NTHEOC
    NTHEOC 26 October, 2012, 20:49

    Rex the Wonder Dog! says:
    October 26, 2012 at 8:41 pm
    LOL….NTHEOC, living in the Fantasyland of gov support
    ————————–
    What’s up Dogg!!!! I just knew I would get a warm response from You,,,,

    Reply this comment
  12. Bob
    Bob 26 October, 2012, 23:40

    I wonder if Governor Moonbeam can be bothered to read this

    Despite playing a key role in advancing climate change hysteria, the United Kingdom’s National Weather Service, known as the Met Office, quietly released a report last week conceding that so-called “global warming” actually stopped more than 15 years ago. The startling admission shows once again that United Nations theories and climate models are wildly inaccurate at best, experts say, meaning multi-trillion dollar schemes to deal with alleged human-caused “climate change” are at the very least severely misguided.

    http://lewrockwell.com/spl4/global-warming-stopped-15-years-ago.html

    Reply this comment
  13. ExPFCWintergreen
    ExPFCWintergreen 27 October, 2012, 00:13

    As I understand it the Dept. of Finance, Governor and the Legislature do not even take into account pension liabilities or bonded indebtedness when it calculates the state budget, does forecasting, etc. They merely list amounts totaling what the minimum payment on the credit card will be on these items for the fiscal year, and consider that to be the sum and substance of the buegt liabilities.

    If ture, what this is evidence of is massive intentional fraud. If this were a (hated) corporation, the officers would be subject to federal indictment, but these A**hats are entitled to perpetrate additional fraud upon the people of California by selling a bunch of lies about cuts to teachers, firefighters, and the like if we don’t feed their insatiable habits and vote for their tax increase initiatives.

    I for one would never ever give more money to a spendthrift, and will certainly not do so. What we need is a spendthrift trust, not a state budget. Further, the public schools need to be privatized, welfare eligibility needs to be cut to the federal minimums, etc.

    In the meantime vote NO on all tax increases, school bonds, transportation bonds…

    Reply this comment
  14. Ulysses Uhaul
    Ulysses Uhaul 27 October, 2012, 08:54

    Do you really care? Just PACK AND SHIP!

    Reply this comment
  15. Ulysses Uhaul
    Ulysses Uhaul 27 October, 2012, 21:37

    This is pretty deep stuff for CWD posters….

    Reply this comment

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