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Thread: Propositions and Taxes?

  1. #1
    Cyburbian stroskey's avatar
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    Propositions and Taxes?

    I have read recently about propositions in California. I know it is where they take a direct vote to the citizens but why haven't I heard of such a thing where I live in the Midwest? The only item we typically vote on is politicians who then do all the law-making themselves. How did this difference come about that West has propositions and the rest of the country doesn't? Would it be hard to start that process for a state that doesn't have it?

    A second question is why does California have the highest taxes but the largest deficit? Is it just poor money management or is there something deeper?

  2. #2
    Cyburbian CJC's avatar
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    Initiative systems can be a part of any state constitution, if it was written that way. Most in the midwest were not. About half the states have some form of allowance for voter intiatives. California's wasn't used too much until the late 70's, when proposition 13 was placed on the ballot:

    http://en.wikipedia.org/wiki/Califor...ition_13_(1978)

    After that, it became clear how easy it was for special interests to place something confusing on the ballot, market the hell out of it, and amend the California constitution in the process - it wasn't just creating a law, it was amending the constitution. It helps even more if your ballot proposition actually does toss some money into the pockets of most voters, as prop 13 did (regardless of what else the proposition does). Since then, the proposition system has gone wild. Slowly, more and more power was taken out of the hands of the legislature and governor, with more and more power being placed in the hands of special interests (big businesses, big unions - especially big public unions, out of state organizations, etc). This was helped along by the fact that prop 13 requires a 2/3 vote on the budget by the legislature, the fact that the legislative districts are horribly gerrymandered (every district either elects crazy lefties or crazy righties - Democrats have held about 64% of the seats for a long time, but never a full 67%) and thus no sensible compromise is ever agreed upon to meet that 2/3rds level, and the fact that California is the only state where propositions have no sunset clause AND cannot be overturned by the legislature itself (every other state has at least one or the other).

    It's not uncommon for there to be multiple propositions on each ballot that are directly related to each other, as one group will qualify one for the ballot as soon as another qualifies theirs (it's too easy to get something on the ballot). A common tactic is to make a "no" vote really mean "yes" or vice versa, through the use of double negatives, etc.

    On your last two questions, it's primarily because of the intiative system itself. It's easy to convince voters to vote for the following type propositions:

    1. One that provides more services, but no way to pay for those services.
    2. One that mandates a certain amount of revenue (or percentage of revenue) go towards a specific item.
    3. One that decreases taxes or puts limits on taxes of some type.

    There has never been a propostion passed that has decreased spending or substantially increased taxes, to my knowledge. Most of the increase in "taxes" has come in the form of "fees" or in local taxes (local jurisdictions in some areas have been able to increase taxes). We generally don't have the highest taxes though. I'd be curious to see the methodology to anything proclaiming that - they typically don't look at actual property tax rates for all homeowners, but only rates that a new homeowner would have. (Prop 13 makes it so that some people may pay 1/20th or less of the published mill rate, depending on how long they've owned their home)

    For example, it's estimated that the "3 strikes law" passed as prop 184 in 1994 costs the state more than $10 billion per year more than would be spent without the law. However, there was never and will never be a way to pay for this, other than through the general fund. The money has to come from somewhere, which typically means borrowing or cutting other services.

    Basically, my belief is that direct democracy has no place in California. Period. Elimiation of the initiative system and a full re-write of the California constitution (with new legislative districts and a new way of reapportioning) are becoming increasingly more likely, IMO, though that won't happen before substantially more pain is endured. Expect Arnold to be threatening Obama with a debt default in order to secure some federal government dough. There's no way that the US Treasury will want the municipal bond debt market turmoil that would come from a CA default, so I would expect a bailout some time this summer or fall. Other states will yell and scream and then get their own bailouts. My hope is that the Obama administration will at least attach horrible strings to any money - enough that will keep the idea of a constituional convention on the front-burner AND enough to dissuade other states from taking money. I'm not optimistic that this will happen though.

    Recent article in The Economist that I basically agree with 100%:

    http://www.economist.com/world/unite...=hptextfeature

    Title - "California - The Ungovernable State"
    Last edited by CJC; 20 May 2009 at 5:43 PM.
    Two wrongs don't necessarily make a right, but three lefts do.

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    Cyburbian Raf's avatar
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    CJC pretty much hit the nail on the head. The voters of this state pretty much have tied the hands of the legislature, and not to mention the legislature panders to the interest groups for what money is left in the general fund. We vote for all these programs, but we can fund a lick of them or go off and bond for it and pay over time.
    follow me on the twitter @rcplans

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    Cyburbian stroskey's avatar
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    Thanks for the detailed responses. I didn't realize it was so bad over in the "Golden" state. I had a job offer in the San Francisco area and while I was out there I looked at some condos. Two years later the job I would have had is gone and the condo has gone down from 325K to 189K (still on the market). I think I made the right choice

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    Cyburbian Raf's avatar
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    Quote Originally posted by stroskey View post
    Thanks for the detailed responses. I didn't realize it was so bad over in the "Golden" state. I had a job offer in the San Francisco area and while I was out there I looked at some condos. Two years later the job I would have had is gone and the condo has gone down from 325K to 189K (still on the market). I think I made the right choice
    A condo in the bay area for 325K? Was this in Richmond or Vallejo? That is unheard of!
    follow me on the twitter @rcplans

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    Cyburbian stroskey's avatar
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    Quote Originally posted by CPSURaf View post
    A condo in the bay area for 325K? Was this in Richmond or Vallejo? That is unheard of!
    It's a bit outside the bay area More like the Santa Rosa area.

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    Gunfighter Mastiff's avatar
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    Measures 5 and 50 in Oregon hamstrung the state tax collection.

    When people ask me why their street isn't fixed, I ask them how they voted on these measures...
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    I'm standing right here Mr. Destiny
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  8. #8
    Cyburbian CJC's avatar
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    Quote Originally posted by stroskey View post
    Thanks for the detailed responses. I didn't realize it was so bad over in the "Golden" state. I had a job offer in the San Francisco area and while I was out there I looked at some condos. Two years later the job I would have had is gone and the condo has gone down from 325K to 189K (still on the market). I think I made the right choice
    Don't get me wrong - California, and the Bay Area in particular, are still great places to live, IMO. There are good things and bad things. You just have to be willing to put up with some of the bad, work some of the rest of the bad to your advantage, and soak up the good
    Two wrongs don't necessarily make a right, but three lefts do.

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