Unfailed: California's budget outlook best in years...

[TigerVols]

The Golden State continues to surge under the guidance of Jerry Brown and a Democratic supermajority.

http://www.latimes.com/local/political/la-me-pc-california-budget-improving-20131120,0,3021563.story#axzz2lEWWdP9r

 

[LongTimeListener]

Yeah, but wait until all the seven-figure earners leave! They're on their way out, I can just feel it.

 

[User 11148]

Yeah, but wait until all the seven-figure earners leave! They're on their way out, I can just feel it.

Wait until the stock market doesn't crank out 14% returns, then see how those public pension numbers look.

 

[LongTimeListener]

I'm more concerned about the big-earning weight-pullers. They were leaving if the tax increased passed.

I think Phil Mickelson is already gone. I miss him.

 

[The Big Ragu]

Yeah, but wait until all the seven-figure earners leave! They're on their way out, I can just feel it.

Wait until the stock market doesn't crank out 14% returns, then see how those public pension numbers look.

That is a big part of it. They are projecting surpluses into the future predicated on asset bubbles in the housing and stock markets continuing to drive up prices. That isn't likely, since it is all a mirage. It's just another example of the Federal Reserve having inflated away some debt.

They'd be better off patting themselves on the back for raising taxes, cutting some spending and reaping a windfall this year on capital gains on an irrational stock market and housing market -- and not making projections that are likely going to look silly (although no one will remember).

This isn't just a Cali story. Texas and Florida are both projecting surpluses this year and most other states have reduced their budget deficits by a lot. It was all done by necessity, of course. They reached their debt limits and had to cut spending with defaults looming.

 

[TigerVols]

So, the fact that California is looking at a reserve of $2.4 billion by the end of the fiscal year gets crickets from the board's Googleconomists?

 

[poindexter]

So, the fact that California is looking at a reserve of $2.4 billion by the end of the fiscal year gets crickets from the board's Googleconomists?

Calpers is square?

 

[The Big Ragu]

So, the fact that California is looking at a reserve of $2.4 billion by the end of the fiscal year gets crickets from the board's Googleconomists?

Not sure who you wanted to respond or what you want them to say. But you are really mistaken. California doesn't have reserves. It has debt well in excess of $100 billion (not including unfunded pension and retiree health care benefits).

50 to 100 more years of the stock market going up by 20 + percent each year, and the state can run enough surpluses to pay off its debt -- as long as it doesn't increase its spending levels.

 

[Batman]

So, the fact that California is looking at a reserve of $2.4 billion by the end of the fiscal year gets crickets from the board's Googleconomists?

The big question is, will they actually use that surplus to pay some of their debt and take care of obligations? Or will they say, "Hey, we have a surplus, let's find a way to spend it!"
If the former, good for them. They've learned from their mistakes. Maybe they can dig out of their financial hole some day.
If the latter, which based on past history I have a feeling will be the case, then we'll go through this whole mess again in short order.

 

[LongTimeListener]

We also have the pending high-speed rail project, which is a disastrous boondoggle that is going to make Boston's Big Dig look well-planned and well-executed. That's a $100 billion bomb that's going to drop on the next generation.

I would never vote for a neo-Nazi tax-cutter. A neo-Nazi tax-cutter who has a plan to kill high-speed rail? I might consider it.

But it is clear that things are looking up, and it is also clear that the political success was achieved by drop-kicking the state GOP out of the grown-ups' room. (And, of note, the thread title is a reference to the long-ago and since-locked thread asking if California was "America's first failed state.")

 

[Mizzougrad96]

I ask this as a California native who hasn't lived there regularly in 20 years, did I hear correctly that the high-speed rail isn't supposed to be running until 2029?

It's amazing how long they've been talking about doing this and how long it supposedly will take to finish.

 

[LongTimeListener]

The "completion date" -- when it's supposed to be all done -- moved from 2020 to 2033. I think the first rider is scheduled for something like 2022, between Fresno and Madera, two towns where nobody could possibly want to go.

It's a gem.

 

[Mizzougrad96]

I'm sure there is a huge demand to go from Fresno to Madera. :D

It seems like I've been hearing about high-speed rails from SF to LA and LA to Vegas since I was a teenager.

 

[Morris816]

Surpluses don't just generate the "let's spend the money on this project" response. They also generate the "cut taxes" response.

From some people, they generate both responses.

Nobody ever seems to say "pay off outstanding debts," whether it's at the federal, state or local level.

 

[Armchair_QB]

This thread title belongs in the "World's Tallest Midget" category.

 

[Mizzougrad96]

Until they do something about the pensions being paid out, I can't imagine California being in decent shape financially.

 

[qtlaw]

Pensions are never going to be "paid out" because they are a continuing liability and based upon whether the reserves in hand plus the anticipated future revenues cover the pension obligations; that's the whole foundation of pensions (I used to be a building trades pension fund attorney).

The question is whether the actuaries have made a "conservative" model or "aggressive" model in what future revenues are needed. "Fully funded", which is the key issue, means whether the fund can pay out all current and future liabilities or not, based on the future revenues (new payments and returns on investments).

A surplus is a big thing here in the Golden State, it just shows that if you are willing to pay for things (taxes), you do not have to deficit spend. As a taxpayer, I'm proud that we have taken steps to get our house in order. In our local schools, the monies are having an impact.

 

[LongTimeListener]

YES! YES! YES!

High-speed rail financing struck down by judge, project in jeopardy

http://www.mercurynews.com/california-high-speed-rail/ci_24598004/high-speed-rail-financing-struck-down-by-judge

 

[old_tony]

This thread title belongs in the "World's Tallest Midget" category.

Yeah, because the midget in question can't stand tall enough to see the $640 Billion unfunded liabilities in the pension program. They're in great shape, alright. Just a few more "responsible tax increases" from that brave supermajority and things will be peachy keen.

 

[poindexter]

Great news: Judge halts funding of the bullet train

http://www.latimes.com/local/lanow/la-me-ln-judge-blocks-state-funding-bullet-train-20131125,0,725258.story#axzz2liPHjj7I