CA Budget Crisis & Pending Cuts Thread

[Jet Gorgon]

time to raise taxes for the super rich, they need to contribute more socially

Ya, all those libbie movie stars. Face it, Arnie's hands are tied with a State Congress stuffed full of socialists. San Francisco streets are crammed with homeless beggars, the tax rate is already so high many folks have fled to neighbouring states (other than Oregon). My cousin in San Diego says they are ready to pull up stakes, and they have a relatively prosperous design biz. Getting angry at the tax hikes when they see so many collecting freebies off their hard work and the govt frittering away their $. And they are libbies! But, they are very unhappy with their representatives.

[barbaro]

Jet, asked about the California exodus that's taking place. There are many articles throughout the Californian and US media, but here is one I found:

It seems Texas is a top spot for Californians relocating. I remember 20 years ago, when the Southern Californians came up to Western Washington state. They weren't wanted (no offense). They would change their license plates on their cars right away, because of the vandalism.

Article here: Note the blog comments at the bottome.

Credit Crunch, Credit, Politics, California Housing Crash, The Economy, Real Estate January 14th, 2009

Traffic, pollution, high unemployment, still expensive housing, overpopulation, high taxes, are some of the reasons why so many Californians are choosing to move to other States. Here are some articles showing how bad things are in the Golden State and how much worse they will get.
LA Times:

Thousands of Californians are moving out amid a sour economy and a housing meltdown
The number of people leaving California for another state outstripped the number moving in from another state during the year ending on July 1, 2008. California lost a net total of 144,000 people during that period — more than any other state, according to census estimates. That is about equal to the population of Syracuse, N.Y.
The state with the next-highest net loss through migration between states was New York, which lost just over 126,000 residents.

A losing streak that long hasn’t happened in California since the recession of the early 1990s, when departures outstripped arrivals from other states by 362,000 in 1994 alone.
In part because of the boom in population in other Western states, California could lose a congressional seat for the first time in its history.

The OC Register:

Texas top spot for O.C. relocations.
United says it made 1,749 outbound moves from the O.C. last year vs. 1,473 vans bringing us new neighbors. That means 54% of the business was outbound from here vs. 57% in 2007 and 59% in 2006. By region …
* The top places they’re coming from to call O.C. home in 2007 were: Texas (106 moves), elsewhere in California (102), Virginia (83), Illinois (87), and Florida (79).
* Where did our old neighbors go via United? Texas (199), Washington state (163), elsewhere in California (123), Oregon (80) and Ohio (75).

The Dallas Morning News

In bad economy, many Californians packing up and leaving
They said, “Go west,” but many Californians are going north, south and east.
The natural beauty along Highway 1 in California couldn’t offset a sour economy, a housing bust and job losses as reasons to pack up and leave the state the last four years, the California Department of Finance reports.
For the fourth consecutive year, more residents left the Golden State than moved there from other states, according to a December report by the California Department of Finance.
The outflow – last seen during the economic and social struggles of the 1990s – started when it became too expensive for most people to buy homes in the state.
The trend underscores the state’s sour economy, as layoffs continue, the fiscal strain on government grows and home values decline.
While more births and rising international immigration boosted California’s population 1.16 percent in 2007, the state continued its steady stream of domestic outmigration – the movement of residents of one state to others.

24 Responses to “People are leaving California by the thousands”

1. Shelley Says:
   May 15th, 2009 at 10:24 pm We are leaving California and moving to North Carolina. California has literally gone down as a pathetic, incompetent government who has completely screwed the citizens and have wasted billions of our hard earned dollars. I will NOT pay more taxes. They are the highest in the nation as it is. I want these politicians to suffer like we have. For one, stop providing charge cards and gas cards to these corrupt so called officials. They are the “OFFICIAL TAX PAYER ENEMY” - STOP THE FLOW OF ILLEGAL IMMIGRANTS, AND STOP GIVING illegals FREE “EVERYTHING” FROM THE TAX PAYER.This would be a good start. IT IS THE IDIOT POLITICIANS WHO HAS DROVE THIS NICE STATE TO THE GROUND AND WE CAN BLAME NO ONE BUT THE VOTERS WHO VOTED THEM IN. A sad sad time for California. My family is leaving and going to beautiful North Carolina where the cost of living is affordable. We will take our tax dollars to a state that knows what they are doing. How do the corrupt politicians sleep at night?
2. Alex Says:
   May 28th, 2009 at 6:44 pm California is going to face a rough 10 years as the illegal aliens drain the states revenues…
3. Tom Tudo Says:
   June 11th, 2009 at 6:20 pm Shelley, if you think that government will do the right thing in north carolina you are in for a rude awakening.
   This is a US problem. Not a california problem and as long as people stay as ignorant, while whining, sniveling and crying for even more socialism, there won’t be any change. Unless you consider the trillions that the present occupant of the white house has spent, change.
4. Wes Says:
   June 13th, 2009 at 5:43 am Just got done having a couple Cali people tell me of their smog nazi adventures. Want a coolant temperature gauge in your car? Too bad, remove it. Amazing. I guess a gauge must increase emissions or something….
   Yet just another item in the long list of why California fails as a state. The people who actually pay the bills there are wising up and leaving. Godspeed, wise people.
5. Brad K. Says:
   June 15th, 2009 at 4:06 pm I agree with Shelly. I am moving to Arkansas. I have purchased a piece of property on a lake. Thats right on a lake. Unless your are independantly wealthy try that in California.
   The most important thing is I and NOT gay, or anti military, or on welfare or and athiest.
   I am hetrosexutal, maried, a christisn, have famlily (2 sons) in the military and a full time job. I dont fit in here in California any more. Even though I was born here.
   California panders to the later. Just pick up any news paper. The abnormal is recognized by our legislaters as the normal. This is no longer my state. I am ashamed of what it has become. My choice to move away.
6. Ed Voll Says:
   June 19th, 2009 at 8:48 pm Some people may be waiting to get their retirement pension and then leave. The housing collapse took a lot of people by surprise and they now have no money to get that great house elsewhere. When the government finally laysoff the highly paid “workers” then the real exodus will happen. Wish I had left 3 years ago.

Link & Entire: People are leaving California by the thousands : National Bubble

[barbaro]

More comments by California residents:

1. Andrew Says:
   June 23rd, 2009 at 1:47 am I’m trying to get out. I’m so over getting milked for everything in this state, and the fact that I can’t walk outside w/o tripping over the homeless has me at my witts end. I’m praying my relo to North Carolina comes through. If It doesn’t I don’t know what I’m going to do.
2. Timothy Says:
   July 1st, 2009 at 10:31 pm I have lived in Texas for the past 10 years where there is no state income tax. I was born and raised in California, and had plans to move back until I checked the exorbitant state income tax rate.
   FORGET ABOUT IT. I will move to a state with a lower income tax rate and drive or fly to California on weekends.
   Voters of California, good luck; you are getting what you voted for. Too much spending, too much taxing=TAXPAYERS will leave to states that have more fiscal responsibility.
3. rico Says:
   July 16th, 2009 at 12:28 am I want to leave CA as well. I’m thining about Houston TX. How’s the job market look over there. I’m in the medical field. What are the nice areas in houston to raise a family. Is the smog that bad there. is it as bad as LA?
4. Cold Calling Says:
   July 25th, 2009 at 4:18 am My fiance and I moved to CA 2-1/2 years ago because we were both tired of living in AZ (ugly and unfriendly). We moved to Orange County, CA and loved it right from the start.
   Fast-forward two years. We are frequently bored - AZ had surprisingly more to do and better restaurants & bars - and we’re appalled at the amount of money we’ve spent (wasted?) to live here. What’s more, housing in CA still has a long way to drop now that the foreclosures have finally started in earnest, so we refuse to buy here for at least a year, if not two. However, we can’t rent here either because all of the landlords are in foreclosure. We moved last year for that reason, and are forced to move again this year for the same reason.
   As a result, instead of moving to house #3 in OC, we’re moving to Texas. We’ve visited there several times as we have lots of friends in San Antonio, and will be moving there permanently next week. Not only is the housing situation ridiculous here, but so are the taxes, fees, and endless other costs. Oh yeah and I am an avid gun owner, and had to beg, scrape, and grovel to the county sheriff to get a CCW permit here. Not so in Texas.
   While we have a nice group of friends in CA, there is plenty of attitude that we can do without, and that we’ve never experienced in TX. In addition, San Antonio reminds us of the good points of Phoenix with all the fun, unique bars & restaurants, something that no longer exists in Orange County thanks to the horrendous, exorbitant costs of owning a business here. CA has killed the entrepreneurial spirit, leaving nothing but corporate chain restaurants.
   This successful business owner is taking his tax dollars and jobs elsewhere. As much as I love the scenery and our friends in CA, in the end it’s just not worth it. CA’s greedy politicians will suffer now that they’re driving all of the producers out. They’ll be left with nothing but looters and illegals who contribute NOTHING to society and just take, take, take.
5. Tony Clifton Says:
   August 31st, 2009 at 3:36 am If I moved out of state I would try Reno or Aurora Co. I could not take a total oven state like AZ or a humid hot state like Texas. I wish I took my dads advice an moved in with him at his home in Riverside CA. It was paid for and low property tax still under Prop 13 to boot, a whopping $440 a year.
   One of the reasons we have such high property taxs is the way schools waste money and have a hog troth for public workers like teachers and others.
   I know a local public high school during the boom years added a extra vice pricipal so now they have 3 of them! My school where I went only had 1. ALso we have a head of sports at this school, when I went to school the one vice took care of that but at this school this boob shows up in a benz making nearly 90 grand a year and just makes up sporting times and events.
   We have the most over paid teachers in the country and near the bottom of scores!
   Also this state spends 37 grand a year to keep a person in prison but in FL they only spend 18 grand. THis state is ran by idoits, Aronold our great gov could order the real ID act an that would more or less cut off jobs to the illegals but he wont do it.
   If moved I would go to Reno NV, not too hot an low humidty and also no state income taxs and low property taxs too.
   I had a buddy moved to Poutea OK. He had a company here did well but hated the crowds, traffic and high taxs, so he sold his home for 800 grand an got a place with 51 arces instead, he says its lousy in summer there but for 3 months he will run air to be out of OC, I dont blame him!
6. Alex de Large Says:
   October 19th, 2009 at 1:11 pm If California wasn’t a donor state(75 cents returned for every dollar paid in federal tax) there wouldn’t be a financial crisis here in the Golden State. But we have to support all the conservative(IE - deadbeat) states of American.
7. Conservative Californian Says:
   October 26th, 2009 at 2:39 pm My wife and I are looking to move out of CA to TX. In CA I feel like a criminal because I am a gun owner, hunter, straight, white, used to be republican now Libertarian, Christian, home owner and I hold a Bachelor’s degree in Finance. I am sick of the “head in the sand” attitude of Ca. People are more interested in what happened on their favorite reality TV show than what is going on in D.C. I am one of the few who survived college as a conservative. Taxes are ridiculous in Ca, it definitely doesn’t feel like a community here, everybody hates eachother, the public schools are nothing but gov’t propaganda. The South is where I want to be when things really get bad. They have their heads on straight. They won’t beg the gov’t for handouts, they take pride in themselves and their heritage. Unlike the “yankee states.” See y’all in Texas!
8. 42 year old Los Angeles native Says:
   November 14th, 2009 at 9:25 pm I was born in Los Angeles in 1967 and have lived near Pasadena, CA for the last 30 years. California is a wonderful place in all areas except for its very high cost of living. State income tax for most people is close to 10% - sales tax in Los Angeles county is 9.75% - automobile registration and insurance is about as expensive as it gets - we also have the highest tax on gasoline. I’m sure there are more costly examples but I’ll end it here. Bottom line is is that it’s just becoming too great a financial burden to live here. Since my family and friends live here, I just don’t know what to do.
   Our state government is a complete failure!
9. Joanna Says:
   November 18th, 2009 at 5:32 pm My husband and I are having trouble with the education system. He is an engineer. I am a former nurse and now I am working for myself. Our son who has a high g.p.a and couldn’t get into any good colleges. He went to private schools until his last 2 years in highschool which we could barely afford, but we had to because the schools were filled with gangbangers and illegals. The last two years of his highschool, we moved out of LA. Illegals are taking spots in those same colleges my son applied to and are at the same time getting many of their books free through government grants, scholarships (for what I don’t know with the low gpa’s). My son knows of two kids he went to school with who are not here legally who are doing just that. They are studying Chicano studies. What is that anyways? Basically, the message my husband and I along with our son are getting is this: You have to pay for all these illegals to have a fantastic life here with numerous benefits and you get taxed to death while recieving nothing in return whatsoever, not even respect. We see the whole country actually moving in that direction. Since my husband has a Phd in engineering and he is only 34, we have offers to migrate to Australia, New Zealand, Singapore and Canada. We are going to check these places out for a better life with more opportunities for all citizens regardless of ethnicity.
10. Janis Williams Says:
    November 25th, 2009 at 4:35 am My husband and I are leaving CA. I grew up in Ca it was once a beautiful state. Always, seemed very expensive to live in the Bay Area. However, it was once worth it! It is disturbing and often almost surreal to me, what has happened to CA. People are rude and selfish. Taxes are shocking. Crime is everywhere. I voted but my votes never seem to help. We are moving far away from here. I have no desire ever to visit CA.
11. David Says:
    November 27th, 2009 at 9:03 pm My wife and I are both engineers. We left California in late 2006 and moved to Houston. We were paying $1900/month for a two bedroom apartment. We now own a very nice (3400 square foot) house for $1432/month (total - includes all taxes, insurance, etc). We were paying over $800/month in income taxes, we now pay $0 (Texas has no state income tax). Our quality of life has improved dramatically. If you have good skills, you can make the same in Texas but live way better because the cost of living is very low here. You also don’t have the congestion.
12. Mandy Says:
    December 2nd, 2009 at 8:35 am I used to live in L.A. and about a 1 1/2 ago had my apartment burglarized. The state is definitely headed in the wrong direction. That is why I now live in Texas.
13. edson Says:
    December 10th, 2009 at 5:23 pm I’m on the verge of accepting a job in Austin TX. I’m originally from North Carolina and have lived in the Bay Area (SF) for 10 years. The kooky thing is that my wife and I make pretty good money, as in a six figure income. The only problem is that even at the time of this writing 2 years after the initial housing bubble burst, homes in reasonably nice areas- aka-not gunshot ally- are still pushing the half million dollar mark. We waited for a few years for the bubble to delfate. But it seems that people are now buying at the “lower” end again, meaning 500k is probably about as low as its going to go.
    With that, I fail to see things getting better here. In fact, if anything it seems that the supply of gentrification grows more and more over time as more yuppie parents from San Francisco with newborns move into our East Bay neighborhood since they seem to think 500k is cheap for a home. Things just seem to be getting worse and worse. The escalation in the cost of living is out of control here and defies all economic logic and even the biggest recession in US history failed to tame it.
    As I mentioned, we make pretty good money. We’re probably in the upper 10-15% of the earning wage bracket. yet buying a house would nearly wipe out our monthly income. That seems ridiculous. The job I am interviewing with is probably going to pay a lot less. But you know what? Its totally worth it because in Austin at least we can afford to buy a house and live like normal middle class people.
    The nasty side of California’s problems is that our problems spill into other states in the form of people like me and a lot of others here who swamp their cities, drive up their real estate prices, and in effect create an echo-effect with our out of state savings and in some cases portable equity. We’ve been saving for years and have rented. But just the same, we’re only going to be contributing to the problem I already see in Austin, which is its gentrification as more people with outside money move in. In a selfish way that’s why I want to move sooner then later before it too becomes ruined like the Bay Area did. Its happening everywhere. The city I grew up in NC is now also inundated with people from New York, Massachusetts, New Jersey, and of course California. A lot of locals can’t afford to live in town anymore because they got priced out by outsiders.
    I think this problem isn’t going to go away anytime soon. We’re slowly pricing ourselves out of the middle class if nothing else due to the carefully engineered, manipulated mortgage and housing industry, which has more or less been kept in a semi-permanent state of boom and bust. Someday the piper will have to get paid because eventually the middle class will no longer have the money to support the US economy with their mortgage dollars simply because EVERYWHERE will be expensive.

Link & Entire: People are leaving California by the thousands : National Bubble

[sabang]

Tony Clifton Says

Alex de Large Says

Conservative Californian Says

[Jet Gorgon]

^ What's wrong with those names? SB, you are going batty.
Thanks for those posts, MM. It figures. All the hard-working sane folks are leaving CA.

[barbaro]

Los Angeles is broke.

2nd largest city.

http://www.reuters.com/article/newsO...61D2BP20100214
L.A. budget crisis threatens jobs, credit rating
Feb 14, 03:16 PM EST

By Steve Gorman



LOS ANGELES (Reuters) - Los Angeles, the second-largest city in the United States, is confronting a mounting budget deficit that threatens to force thousands of job cuts, deplete its fiscal reserve and further damage its credit rating.

The $212 million budget shortfall, projected to more than double next year, is attributed mainly to plunging tax revenue blamed on the region's sagging economy, falling property values and a 15 percent jobless rate -- one of the highest of any major U.S. city.

"The last time we saw this kind of drop in revenue was the Great Depression," Miguel Santana, the city's chief financial officer, told Reuters. "It speaks to how severe this budget crisis is."

Mayor Antonio Villaraigosa and other senior city officials spoke on Friday with executives at Fitch Ratings, seeking to forestall a further diminution of Los Angeles' credit-worthiness.

The city was downgraded late last year from a top rating of "AAA" to "AA-" as serious budget problems loomed.

One major concern for holders of municipal debt is a plan by the city to use most of its $230 million reserve to close its current budget shortfall, Santana said.

He added the city plans to replenish its reserve in part by leasing out its parking garages to private operators. But analysts said sharp revenue declines leave Los Angeles with relatively few options.

"It's pretty simple. They are going to need to make some serious spending cuts," said Ian Carroll of Standard & Poor's.

LAYOFFS OR PAY CUTS?

The crisis has put Villaraigosa, a former labor activist, squarely at odds with unions that represent 98 percent of L.A.'s municipal work force, which in turn accounts for 80 percent of the city budget.

Villaraigosa said last week he will propose the elimination of 1,200 to 2,000 city government jobs in next year's budget, on top of 1,000 positions the mayor last week ordered to be cut over the next few months.

He hopes to achieve some cuts through attrition and by moving some workers into vacant positions in self-supporting agencies, such as the Department of Water and Power. But Villaraigosa has acknowledged that as many as 350 employees will likely be terminated in the initial round of cuts.

He also has suggested that large layoffs could be avoided if the unions were willing to accept pay cuts.

"If everybody took a 5 percent cut, it would add $150 million to the general fund," the mayor said on Thursday at an event sponsored by the local business leaders.

Union officials have bristled at those proposals.

"We find it ironic that at the same time Congress is debating a jobs bill, the mayor of one of the largest cities in the country is talking about laying off 3,000 people," said Barbara Maynard, spokeswoman for the Coalition of L.A. City Unions. "The last thing Los Angeles or any city needs is to have more people on the unemployment line."

She said before considering layoffs and pay cuts, the city should seek reductions from some of the $2.5 billion it pays for work performed by private contractors.

Private law firms that bill the city for hundreds of dollars an hour, for example, "can certainly afford a pay cut more than a worker who is making $15 an hour," she said.

Unions are still smarting from concessions recently negotiated with the city to pare back most of a $400 million shortfall in the municipal pension system caused by losses on Wall Street. A key part of that deal was an early retirement package that moved 2,400 employees off the city payroll.

For now, Villaraigosa has said he intends to keep police officers and firefighters exempt from the job cuts he is seeking, even though police and fire protection accounts for 75 percent of the city's general fund.

In the end he vowed to do what was necessary to get the city's financial house in order.

"There is no scenario, none, while I am mayor of Los Angeles where this city will ever be bankrupt," he said. "I can guarantee that."

(Additional reporting by Jim Christie in San Francisco; Editing by Gary Hill and Maureen Bavdek)

[barbaro]

I want to give credit to a poster that stated some California public workers can retire at 50 and get $100,000+ per year.

I denied this, but it's actually true for some. This segment, reveals details of how the unions are affecting CA negatively. And most union workers today are: public employees.

Very interesting, because there are details:

[barbaro]

Please watch this. Unbelievable.

[Boon Mee]

they will have no choice but raising tax eventually, and the only people that can be targeted are those who benefited the most in the last 20 years, time to face the bills and stop dodging it

The super rich have no idea what to do with their money, they buy stupid inefficient things (like private jet, and expensive low mileage cars), and all their savings are fueling silly speculation and bubbles. Time to invest in real public assets.

Wrong

From the WSJ:

Far from offering new ideas to reform the welfare state or compete better against rising global powers, Democrats have with rare exception tried to impose the same spending, tax and regulatory agenda that failed in the 1960s, 1970s and 1990s.

Medicare is heading toward bankruptcy, yet Mr. Obama's response is to make the entire health-care system like Medicare.

Otto von Bismarck's entitlement state for cradle to grave financial security is no longer affordable. The model has reached the limit of its ability to tax private income and still allow enough economic growth to finance its transfer payments

You can see this in bankrupt Greece, where government spends 52% of GDP; or in California and New York, where the government-employee unions have pushed tax rates to punishing levels and the states still can't pay their bills. Americans can see that this is where Mr. Obama's agenda is also taking Washington, and this is why they are rejecting it.

Read the whole thing

[crippen]

California has nearly 4 times the population of Greece,to give some idea of the size of the problem.

[Jet Gorgon]

Please watch this. Unbelievable.

Thanks for these clips, Milkie. Haven't watched his show before. Pretty amazing crap the officials are doing -- I wanted to punch that guy for his stupid comments on bacon.

[barbaro]

^ I feel the same way, Jet. I remember the guy that was arrested in Georgia for making and selling - biscuits.

And a county in Arizona has outlawed "dancing outside," whatever that means.

Anyway, here is what cities (municipalities) in California and all across the country are starting to do. File for Chapter 9 bankruptcy.

Muni Threat: Cities Weigh Chapter 9

BY IANTHE JEANNE DUGAN AND KRIS MAHER

Just days after becoming controller of financially strapped Harrisburg, Pa., in January, Daniel Miller began uttering an obscure term that baffled most people who had never heard it and chilled those who had: Chapter 9.


The seldom-used part of U.S. bankruptcy law gives municipalities protection from creditors while developing a plan to pay off debts. Created in the wake of the Great Depression, Chapter 9 is widely considered a last resort and filings under it are more taboo than other parts of bankruptcy code because of the resulting uncertainty for everyone from municipal employees to bondholders.

Link & Entire: More Cities Weigh Chapter 9 Filings - WSJ.com

[Jet Gorgon]

^ What are the details? Can they tell the unions to FO?

[barbaro]

^ What are the details? Can they tell the unions to FO?

I'd like to give more details, Jet, but we'll have to look for other sources.

As for unions in California, I assume there are many legal hurdles to tell the unions to FO.

Many city and state employees. CA will have to make changes.

[Jet Gorgon]

^I imagine that it is illegal to fire them or cut their pensions.

[slackula]

^I imagine that it is illegal to fire them or cut their pensions.

Sounds like maybe they can:

Municipalities' ability to re-write collective bargaining agreements are much easier than in a corporate Chapter 11 bankruptcy[7][8]and can trump state labor protections[9] allowing cities to renegotiate unsustainable pension or other benefits packages negotiated in flush times.[10]
"Congress did not extend the same projection [sic] to public employees that it did to those working in the private sector under Chapter 11 bankruptcy rules."

Chapter 9, Title 11, United States Code - Wikipedia, the free encyclopedia

[Jet Gorgon]

^ Cool, but that's for municipalities, Slack. Could Arnie do it for the whole state? I hear Christie cut a $billion from spending last week in NJ.

[Jet Gorgon]

Please watch this. Unbelievable.

I also found this. Interesting, too. Beggar! Watched it all in one clip but here's 1/6.

[Muadib]

[attaboy]

California Highway Patrol disability claims:





:11 PM Jun. 3, 2005
Case Study: The Sacramento Bee Tracks a Tip
More in this series

By Rick Rodriguez (and colleagues)


It was the kind of tip many reporters would find overwhelming: sources within the California Highway Patrol alleging that high-ranking officers were making end-of-career injury claims to maximize their post-retirement income. They called it "Chief's Disease."

For Sacramento Bee reporters John Hill and Dorothy Korber, however, it was a reward for months of meticulous work covering the state's broken pension system.

Confirming the tip proved difficult. First, the state's retirement system refused to disclose any information about retirees except the amount of their pension.

Undeterred, John and Dorothy came at it from another angle. Such medical pensions tend to be preceded by workers' compensation claims, which the reporters learned were indeed considered public records. The Bee paid for an index of workers' compensation cases involving CHP workers and began to build a database.

Still, many of the chiefs and captains mentioned by the original tipsters were missing. After weeks of queries by the reporters, the workers' comp board acknowledged an error and released a second CD, containing more than 7,000 pages of additional case names.


That complete database allowed the reporters to request and examine worker comp case files at offices around the state. Those cases contained some of the most telling details and, in some cases, also the proof that workers had been granted a medical pension, and thus tax-free income. It also enabled the statistical analysis that proved the story's central allegation, that 80 percent of CHP chiefs made injury claims within two years of retiring.

An interesting twist occurred when the CHP's top administrator, Commissoner D.O. "Spike" Helmick, in early interviews, told Bee reporters that he would not come down with "Chief's Disease" when he retired. But an anonymous tipster said he was planning to do so and Helmick's spokesman confirmed that tip. The reporters examined Helmick's workers' comp files and discovered he had claimed injuries from falling out of his office chair and exercising on a stationary bicycle, among other things.

After that story ran, the CHP's general counsel sent a letter to Bee Executive Editor Rick Rodriguez alleging that the workers' comp board had erred in releasing medical reports and other "confidential" information. The letter said that Helmick was considering legal action and threatened that several of the subjects of the then-upcoming report on "Chief's Disease" would "not hesitate to resort to litigation" if the investigation were published. The story ran the following day and to date no legal action has been taken. Helmick withdrew his special pension application.

The Bee's investigation spurred a number of reforms.

Just a week after "Chief's Disease" ran in The Bee, Gov. Arnold Schwarzenegger appointed a new chief of the California Highway Patrol. Citing our findings, Commissioner Mike Brown vowed to investigate the CHP's high rate of disability claims and medical pensions.

He reactivated the patrol's fraud unit and ordered the review of every single disability pension since 2000. The fraud unit's first arrest came in January and the second came two weeks ago.

Meanwhile, a state senator announced that she would convene a legislative hearing to probe the issue.

And the California Public Employees' Retirement System voted to sponsor legislation that would close the legal loopholes that permit phony disability claims.

Results were also quick after The Bee continued its investigation with a story about the propensity for worker's comp judges to file their own workers' comp claims. A week and a half after that story ran, the head of the California workers' comp system launched a review of judicial ethics. She also stepped up her department's efforts to ensure that the judges' cases weren't heard by their colleagues in their own judicial districts.

This series won a Polk award for state reporting earlier this year.


Poynter Online - Case Study: <i>The Sacramento Bee</i> Tracks a Tip

[Jet Gorgon]

^It's really sad that people cheat instead of striving to do a better job and earn merit thatway.

[barbaro]

In one California town you will be billed $300 USD for calling 911. This, will only be the beginning. Pretty bad.

The Fat Lady Has Sung

By THOMAS L. FRIEDMAN Published: February 20, 2010
A small news item from Tracy, Calif., caught my eye last week. Local station CBS 13 reported: “Tracy residents will now have to pay every time they call 911 for a medical emergency. But there are a couple of options. Residents can pay a $48 voluntary fee for the year, which allows them to call 911 as many times as necessary. Or there’s the option of not signing up for the annual fee. Instead they will be charged $300 if they make a call for help.”

Link & Entire: Op-Ed Columnist - The Fat Lady Has Sung - NYTimes.com

[barbaro]

California seems to be sinking farther into the Abyss.

The top is from Mish, the bottom, a person's anecdote.

I don't know where the bottom is for California - and I don't want to know how deep bottom will be, or when it hit bottom.

http://globaleconomicanalysis.blogsp...ders-ious.html

California Delays Payments, Ponders IOUs Again, Demands 80% of Income Tax Paid Before It's Even Earned

Tactics in California to shore up its municipal bond rating are quite humorous. Supposedly, by delaying payments to schools, California can boost confidence in its bonds.

Please consider this sure-fire confidence booster: California Passes Bill to Guard Cash as Bond Delayed.


California’s Assembly passed a bill allowing it to delay payments to programs including schools to avoid running out of cash, a move aimed at boosting confidence in bonds sold by the most-populous U.S. state.

The passage comes a day after Treasurer Bill Lockyer told lawmakers the bill was needed to send a signal to investors that California is taking steps to adequately manage its cash as it faces budget deficits through June 2011. Lockyer postponed a $2 billion sale that was initially scheduled for next week.

Assemblywoman Noreen Evans, the Democrat who chairs the budget committee, said the bill was needed so the state can return to the bond market to finance public projects that provide a jolt to the economy.

Controller John Chiang said last month that California may be forced to issue IOUs for the second year in a row because it’s spending more than it collects in revenue. The bill is aimed at preventing cash shortages projected as soon as next month by empowering officials to delay certain payments, including those to schools, universities and local governments, to conserve money for debt service and other key expenses.
California Demands Income Tax Payments In Advance

Reader "Paul" just pinged me this news affecting business owners and self-employed contractors.

Hi Mish

I just picked up tax documents from my CPA. California require me to pay 30% of my estimated tax for the year on 04/15/10 and another 50% by 06-15-10. The balance of 20% is due on 01-15-11.

They want 80% of my annual estimate after 6 months, taxing me on money I have yet to earn for the year.

Only in La-La Land could one think these actions should impress the bond market. Then again, the stock market soared mid-day after Bernanke repeated for the 40th time that he was not hiking soon. So hey, who knows?

Mike "Mish" Shedlock

[barbaro]

Here's a good, brief take by George4title on California bureaucrats making $100,000 per year, the state chasing after money any way they can get it, and people leaving California.

The California dream is dying, and rather quickly.

[barbaro]

The 3 biggest pension in California face a $500 billion shortfall. With the economy the way it is, I just see bleak times ahead for California.

People with state pensions may have to realize they won't get what theywere promised.

Analysis of California Pensions Finds Half-Trillion-Dollar Gap

By MARY WILLIAMS WALSH

Published: April 6, 2010


An independent analysis of California’s three big pension funds has found a hidden shortfall of more than half a trillion dollars, several times the amount reported by the funds and more than six times the value of the state’s outstanding bonds.


California Gov. Arnold Schwarzenegger says that unless legislators act on pension reform, programs will have to be cut.

Automaker Pensions Underfunded by $17 Billion (April 7, 2010)

• Times Topic: Pensions and Retirement Plans

The analysis was commissioned by Gov. Arnold Schwarzenegger, who has been pressing the State Legislature to focus on the rising cost of public pensions.
Graduate students at Stanford applied fair-value accounting principles to California’s pension funds, using a method recently devised by two economists working in Illinois, Joshua D. Rauh of Northwestern University and Robert Novy-Marx of the University of Chicago.



The Stanford group’s finding does not suggest that California has to come up with half a trillion dollars all at once; pensions are paid slowly over time. But the possibility that the state’s public pension funds are much deeper in the hole than reported could help explain why the required contributions to the funds have been rising every year, contributing to California’s annual budget drama.
The finding also raises vexing legal issues, because public debts in California are supposed to be approved by the voters. The voters have, in fact, duly authorized all of the state’s general obligation bonds, but the much larger pension debt is appearing out of nowhere.



The researchers offered six recommendations for closing the gap between what is owed to the state’s retirees and how much has been set aside, including less volatile investments and a revamped benefit structure.



Governor Schwarzenegger issued a statement on Monday, warning that unless state lawmakers tackled pension reform, “increasingly large portions of state funding for programs Californians hold dear, such as schools, parks and health care, will be diverted to pay for this debt.”



Mr. Schwarzenegger pointed out that he proposed pension initiatives a year ago, but lawmakers never followed through.



“We cannot wait any longer,” he said. “Without reform, pension debt will only grow.”

Link & entire: Analysis of California Pensions Sees Half-Trillion Dollar Gap - NYTimes.com