Budgeting
Budgeting is on a lot of people's minds lately. On a personal level, the threat of layoffs and job loss has caused some slight tweaking to our daily budgeting. We have always been aware that jobs in the private sector (especially ours) are precarious, and as such have tried to have money socked away ... just in case.
But what brings this up today is Kansas's bank account being depleted and the Governor asking the Legislature to move money from accounts so that the state can make pay roll and pay it's 41,000+ employees on time (this Friday). The legislatures, led by Republicans who control the State Financial Control office have said they will not transfer the money until the Governor agrees upon the budget for the 2009 fiscal year.
This effects several members of my family that reside and work in the state. And they are naturally concerned about not getting paid on Friday.
Added to this is California. Oh California. How bankrupt thou art. Cali is in far worse straits than Kansas. At least the people in question in Kansas are not in danger of losing their pay checks all together.
Budgeting requires a bad guy. Someone has to say ... "No. We can not afford that." In the last 7 months I have grown accustomed to the notion that even employers can not grow a money tree, and that something has got to give. I have grown accustomed to the idea that what has to give, may end up being my pay check. Thankfully, I have survived thus far. But I am realistic. If things to do not improve, my situation is precarious at best and jobless at worst. But we'll make it through. I have faith and I'm a hard worker. I can benefit someone somewhere doing something.
While the private sector has been laying off people for months, the State governments of states like California have been living on borrowed money and refusing to see the writing on the wall. There's only so much money guys ... something has to give.
Updated ...
I started to write more on this at lunch but ran out of time. And work intervened.
California is in trouble for a couple of BIG reasons.
1 - they are hemmoraging residents. For years people have left Cali in droves. The cost of living is too high. Average, middle class citizens with families can't afford to live where they work. So they have to live 2 hours outside of the cities and commute. That gets old. So people move. To Texas.
2 - California has the highest illegal immigration population in the country. And they say it was 2.8M in 2006. I say hooey. There are at least 2.8M illegals living in Houston alone. There are way more than that living in Cali. And many of them are on welfare programs. And most of them have several kids in school. Most of them do not pay property taxes because they rent. Most of them do not pay income taxes because they work for employers who pay them under the table. I.E. in restaurants where they are paid in cash, construction jobs where they are paid in cash, services work where they are paid in cash. They don't pay a lot of money in sales tax because they don't buy anything. They send all the money home.
Now, so what's happening? California has a dwindling tax base, and a rising population of people that want social services. How do they propose to fix this? They can't cut those programs (because they are stupid) so they want to raise taxes. An increase on the gas tax and an increase in sales tax. What does this do? Drives the cost of living even higher, and forces more tax paying Americans away. To states like Texas.
California is suffering from their own blindness. They failed to look at the factors around them and act. Instead they welcomed massive amounts of government dependacy by creating welfare programs for immigrants, above and beyond federal mandates.
Taxes are already high in many of these states that are having budget shortfalls. Both Kansas and California are in the top 20 of states with high sales tax, and Kansas is in the top 15 of states with high property taxes. [Point of note ... of property taxes paid throughout the country ... Fort Bend County (Sugarland) and Collin County (Plano) are 44th and 37th, respectively. Out of 788 counties. Sheesh.]
The point is, California in particular is a state that is losing more residents than it is gaining (at least legal ones). They can't afford to scare more tax payers off. And it's not that these residents aren't patriotic or don't want roads or just think paying taxes is for suckers ... it's that they simply can not afford it and provide the kind of life they want for their families.
But what brings this up today is Kansas's bank account being depleted and the Governor asking the Legislature to move money from accounts so that the state can make pay roll and pay it's 41,000+ employees on time (this Friday). The legislatures, led by Republicans who control the State Financial Control office have said they will not transfer the money until the Governor agrees upon the budget for the 2009 fiscal year.
This effects several members of my family that reside and work in the state. And they are naturally concerned about not getting paid on Friday.
Added to this is California. Oh California. How bankrupt thou art. Cali is in far worse straits than Kansas. At least the people in question in Kansas are not in danger of losing their pay checks all together.
With lawmakers still unable to deliver a budget after three days of intense negotiations, Gov. Arnold Schwarzenegger prepared to lay off 10,000 government workers and his administration said it would halt the last 275 state-funded public works projects still in operation.
...
Schwarzenegger had delayed sending out pink slips since Friday, hoping that lawmakers would soon approve a budget. But they failed Monday to find a third GOP vote in the state Senate to achieve the two-thirds majority needed to pass a budget -- a requirement that essentially gives the minority Republicans veto power. A spokesman for Schwarzenegger said layoff notices would go out today.
Budgeting requires a bad guy. Someone has to say ... "No. We can not afford that." In the last 7 months I have grown accustomed to the notion that even employers can not grow a money tree, and that something has got to give. I have grown accustomed to the idea that what has to give, may end up being my pay check. Thankfully, I have survived thus far. But I am realistic. If things to do not improve, my situation is precarious at best and jobless at worst. But we'll make it through. I have faith and I'm a hard worker. I can benefit someone somewhere doing something.
While the private sector has been laying off people for months, the State governments of states like California have been living on borrowed money and refusing to see the writing on the wall. There's only so much money guys ... something has to give.
Updated ...
I started to write more on this at lunch but ran out of time. And work intervened.
California is in trouble for a couple of BIG reasons.
1 - they are hemmoraging residents. For years people have left Cali in droves. The cost of living is too high. Average, middle class citizens with families can't afford to live where they work. So they have to live 2 hours outside of the cities and commute. That gets old. So people move. To Texas.
2 - California has the highest illegal immigration population in the country. And they say it was 2.8M in 2006. I say hooey. There are at least 2.8M illegals living in Houston alone. There are way more than that living in Cali. And many of them are on welfare programs. And most of them have several kids in school. Most of them do not pay property taxes because they rent. Most of them do not pay income taxes because they work for employers who pay them under the table. I.E. in restaurants where they are paid in cash, construction jobs where they are paid in cash, services work where they are paid in cash. They don't pay a lot of money in sales tax because they don't buy anything. They send all the money home.
Now, so what's happening? California has a dwindling tax base, and a rising population of people that want social services. How do they propose to fix this? They can't cut those programs (because they are stupid) so they want to raise taxes. An increase on the gas tax and an increase in sales tax. What does this do? Drives the cost of living even higher, and forces more tax paying Americans away. To states like Texas.
California is suffering from their own blindness. They failed to look at the factors around them and act. Instead they welcomed massive amounts of government dependacy by creating welfare programs for immigrants, above and beyond federal mandates.
Taxes are already high in many of these states that are having budget shortfalls. Both Kansas and California are in the top 20 of states with high sales tax, and Kansas is in the top 15 of states with high property taxes. [Point of note ... of property taxes paid throughout the country ... Fort Bend County (Sugarland) and Collin County (Plano) are 44th and 37th, respectively. Out of 788 counties. Sheesh.]
The point is, California in particular is a state that is losing more residents than it is gaining (at least legal ones). They can't afford to scare more tax payers off. And it's not that these residents aren't patriotic or don't want roads or just think paying taxes is for suckers ... it's that they simply can not afford it and provide the kind of life they want for their families.
Comments
At the same time though, people want roads, they want police, they want prisons, they want schools. Yes, there are certainly places to cut the fat in government--always. But the reality is, if we want those services we have to pay for them. Which--in my humble and non-economist opinion--means that the era of "raising taxes=automatically bad no matter what" has to end.
And, as a slightly different point, I think there's a difference between employees in private businesses and government employees. At least in Kansas, working for the government I am making about half of what I could be making in private practice. Not complaining too much--I knew the deal I was making. However, implicit in that deal was a certain measure of security, i.e. I never thought I'd have to worry about the State of Kansas going bankrupt.
There is a serious difference between private sector and public. One is wasteful and the other can't afford to be. If business ran the way goverments did they'd be bankrupt. And since that's whats happening to states now, I don't think you can disagree.
Raising taxes in recessions is bad. People who are losing jobs can't afford raised sales taxes / property taxes / etc. It would make everything worse.
They (in congress) are the ones who need to pay back their constituents or their high dollar donors. They also need to get these things completed early because they know they only have so long to get this stuff passed before public opinion will go against them. 2010 is swiftly advancing. If the public knew what was really in this bill they would not have allowed it to be passed. The rest of the country would object to paying for a high speed train from Disneyland to Las Vegas. But it will happen, but not before a five year+ multimillion dollar environmental impact study to see if it can be built in the first place. Do you think someone who does those studies gave Harry Reed a good amount of money?
And you paid property tax through your rent and stuff ...
Isn't that hillarious about Collin and Fort Bend County?