Prop 94, 95, 96, 97 Where do you stand?

Arnold promised us a balanced budget. The previous governor (Davis) got recalled for being $6 billion short of spending objectives and wanting to borrow. Arnold was gong to open the books and solve the problem. He realized his hands were tied with mandated spending levels that required him to borrow $9 billion /year. Now the projection is $10 billion /year in revenue short falls and Arnold is turning to Indian gaming for some relief (only amounts to $450 million /year on average= $9 billion for twenty years). They are proposals to raise tax money. What do you think?

This post has been edited by techvbjoe on Jan 19 2008, 12:32 PM

One of the things that irks me is everyone wants a balanced budget but no one is willing to make the sacrifices needed to do so. Arnold came in trying to run CA like he ran his businesses, probably not a bad approach. Invest money where it belongs, don't spend what you don't have, etc. but has been hampered by our own CA system. Everyone wants a better CA economy as long as it doesn't affect them.

Looking at these propositions - how they are worded is confusing. I read in SF Chronical on 1/20 that the Indian Casinos pay no taxes - how can this be true? Anyone have the accurate info on this?

I am all for everyone paying their fair share but honestly, these props don't solve CA budget problem - to do that, we all have to cut back and stop spending what we don't have.

I'm all for not spending what we don't have, but at the same time, I can appreciate the value of borrowing to make an investment the same way most people would have to borrow to go to college, buy a home, start a business, or expand a business.

My question is, how did everything get like this? Without a timeline and the ability to see cause and effect, there's no way to determine "good debt" from stupid debt. If we end up cutting back and the cut backs affect schools, do we end up creating a economy deflating knowledge gap in 10 years?

If it were merely a matter of principle, I'd easily say "don't spend what you don't have," but in a more nuanced world, I have to bite my lip and throw my dart somewhere in between.

Hmmm, how did we get like this? Basically when times were good we spent like there was no tomorrow and like we would have all of that money coming in forever. But what goes up must come down and the bubble burst - we had expenses and now less tax dollars coming in to cover them. That's one way - I am sure there are quite a few others.

I agree - I want to see the state spend where it should, invest in the future, etc - at the same time we should also pay down debts and put some away for a rainy day (like when the bubble burst!) - we didn't do that and now we are stuck.

I read in the SF Chronical that the Indian Casinos don't pay any taxes today - does anyone know if this is true? If they don't pay taxes then what would this proposed amount from the props be? Is it a tax? Or something else?

QUOTE (Kathleen @ Jan 21 2008, 07:31 PM)

I read in the SF Chronical that the Indian Casinos don't pay any taxes today - does anyone know if this is true? If they don't pay taxes then what would this proposed amount from the props be? Is it a tax? Or something else?

Ok, this is ringing a bell now, but my memory's fuzzy. A few voting cycles ago, I remember there was a proposition to start taxing Indian Casinos in exchange for being more lenient on restrictions of how they could operate. They're not charged taxes because they're technically sovern territories.

I don't remember the outcome of that vote on the proposition to make a tax for opportunity exchange with the tribes. If the Cron is saying that they don't pay taxes today, I guess it didn't pass and props 94 through 97 is more or less the same set of props entering round II.

Okay, I don't have time to research but this is what I remember. THe budget was made with certain revenues in mind. The budget has very little flexibility in that we have mandated spending on virtually all big ticket items (except City Colleges and they are trying to fix that this year). The amount of adjustable spending is less than 20% of the budget (I even think it is less, more like 10%). With prop 13, we can't increase taxes without 2/3rds majority which is an impossibility. They can't even agree on a budget much less a tax increase. It is Political Suicide.

Some people in this state pay less than one percent property tax while new home buyers pay 2 percent for essential services. As you can guess, the rich (homeowners with tons of equity) pay almost nothing while the new home buyer stretched to the limit to get in this market is paying way more than their FAIR share. Thank Howard Jarvis and Paul Gann. It reduced property taxes by 57% but only for those who have held their properties since then or who have passed their properties on to their families. Does that suck or what? Renters get that tax passed on to their rent. So whether you own or not, you are paying for someone else's tax break.

This year the city colleges are trying to get out of being part of the general fund like primary education did years ago. They don't want the budget to effect their operation year to year either. That is prop 92. When times are bad, fees go up on the poorest and most needy of college students This is to make up for revenue shortfalls of the state. Sounds fair, right?

One year, one time, I would like to see a proposition that actually penalizes people who can AFFORD the shortfall. Why do social services, community colleges, health care, education, always have to take the hit everytime. Cut music programs, cut physical education but lets expand senior centers for retirees that have a pension, social security, medicare and nothing to do after they have finished their careers. I believe they can afford to pay for their own entertainment. Let them go to the city colleges for their entertainment. There are some great classes. The students can't afford it.

This post has been edited by techvbjoe on Jan 22 2008, 02:37 PM

I don't know whether the law passed or not, but I swear the schools were promised money just like the lottery, and nothing has happened there either.

Hard to fault Schwartzie for what is really a problem with property taxes, wasn't he still in Austria when Prop 13 was passed? In CA, we've been in recession for like 3 years even though the rest of the nation is just feeling it and starting to call it that now.

I don't know where I stand on this whole Indian gaming issue. If people are going to gamble away their life savings at least it could go to some public good, but I'm highly suspicious both of the way things stand and what they are proposing to change!

Schools get a set percentage of the budget and the lottery money. The state was taking away money as lottery money was replacing general funds. That was fixed with a set percentage formula. It is only for primary education.

This post has been edited by techvbjoe on Jan 23 2008, 09:20 AM

BTW, anyone have any good links to some balanced research on Props 94, 95, 96, and 97? What groups are endorsing what positions?

The League of Women Voters website always has great information, and links to information presented by both sides of every issue, including the impartial analysis offered by the state legislative analyst and summaries from the state attorney general. They also have links to the radio programs done by Michael Krasny's "Forum" on KQED that discussed the propositions in question in detail. Here are links to their information on the following propositions:

Prop. 94:
http://smartvoter.org/2008/02/05/ca/state/prop/94/

Prop. 95:
http://smartvoter.org/2008/02/05/ca/state/prop/95/

Prop. 96:
http://smartvoter.org/2008/02/05/ca/state/prop/96/

Prop. 97:
http://smartvoter.org/2008/02/05/ca/state/prop/97/

Vote No on prop 94 thru 97. Politicians can get their act together and submit a decent proposal instead of this farce. Lets not forget the other tribes either.

I took the time to wade through all the double talk and actually read the Proposition. Plus I did the math. Very interesting. Under the current system there are 2 funds that the tribes pay into and they are both used to pay $1.1 million per year to each of the 71 non-gaming tribes, for a total of about $78 million.

Under the new Propositions one of these funds is eliminated and the other is funded to only $9 million. The non-gaming tribes still get 1.1 million each. Guess who makes up the $69 million shortfall. The State of California's General Fund!! That eats up about half of the $122 million in increased revenues right off the bat.

Check it out. I can't believe that no one has made a point of this. I verified the facts with someone at the opponents web site (called the proponents and got no reply).

The 1.1 million is divided among the 71 tribes, it is not 1.1 million for each tribe, it is 1.1 million total. Not sure where you got your statistics.

I've been completely slammed with work, so I'm late to the punch here. I finally got a good read through these props and I initially was going to vote no on them, but after more reading and thought, I changed my mind. Here's what I saw...

The gaming will remain on Indian lands. They're not expanding gambling off of tribal lands, except for possibly to a bit of adjacent property that I noticed in one of the props. For all intents and purposes, it seems to be keeping the gaming in the same general vicinity. They'll just be expanding their existing casinos. Expanded casinos mean that they might be able to make them more attractive destinations to go game, eat, or whatever.

The bad part of all this is that it's hard to enforce total compliance with agreements to pay the state. As you can with taxes, there are ways to cheat the government, but these agreements are expected to result in a net positive of tens of millions of dollars on the low end and 100 million on the high end by 2030. Speaking of taxes, the state loses sales tax on anything sold on the reservations so if people flock to the expanded casinos as expanded entertainment meccas, we lose some sales tax.

On the bright side, the tribes are supposed to pay out money to support the social impacts of expanded gambling and are to be on the hook for other impacts of their expanded operations on nearby municipalities. They're responsible to the nearby cities, not to the state.

While it's likely that if the casinos become Vegas style entertainment meccas that it could draw sales tax dollars off the table from other nearby businesses, it could also create additional demand for businesses near the casinos similar to how Disneyland created a secondary entertainment and hospitality industries for miles around the Magic Kingdom.

The other thing that sold me was that in Southern California, it's not too far to drive to Vegas. Maybe we'll keep some of those dollars in state if there are more attractive options nearby.

I don't think this is a perfect agreement, but it seems to be the best of a flawed situation to me.

I just think before we allow one more slot machine we should predetermine NO MATTER WHO YOU ARE, what the tax rate will be for everyone wanting to expand or start up. Individual pacts allow corruption base on wealth and political standing. Everyone gets the same deal before we move forward for anyone. Treat them like a union and negotiate ONE Deal. 30% of gross revenues is a good starting point. When they expand within guidelines, we all benefit and it is not open to interpretation. They are still making money (ex: 70% of each dollar). Also there should be no time limit. We allow renegotiation every five years based on some criteria (ex: local policing, social services required to support, environmental concerns).