February 8, 2016
The Coming California Calamity
Imported poverty will spell disaster
Breitbart -- February 5, 2016
California Budget in Deficit as Silicon Valley Falters
The bipartisan Legislative Analysts’ Office has announced that California's 2015-16 personal income tax collection has fallen from a huge surplus to a $147 million deficit. The cause appears to be plummeting Silicon Valley capital gains and weakening tech employment.
The quick reversal of fortunes for the state budget is disturbing, since the California State Controller reported that personal income tax collections through December had been at a $1.276 billion surplus.
With a hot tech stock market through June of last year, California realized about $4 billion in “extra” one-time capital gains tax revenues for the 2014-15 fiscal year.
California politicians used to spend windfalls on the middle class. But since Brown was elected in 2010, the state's middle class has shrunk from 46.7 to 43.5 percent of the population. Average incomes by 2013 had fallen by $5,255, and those spending at least 30 percent of income on housing leaped by 20 percent to 44 percent of state residents.
For the 2015-16 budget, the Governor and Legislature agreed to save $575 million for a “rainy day fund” and spend the balance on pet policies and projects. $380 million will be mailed out as checks to the working poor, for example.
The Legislative Analyst's Office (LAO) has reported that Silicon Valley's economic growth in 2015 was impressive, with jobs in the information sector up 10.2 percent, and the tech-heavy professional, scientific, and technical services sector's also seeing 10 percent gains.
But with a “structural deficit” relying on $16 billion in capital gains taxes to balance the budget, Breitbart News warned last June, “California will be as broke as Greece if the stock market ever tanks again.”
Glenn Spencer -- American Patrol Report
What the media won't tell you
The stock market is tanking. "The world appears to be trapped in a circular reference death spiral," Citi strategists led by Jonathan Stubbs said in a report on Thursday.
The Port of Oakland has just lost its second largest tenant as shipping and world trade slump.
These and other indicators point to a looming fiscal crisis for California. The top one percent of California taxpayers pay more than fifty percent of tax revenues, so when capital gains fall quickly, so does California revenue.
This is about to happen, and it is going to be very bad, but the media won't warn you. I exposed a fundamental flaw in the California economy sixteen years ago (see my video,) and California has come close to total collapse at least once. This time it will make it.