California Pays Off Arnie’s $15 billion 2004 Loan from Wall Street
California Pays off $14 Billion in Costly Debt From 2004
Promoting the borrowing in Proposition 57 was one of Schwarzenegger’s first acts in office, and he pitched the measure as a way to avoid public service cuts and tax increases. The state had the lowest credit rating among all 50 states in the nation at the time, which added to the interest costs.
Critics, including then-state Treasurer Phil Angelides, warned that it was a mistake to shoulder long-term debt to solve short-term problems and could put the state in a more perilous financial position.
But thank God they were able to recall Governor Davis because he imposed a car tax . Which would have doomed California to —–.
Thanks Arnie! And who is laughing at Governor “Moonbeam” Jerry Brown now?
I rather like Jerry Brown. I even donated $100 when he ran for President.
I have some mixed feelings on Brown. On one hand I think I voted for him maybe 16 times in a row including both primary and general starting in 1976 as Secretary of State and then through Governor, Senator and Presidential bids.
On the other I was either a student or on staff at UC Berkeley all those years and for the most part Jerry did us dirty and started the funding crash that has turned Berkeley into something close to a private university with State funds dropping to something like 30%.
My first semester at Cal the total Fees were $212.50 a quarter which included medical in an on-campus hospital. Back then it was literally illegal to charge ‘tuition’ at a UC or a State University. But once Prop 13 went into effect and Gov. Brown decided it was his duty to defend it to the end the State Master Plan for Education (ironically the brainchild of Jerry’s father Gov. Pat Brown) went into the toilet as far as funding goes.
Which just goes to show I guess that Jerry knows how to squeeze a nickel.
Arnie took over in November of 2003. He pushed hard for prop 57. The law passed, and as a result the $15B of bonds were authorized.
Where did this money go? Build new bridges? Schools? Roads? No! The money was used to pay off the accumulated deficit that was run up by Grey Davis.
In June of 03 Cali nearly went broke as a result of the accumulated deficits. The Treasure’s words from June 03 (prior to Arnie)
“The state is broke,” said Department of Finance Director
Steve Peace, who ordered the fee increase. “For the first
time, we have none of our own money. As of today, we
are operating totally on borrowed cash. In addition,
we have no more borrowing capacity left.”
So Arnie borrowed big to clear the arrears that he inherited. Webb – Just curious, what would you have done back then? Raise license fees?
A bit on that from 03:
Yes raise license fees and change Prop 13 so it didn’t give an effective permanent exemption to corporations on property tax increases.
You know the Right likes to bleat long and hard about the need for the Federal government to balance its books, to look at is budget “like every household and state does” and on and on but when it comes right down to it they have an absolute aversion to asking the wealthy to pay anything extra. For them the tax ratchet only works to jack taxes down and not up. California was a much better State in all respects before that jackass Howard Jarvis sold a corporate tax break under the guise of cutting them for the middle class. Jerry Brown should have fought back but instead embraced it and then passed off the governorship through a string of horrible R’s to maybe the worst governor California ever had the so-called Dem Gray Davis. But the guy didn’t deserve recall over a fucking car tax and the solution wasn’t to simple borrow long to repay short. If Arnie had put in some sort of package deal that actually served to pay down that debt on net it would be one thing, but he didn’t and by the time Brown got into office California was the laughingstock of the country and proof that we needed to elect Republicans. Like Sam Brownback and Rick Perry and Scott Walker. Well Brown and Dem supermajorities in both Houses of the State Leg proved all that wrong.
Look the license fee might not have been the ideal situation. Gray not giving the State away to the Corrections Unions and the prison construction industry might have been a wiser choice overall, as well as doing something on the property tax side to get periodic reassessment of commercial properties at least every five years. But it would have been better than the attempts on anti-tax fanatics to turn California into Mississippi.
“[The Right has] an absolute aversion to asking the wealthy to pay anything extra.”
That is absolutely, one hundred percent false. We encourage charity.
What does increasing taxes on the wealthy (by which I assume you mean those with a large cash flow, not necessarily large net worth) have to do with ASKING?
Double post deleted. You’re welcome.
I find it interesting and revealing that you personally equate “the wealthy” and “We”. Explains much.
And as far as encouraging charity a lot depends on how you define that. For example the wealthy contribute huge amounts to institutions that are largely patronized by the wealthy themselves and which cater to their needs. Giving $100 million to your Alma Mater in exchange for having a building named after you or giving $10 million to the Church so that your name is up on the wall and you have an open invitation for tea with the Monsignor or supporting the symphony when you get an invite to the Funders’ Ball and Banquet while only a handful of tickets are provided for free to Julliard Students is often enough more about display than anything. That is rather than counting as Charity gets awfully close to the Sins of Vanity and Gluttony.
Beyond that do you have evidence that the wealthy contribute higher percentages of income than do tithing church attendees? Because otherwise you are making the same argument that you do with taxes generally, that the rich pay higher gross amounts. Well yes, that is because they have all the money.
And why do you assume that I am only interested in taxing cash flows rather than wealth stock? And one reason I use the word “asking” rather than “telling” is that under our current system the wealthy effectively own the political process and so you can’t “tell” them anything. Not when it comes to “their” money. In fact “begging” is probably a more operative word than “asking”.
It’s a credit to California voters that they rejected wrecking their state with this nonsense. If they can find a way to compel their notorious tax dodging tech industry (Apple, Google, FB we’re looking at you!) to contribute what they legitimately should be paying their finances will be fine.
Bkrasting: “The money was used to pay off the accumulated deficit that was run up by Grey Davis.”
So, wait. Arnie “paid off” the auto loan by putting it on a credit card. I don’t think “paid off” means what you think it means. This is what passes for finance in Republican parlance?
Bruce: ‘I find it interesting and revealing that you personally equate “the wealthy” and “We”.’
Read it again, Bruce:
“[The Right has] an absolute aversion to asking the wealthy to pay anything extra.
That is absolutely, one hundred percent false. We encourage charity.”
I am placing myself in “The Right” not in “the wealthy.”
Only from the wealthy? Because that is the implication here. Just from the grammatical construction.
Bruce: “That is rather than counting as Charity gets awfully close to the Sins of Vanity and Gluttony.”
Absolutely correct, Bruce. “Woe to you Pharisees, because you give God a tenth of your mint, rue and all other kinds of garden herbs, but you neglect justice and the love of God. You should have practiced the latter without leaving the former undone.” (Luke 11:42 (NIV))
“Be careful not to practice your righteousness in front of others to be seen by them. If you do, you will have no reward from your Father in heaven. So when you give to the needy, do not announce it with trumpets, as the hypocrites do in the synagogues and on the streets, to be honored by others. Truly I tell you, they have received their reward in full. But when you give to the needy, do not let your left hand know what your right hand is doing, so that your giving may be in secret. Then your Father, who sees what is done in secret, will reward you.” (Matt. 6:1-4 (NIV))
Still, those are useful donations. Giving to one’s alma mater is what allows them to give scholarships to poor children. While there may not be many poor kids going to concerts at Carnegie Hall, some poor kids might actually get to play there because of such donations. (We need to keep music education in public schools to help with those opportunities, too.)
Bruce: “Beyond that do you have evidence that the wealthy contribute higher percentages of income than do tithing church attendees?”
Absolutely not. If I recall (I cannot cite a source now), the highest percentage givers are Mormons, Southern Baptists, and African Methodist Episcopalians. The latter two are the POOREST congregations. However, it has been documented that conservatives, in general, do donate more time, money, and blood than liberals do. This makes sense, since conservatives think that we, as individuals, are responsible for taking care of each other, and liberals think that the government should do it.
Bruce: “And why do you assume that I am only interested in taxing cash flows rather than wealth stock?”
You can do that reasonably with a property tax (a rent tax would be even better), but net worth valuations are impossible to do accurately and without bias. I figure you have more sense than to advocate such an unworkable tax.
Bruce: ‘And one reason I use the word “asking” rather than “telling” is that under our current system the wealthy effectively own the political process and so you can’t “tell” them anything.’
That is why I want a Constitutional Amendment that limits campaign contributions to those who can vote in the election of the candidate to whom they are donating. The Koch brothers, assuming they live in different States, would only be able to buy two Congressmen, four Senators, a President, and a Vice President. And even that you could restrict to Presidential and Vice-Presidential giving to State campaign offices, since we only really get to vote for electors, not for the actual Presidential and Vice-Presidential candidates.
Naturally, the the NRA, the NEA, and Boeing cannot vote, so they would not be allowed to contribute. Only voters registered to vote in that election would be allowed to contribute to a candidate in that election.
Bruce: “Only from the wealthy? Because that is the implication here. Just from the grammatical construction.”
Sorry — I don’t understand the question. Only WHAT from the wealthy?
Warren: “Only WHAT from the wealthy?”
Of course not. Charity is always to be encouraged — from the wealthy, from the poor, from the high-cash-flow, from the low-cash-flow, and from everyone in between.
And no matter how rich a person is, he does not have more time or more blood than a poor man. Charity is not just measured my money.