This is their history. Their tax structure makes planning
by Raoul (2024-02-21 11:00:05)

In reply to: California budget deficit $15B higher than expected.  posted by krudler

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extremely difficult. Thus they need (and thanks to Jerry Brown, have) a solid rainy day fund contingency. But even that could get impacted.

Part of the issue is spending, and part is revenue. California has a 5.1% unemployment rate - only District of Columbia and Nevada are higher. And GDP growth in CA in Q3 was an OK 4.8% (basically average), but that well lagged Nevada's 6.3% so I'd bet on NV's improvement in unemployment before CA.




Actually the Governator started the rainy day fund in Ca
by SixShutouts66  (2024-02-21 14:04:23)     cannot delete  |  Edit  |  Return to Board  |  Ignore Poster   |   Highlight Poster  |   Cannot reply

in 2004 and Brown expanded Arnold's idea in 2014 via an approved proposition.

California's unemployment rate has generally been higher than the national average (the link expands on this). I'd guess some of it is due to seasonal work (construction, entertainment, ans tourism come to mind). Other factors are the cash/gig economy that don't count people earning money. I'd add the unemployment rates tend to be higher with a younger population.

Unfortunately, Government in California and probably in general act like families do when the wage earners are working a good deal of overtime or have received unexpected bonuses - thinking that this is how they can live in the future. Many of our legislators are blind to this truism and create (generally worthwhile) expansions to the Government that beneficiaries expect to last and complain about the meanies who cut them back. Note the much beloved/hated Proposition 13 was a backlash to uncontrolled spending when the housing market exploded in the 1970s.

Unfortunately, what I expect is that we'll be faced with tax increases to keep programs alive and moving some Government funding from the general fund to bonds (already one in this upcoming primary).

Post Covid, CA's unemployment rate improved faster than
by Raoul  (2024-02-21 14:29:55)     cannot delete  |  Edit  |  Return to Board  |  Ignore Poster   |   Highlight Poster  |   Cannot reply

the overall US unemployment rate (as it peaked at a higher level: 16.1% vs 14.8%)). In August of 2022 the CA unemployment rate was only 20 bps higher than the US average of 3.6%. Since then the US rate has stayed about flat and CA has risen steadily to now 5.1% at December 2023.

CA was consistently about 30 bps higher on unemployment rate than the US rate for much of 2019.

CA has gone from 3.8% to 5.1% in 17 months. It's an outlier and it certainly fits with the burgeoning budget deficit as higher unemployment leads to less income and more safety net needs.

Best thing for CA would be for NVDA to have great earnings tonight and have many of the employees, including the biggest holders, sell a significant portion of their shares if the stock keeps going up. They could probably raise an extra $10B.

What's driving the higher than average unemployment
by krudler  (2024-02-21 11:08:47)     cannot delete  |  Edit  |  Return to Board  |  Ignore Poster   |   Highlight Poster  |   Cannot reply

rate there? Is it still a recovery from COVID?
Could it be that CA has a larger than average
by Tex Francisco  (2024-02-21 13:22:49)     cannot delete  |  Edit  |  Return to Board  |  Ignore Poster   |   Highlight Poster  |   Cannot reply

underground gig economy, i.e., people who work but still report as unemployed?
there are a substantial amount of cash only businesses
by jt  (2024-02-21 13:25:10)     cannot delete  |  Edit  |  Return to Board  |  Ignore Poster   |   Highlight Poster  |   Cannot reply

in SF.

I'm not talking about high dollar businesses, mind you, but small mom and pop types of places.

Now, there might be a variety of very good reasons for them to be cash only and perhaps they are paying their fair share in taxes.
There's also the Roundup in Lafayette! *
by enginerd194  (2024-02-21 13:55:35)     cannot delete  |  Edit  |  Return to Board  |  Ignore Poster   |   Highlight Poster  |   Cannot reply

They have been high for a while but pre-COVID they were
by Raoul  (2024-02-21 12:29:18)     cannot delete  |  Edit  |  Return to Board  |  Ignore Poster   |   Highlight Poster  |   Cannot reply

not bottom 5 consistently. More like Bottom 3rd. The relative erosion must be due to something that is different for CA than other states. It can't be blamed on tech because tech unemployment is recent and has not really been seen in the numbers (a source of confusion for many, but few employees and highly skilled part of the answer).


Nice weather makes it a destination
by gozer  (2024-02-21 12:21:02)     cannot delete  |  Edit  |  Return to Board  |  Ignore Poster   |   Highlight Poster  |   Cannot reply

if you're unemployable and likely to spend the bulk of your life sleeping outdoors, are you going to want to do it in LA or San Diego, or would you rather be in Minneapolis?

If I never have to take a business trip to Minnesota during
by krudler  (2024-02-21 12:24:33)     cannot delete  |  Edit  |  Return to Board  |  Ignore Poster   |   Highlight Poster  |   Cannot reply

winter again I'll be happy. I thought Chicago was cold. Beautiful but painful. I'm sure city-specific policies also have a push/pull impact on homeless migration as well.

I think there's some truth to this
by ravenium  (2024-02-21 13:37:38)     cannot delete  |  Edit  |  Return to Board  |  Ignore Poster   |   Highlight Poster  |   Cannot reply

However, it's a very complex problem with a lot of layers. Here's the way my thinking goes:

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Weather is an overstated problem - one does not see the same homeless numbers in, say, Alabama as one does in California.

Ahh, but what about housing costs, which are far lower in AL than CA?

That only impacts the people who can sustain a roof over their heads. What about the "problematic" ones (mental illness, drug use, etc)?

They are heavily encouraged to go where they will not be hassled. This may mean bussing, but it also means "that place is far more lenient and I can get away with stuff, let's go there". I don't think there's a specific "policy" that encourages this, but there's a paralysis of "we can't do x" where other states decide "we can do X, fuck them".

Thus you get A) economically homeless, due to housing and B) homeless due to antisocial behavior, rolled up into a monolith that people go round and round chatting about.

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So what attracts the antisocial contingent to the west coast? I'd say it's more of a sentiment than actual policy:

"hard drug use should be destigmatized"

"rehab is a choice and only when the person is ready, it's their right to choose when"

I think those statements and sentiments are what have caused the greatest harm, together with the "bundling" of the economically homeless into the monolith. You can't help A and B in the same way.