Should the American taxpayer bail out California?

If Republicans are looking to get back their conservative groove, they could do worse than study Minnesota's budget brawl. Mr. Pawlenty deftly (and amusingly) outmaneuvered his Democratic opposition, not only saving his state from huge tax increases but clearing the way to cut government spending. Call it a refreshing break from the financial-crisis norm.

Like most states, Minnesota has been facing a huge budget shortfall -- an estimated $4.6 billion over two years. These dire financial straits didn't deter the DFL-controlled legislature (the DFL is Minnesota's chapter of the Democratic Party), which got to work on big new spending bills. Included were not just the usual increases in appropriations but gems like $1.2 million in grants for TV and film producers and $200,000 for a youth environmental education program. Recession? What recession?

To fill in the hole they'd blown in the upcoming fiscal budget the DFL then proceeded to float every tax hike known to Garrison Keillor. A short list: A new top income tax rate of 9% (the fourth highest in the nation); across-the-board income tax increases; sales taxes on Internet downloads; the end of the local property tax cap (enacted only last year); alcohol taxes; cigarette taxes; eliminating the deduction for an organ donation (no joke); and killing the home mortgage interest deduction.

Upon receiving the last spending bill, he announced that he would exercise the power of "unallotment," which has been on the books since 1939 and which has been used four times. Under it, the governor is allowed to "unallot" (take away) any state spending for which there is no money to pay. Panicked, the DFL passed tax legislation to cover its blowout spending bills, 10 minutes before the session's end. Too late. The governor said he'd veto the bill and would not be calling back the legislature to do any more mischief.

The SD Ocean Beach?

Ah, everyone has good memories of the beaches here. I wish I'd been here in
the 70s; would have bought good prime real estate - nowadays it's hardly
affordable *sigh*

I still have my old surfboard.
Its up in the garage now, and I havent used it in a few years, but I spent many a day at the beach (sometimes I was there instead of school)

In 2003, Californians sent $50 billion more to Washington in federal taxes than the state received in federal expenditures. Representing a slight increase from levels that have held steady for three preceding years, the Golden State’s imbalance set a new record for any state, surpassing the previous mark (set also by California, in 2000 and 2001) of $48 billion.

To a large extent, however, two demographic factors help explain California’s spending versus taxing shortfall. (A third key factor, declining contract and defense spending, is discussed later.) First, state residents’ income levels exceed the national average, yielding above-average income tax receipts " an effect amplified by the progressive nature of the federal income tax system. Second, and more significantly, California’s population is considerably younger than average. Thus, the state houses fewer recipients of Social Security and Medicare payments " parts of a fast-growing budget sector that now accounts for nearly half of the nation’s total federal expenditures. Because of these two demographic influences, California’s status as a donor state should be expected to some degree.