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Comment by knolax | Hacker News Reader

>There is no state in the country that deserves to lose its most productive citizens and go bankrupt as much as California.

I'm genuinely curious as to why there is so much rancor towards California in this forum? Could you explain why they deserve this?

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Every state and city has it's own challenges: TX is hot, Chicago has crime, Detroit lost way too many jobs, Baltimore is drowning in drugs, etc.

But CA is one of the few states that caused it's own problems: it's all self inflicted. Nearly all the problems CA has are due to it's inept voters/politicians: everything from prop 13 to the mountain of legislation inacted over the last 50 years to prevent housing from growing in a state that is actively attracting more and more people.

And, the situation is becoming increasingly dire. 19% SPA adjusted poverty rate, one of the highest in the nation (despite having the highest salaries of any state). this lack of wealth affects everyone living in CA, even those that already own a home (because it drives up the cost of everything else too), but especially those that don't own a home. Although millions have fled CA, it's still not enough.

It's due to the self inflicted nature of the problems that people don't have much sympathy for CA.

My two cents having lived in CA for 12 years now: it boils down to the general perception that we residents pay a lot of money to the state to live here with not a whole lot to actually show for it. Our infrastructure sucks, our public primary schools mostly suck, homelessness is out of control, wildfires, water shortages, and power brown-outs seem to hit every year, etc. etc. And on top of that, our tax dollars seem more often than not to go to projects that are blatant rip-offs to the public (see: the "high speed" rail project through the central valley). Also from personal experience, California is about the worst state in the country I can think of to start a non-tech small business for multiple financial and labor reasons.

Now, the reality is that California's monetary situation is complex and not entirely the fault of the legislature. Prop 13, voted in by the residents themselves 40 years ago, is a giant sandbag on the state's finances. California's wealth inequality is also frankly ridiculous [1] and causes a lot of problems. The vast majority of the state's residents are not wealthy and thus need a lot of support services from the state, so if you're a wealthy tech worker it seems like your money is disappearing, but a lot of it is going to support families who make less than a third of your salary. The state also runs some excellent colleges and a bunch of fantastic national parks, beaches, reserves, etc. that cost a lot of money.

The net result is that if you're a high income earner, libertarian-leaning, or generally entrepreneurial, your perception can easily be that the state is a wealth-sucking behemoth funneling your exorbitant tax dollars into homeless shelters and welfare programs while your friends in Texas live in shiny new houses on acre lots with swimming pools, tennis clubs, and places that let you actually shoot guns while paying no income tax. As always, though, the full picture is more nuanced.

[1] https://thehill.com/opinion/finance/412928-middle-class-is-d...

The city and county of SF has a per capita budget almost double that of other US city-counties. Double.

I would argue people living in SF certainly aren’t getting double the govt services.

Mind sharing where you read this? (Okay, if you don't recall, I just want to see if it's mostly pension service).

If a large chunk of that goes to salary, and a large chunk of those salaries goes to SF's crazy-expensive housing...I think you know where I'm going with this. I'll admit I don't know what the actual numbers are, but if this thesis is true, the solution is right in front of them too - let housing become cheaper by permitting more construction. And possibly ending Prop 13. Mostly a combination of the 2.

You can see this in almost any labor-related expense in the Bay Area. Eating out is 30-40% more expensive than comparable metros, but you're not getting 30-40% more for your money. Ditto childcare, plumbers, electricians and other contractors, personal care, pet care etc etc.

The SF budget is roughly $11B but about half of that is already allocated to services that benefit the region - SFO international airport, water infrastructure, transportation. Fun fact, SF city/county doesn't pay for schooling in the city. That's paid for by the state.

https://sfmayor.org/sites/default/files/CSF_Budget_Book_2017...

Well, no, most of the multiple in the budget goes straight to higher labor costs in SF; government services are extremely labor intensive and extremely localized, so have a cost very much driven by the cost of local labor.

Problem is that Seattle, with it’s high cost of living, spends 2/3’s what SF does. Don’t think SF city workers get paid 50% more than in Seattle.

> Don’t think SF city workers get paid 50% more than in Seattle.

While I don’t have time (without getting paid for it) to do a comprehensive like-for-like comparison weighted to account for how much of the work is in each classification, they do very close to that at the bottom end (Seattle’s lowest civil service hourly rate is $10.54, SF’s is $15.) So I wouldn't be surprised if it was also approximately true across the board.

According to google, salaries (and benefits) are half the SF budget. So even if SF paid 50% more, that only explains half the discrepancy.

No, because local labor costs affect more of local government costs than just direct employment.

But another big chunk is that California has realigned a number of functions previously done at the State level (and still done by the state in other states) to counties (this includes certain portions of the State Medicaid program, and prison realignment, among the larger elements), plus San Francisco is a City and County, whereas Seattle is a city that is distinct from it's county, so a number of functions that in Seattle to would show up in the King County or the Washington State budget are covered by SF.

On one hand, I do agree things could be better. The DMV is an unmitigated disaster, and improvements could be made to public transportation, and so forth.

On the other, the Bay Area has some of the best weather I’ve ever had, has plenty of places to go and things to do, has some seriously great work opportunities for software developers, and hell, it may not be the best in infrastructure but it is Far from worst. I come from Detroit and at least public transportation here works. 3x the rent and 2x the taxes, sure; but quality of life is pretty good overall imo.

And honestly, I take no issue with much of my money going to social support. Shrug.

The problem is, your money really goes to landlords. The unaffordability of the state for regular people is the result of laws inhibiting housing growth, not because of general mediocrity of the populace.

To be clear, that was more regarding taxes than rent. While rent is about three times more expensive where I live now, I’d also say the complex I live in is quite high quality compared to where I rented before... so I know not all of the money is just being pocketed. Apartments here are clearly fighting for more big tech employees.

> Prop 13, voted in by the residents themselves 40 years ago, is a giant sandbag on the state's finances.

Yes, prop 13 is a stupid piece of legislation. But it isn’t an insurmountable obstacle to good governance. Prop 13 made it impossible to have a reasonable property tax system, so California (and its subdivisions) should not rely on property taxes. Problem solved.

What should they rely on instead? Increased sales taxes would disproportionately hurt the poor.

How about income taxes?

You have accurately described the current state of affairs.

There have been a lot of unexpected knock-on effects. Among other things, it means Californian budgets swing wildly according to how well the local economy is doing. Another is strongly encouraging the permitting of offices over residences, further contributing to an already painfully low supply of housing.

I don’t believe the status quo is no property taxes in California. Despite the fact that the only kind that’s allowed is bizarre and broken, they are still in place.

Please accept my apologies. I can see I've been unclear.

The situation you call for, depending largely upon income taxes for government revenue, is the status quo in California. As you correctly note there are property taxes. However, they comprise a lower percentage of state revenues than is typical among states. This situation has produced the aforementioned side-effects.

I do hope that is clearer. Please don't hesitate to ask if you have any questions!

Stability is good for governments but bad for people. If you hold the tax amount steady and vary income (or wealth if you want to go that direction) then you are necessarily going to to have a less progressive and more arbitrary system than if you vary taxes with income/wealth.

That's exactly what this article is about though. The variability of income taxes and how that causes problems budgeting for recurring costs.

> California (and its subdivisions) should not rely on property taxes. Problem solved.

Wow, just like that. Thanks HN!

> Prop 13 made it impossible to have a reasonable property tax system, so California (and its subdivisions) should not rely on property taxes. Problem solved.

Hence California's high income and sales taxes, but both taxable income and consumption are more volatile than property values and more tightly synched with business cycles, which (given a Constitutional balanced operating budget mandate) makes countercyclical spending very difficult (further complicated by the lead time on bonds since they need public advance approval, which makes using the capital budget for countercyclical spending more difficult.)

This pretty much nailed it except the part about the national parks. It's the federal government that supports them, not California. For me, the national parks in the state is California's only real redeeming quality and it's just chance that this state ended up rich in national parks

> it seems like your money is disappearing, but a lot of it is going to support families who make less than a third of your salary.

I would also add that it wouldn't be necessary to support many of these families if they lived in other states. California's well-intentioned but poorly thought out policies directly contribute to why many of these families need support in the first place.

Punching up?

Abuse is ok if you’re doing it to a disfavoured group that can plausibly be claimed to have greater social privilege on some access. For example if a black Yale graduate insults a white waitress that’s ok because as a white person she has privilege and he doesn’t. It’s a crass application of intersectionality theory, the only kind that exists in practice. It’s like the oppression olympics except it’s not a joke, the people talking about it are entirely serious. Abuse is ok if ...

I’m not saying it’s ok, just trying to answer the question. California is a place people love to live that’s been glorified by the media for decades, and is the seat of power of the ascendant tech industry. Of course people are going to bash it.

Even those in the ascendant tech industry, like myself, bash California because the California government not only does nothing to help the tech industry, they actively pursue policies that hurt the tech industry.

If anything, my taxes are being used to fund idiots in the state capitol that hurt the value of the equity compensation I get from my employer. I really wish my employer were located in any state but California. Paying high taxes for a government that actively works against your interests just adds insult to injury.

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