Contributed by Chriss Street. Support for Proposition 30, the income and sales tax increase touted by Gov. Brown, has fallen below 50%. Now public employees’ unions are spending fortunes to get voters to rescue their lifestyles. Meanwhile, state politicians have increased deficit spending this year by more than the $6 billion Prop 30 might bring in—and Gov. Brown is threatening with a doomsday scenario if it fails.
Despite the current hype about the recovery in California, the manufacturing index suddenly collapsed. And with the star of California, Venture Capital, facing a “dismal fundraising climate,” funding for startups might soon dry up.
On Treasure Island, a former naval base in the San Francisco Bay, there’s a spot the Navy calls “USS Pandemonium Site I,” occupied by multi-family housing units. Potential contaminants: Radium-226 and cesium-137. Contamination, according to the Navy, is “unlikely.” But the Health Department finds 93 spots where radiation is up to 2.7 times the normal exposure level. In one area, it’s 4,380% above the annual dose limit.
Contributed by Chriss Street. During the “Great Recession,” the California private sector was forced to slash employment and spending, but the public sector made only modest cutbacks. Much of this state and local spending was funded by selling municipal bonds to elderly investor who were told the “muni” market was safe because the default rate was very low. But a Federal Reserve study debunks that myth and accuses the credit ratings agencies of “luring investors” into buying these bonds.
Contributed by Chriss Street. According to a SEC regulatory filing, Berkshire Hathaway Inc. managed by world famous investor Warren Buffett, dumped half of its $16.5 billion investment in the municipal bond market. The Wall Street Journal described the huge secretive sale of munis by such a dominant investor as a “red flag.” The quick sale – and willingness to take a big loss – just before negative news was disclosed is highly suspicious.
“That amount of radium found to date cannot be explained by gauges, deck markers, and decontamination activities,” wrote Stephen Woods, an environmental cleanup manager at the California Department of Public Health, about Treasure Island, the rectilinear speck of land in the San Francisco Bay two-and-a-half miles of white caps from our kitchen window. It summed up decades of US Government efforts to bury nuclear sins under layers of ignorance.
Do NOT try to do this yourself.
The horse-trading sessions in Greece will most likely lead to new elections, and the inevitable: Greece’s exit from the Eurozone. The uncertain consequences for Greece and the rest of Europe will confound jittery financial markets. And while all eyes are fixed on Greece, a tiny economy on the worldwide scale, a much larger economy is heading deeper into fiscal disaster: California.
The hoped-for April spike in personal income tax revenues for the State of California fell again below the assumptions used to get the budget to “balance.” Instead of $9.4 billion, the state collected only $7.4 billion. A 21% shortfall! Corporate taxes were also below forecast. Red in ink for fiscal 2012 is nearly $12 billion. And yet, California has a mega-project.
Contributed by Chriss Street. The liquidity of the Orange County Treasurer’s Investment Pool was hammered last week when the City of Tustin withdrew $40 million and the State of California announced its intentions to pull out $90 million. No other member of the Auditor-Controller bureaucracy was willing to accept the head job, following the resignations of the County Treasury Oversight Chairman, the Auditor-Controller, and the Assistant Auditor-Controller.