@meltdown:

"There are large numbers of well to do Californians who are now declaring residency in other states to avoid paying ANY California income taxes. I have first hand knowledge of long term residents living out of state for 6 months and a day and living in CA the rest of the year. We lose 100% of the revenue! Is that insane or what?"

Many Californians across the income divide declare residency in my state, Texas, to avoid the Spousal Support Laws regarding divorce. It would be interesting to know the numbers.

"the Founding Fathers of our country worked so hard to keep the running of government out of the hands of the great unwashed rabble."

And these are the people who call themselves Democrats, as in 'party of the common people'. No wonder California is in trouble.

Your earlier post made it sound as if the state government of Arizona (where you apparently reside) has recently been able to close its own looming $3.3 billion budget deficit for the year 2010 (a number which is fully 75% of California's budget deficit per capita, since Arizona only has about 18% of the population of CA.)

It looks as if something was overlooked in the fine print:

Redo budget, Brewer tells lawmakers

By Daniel Scarpinato

Arizona Daily Star

Tucson, Arizona | Published: 07.02.2009

PHOENIX — The fight over how to balance the state budget isn't over.

In fact, it may just be beginning.

Hours after they adjourned one of the longest legislative sessions in state history Wednesday, Gov. Jan Brewer called on lawmakers to get back to work on a new budget — one that includes a tax increase.

Calling their approved plan "fatally flawed," Brewer vetoed much of the $8.4 billion spending package approved by fellow Republicans. Now, legislators will meet again in special session Monday.

Brewer says she still wants a temporary increase in the state sales tax to alleviate cuts to K-12 education, health and human services and public safety in the face of an at least $3 billion budget deficit...

...Brewer said the Legislature's "failure to provide a comprehensive solution" had forced her to "cobble together a resolution that contains flaws, but is superior" to their package.

That meant vetoing wholesale parts of the budget, like the entire $3.2 billion allocation to K-12 education. But Brewer did that, she said, because she wants lawmakers to lessen the cut — about $220 million in their approved package. Her line-item veto power did not allow her to change the figure.

That leaves public schools funded only through the end of July, said state school Superintendent Tom Horne. And charter schools are funded only through July 15, he said...

http://www.azstarnet.com/metro/299410

Interestingly, Arizona Gov. Brewer's solution is the same as what I propose for CA: a 1% increase in the sales tax for 3 years, with a sunset clause.

But it seems that she's having trouble getting the approval of that measure by her fellow Republicans in the Legislature- who evidently have their own alternative proposal, entitled "The Big Rock Candy Mountain."

It consists of saying "I don' wannoo!"

Although they apply the usual snake oil camofluage: "Raising taxes during a recession? Must not have read Econ 101, chortle chortle..."

Word: Econ 101 indicates that if you need your car to go to work but you find out it needs a new radiator, and then you find out it needs a water pump too, you pay for them both and get back on the road instead of pouting about it. Even if it means you run in the red for a while.

I hope you'll keep us up to date on the doings with the Arizona budget, agore.

California government declares fiscal emergency over budget

Reuters

By Jim Christie Jim Christie – Wed Jul 1, 4:52 pm ET

SAN FRANCISCO (Reuters) – California Gov. Arnold Schwarzenegger on Wednesday declared a fiscal emergency to force lawmakers into a special session to tackle a state budget gap that has widened to $26.3 billion from $24.3 billion after they failed to close it on Tuesday...

http://news.yahoo.com/s/nm/20090701/pl_nm/us_economy_california_budget

Frankly, if I were Governor Schwarzenegger, I'd throw up my hands and defect to the Democrats. Find the adults in the room. And then tell the people why he did it.

If he did that, I think the citizens of California would get the message. I think a majority of them get it already, but it would underscore the point.

"The states I was thinking about are the ones that get pointed to as models of fiscal responsibility for their balanced budgets and low taxes, like North Dakota, Montana, and Wyoming."

Those states are at the very bottom of the population density list: (people per square mile in 2007):

North Dakota: 9.3

Montana: 6.5

Wyoming: 5.4

Alaska: 1.2

Compared to California's 234.4, their population density is very, very low. It would be interesting to compare the urban/suburban/rural mix, too. In some states with lots of agriculture, people may be spread out fairly evenly, while in others they may cluster in a few urban/suburban areas while the rest of the state is largely uninhabited, because of hostile climate, geography, or being a park or preserve.

"it's no trick to balance a budget and keep taxes at rock bottom in a State like Wyoming, which is 60% the territorial size of California and holds a population of only about 522,000 people."

Why would that be true? Wouldn't it be more expensive per resident to provide things like education, police, medical care, transportation, communication, and utilities, because the distance between people is so much greater and there are so many fewer taxpayers? Land prices would also be much lower.

"That has a lot more to do with how the state is able to do without a state income tax, and to have a sales tax of only 4%, than simple adherence to frugality and an adherence to ideological conservatism."

I'm not convinced. I think the most realistic number is "what does the state spend per resident?"

I think it has a lot more to do with factors like the following:

1) What services does the state actually provide? Most states I know of don't have anything like CA's state university system - particularly when it comes to how it is funded and what it takes to get in.

2) What is the population mix? A state with lots of children whose families cannot afford private school will have much larger education costs that one with fewer and richer children. A state with lots of retirees will have lots of money coming in from Social Security and out-of-state investments.

3) What are the primary industries, and how does the cash flow? Be sure to consider the federal government as an "industry", because if a state has lots of military bases, national parks or other federal installations, they will act as money-conduits. Think about how much money flows to Florida because of NASA. Or how some states get lots of tourism dollars.

4) How does the state fund everything, and how predictable are the revenue sources? I

I think one of the biggest factors causing the various financial crises (not just in CA) is the fact that too many Americans are reactive rather than proactive. Short-term instead of long-term. They set up systems without regard for what will happen in the long run, or they assume that short-term success will continue long-term, when common sense would indicate the opposite.

It used to be that "conservatives" thought long-term, at least in financial matters. That ended about 30 years ago, and now the "conservatives" spend even more than the "liberals". They just spend it on different things.