The experts aren't sure why, but tax receipts during January came in $5 billion above the expectations factored into California's budget. That, as Sam Spade said in the Maltese Falcon, is a lot of dough.
From Bloomberg's Michael Marois: "High-income earners may have cashed out investments early in anticipation that federal income taxes would rise as part of a congressional deal over avoiding automatic tax increases, the state’s nonpartisan Legislative Analyst’s Office said yesterday in a report. U.S. levies on capital gains rose to 20 percent from 15 percent under this month’s agreement in Washington."
“January is also the final deadline for ‘estimated tax’ payments for the prior calendar year,” the office said in the report. “Estimated taxes are paid mainly by individuals reporting capital gains, business income, and other income not subject to withholding.”
Another reason, the analyst’s office said, may be that wealthy residents, who have to pay higher state income levies retroactively under a tax increase voters passed in November, chose to pay a portion of their obligations now instead of in April. Or it simply could be that the higher state rates are generating more revenue than forecast as the economy improves.
Whatever the reason, the good vibes aren't limited to the budget: Californians are in an optimistic mood, and some of the credit is going to our cranky, parsimonious governor, according to the latest survey by the Public Policy Institute of California.
From PPIC via Capitol Weekly: "The PPIC survey—which began the week after Brown released his budget and ended the day after President Barack Obama’s inauguration events—shows rising optimism among Californians after years of recession and state fiscal problems. The proportion of residents who say things in the state are going in the right direction—51 percent—is over 50 percent for the first time since January 2007 (55%). And 49 percent expect good economic times in the next year—not a majority, but a higher percentage than at any time since January 2007 (50%). Most (57%) say that Brown and the state legislature will be able to work together and accomplish a lot in the next year, up 13 points since last January."
"Californians give the governor a record-high 51 percent job approval rating (28% disapprove, 21% don’t know). His approval rating was 46 percent in January 2012 and 41 percent when he began his term in January 2011. The approval rating of the legislature is less positive but improved: 41 percent of Californians approve and 42 percent disapprove (17% don’t know). Approval of the legislature is the highest it has been since December 2007 (41%). Asked how they feel about the Democratic supermajority in the legislature, 40 percent say it is a good thing, 27 percent say it is a bad thing, and 29 percent say it makes no difference. As the legislative session begins, Californians’ approval of their individual state legislators is at 45 percent (34% disapprove, 20% don’t know). A year ago, 36 percent expressed approval (47% disapproved)."
Desperate for money, school districts across the state have borrowed billions of dollars with paybacks extending over years, which results in transactions that are many times the size of the original borrowing.
From Trey Bundy and Shane Shifflett in Bay Citizen: "Napa is one of at least 1,350 school districts and government agencies across the nation that have turned to a controversial form of borrowing called capital appreciation bonds to finance major projects, a California Watch analysis shows. Relying on these bonds has allowed districts to borrow billions of dollars while postponing payments in some cases for decades."
"This form of borrowing has created billions of dollars in debt for taxpayers and hundreds of millions of dollars in revenue for financial advisers and underwriters. Voters are usually unaware of the bonds’ high interest. At least one state, Michigan, has banned their use."
"In California, where rules governing the loans are among the loosest, more than 400 school districts and other agencies have racked up greater capital appreciation bond debt in the past six years than in any other state. They have borrowed $9 billion that will cost taxpayers $36 billion to repay over the next 40 years, according to data compiled by California Treasurer Bill Lockyer. He called it “debt for the next generation.”
Meanwhile, pistol-packing teachers, a lawmaker says, are one way to fight campus shootings.
From Jim Miller in the Press-Enterprise: "California teachers and other willing school employees would be trained to carry guns under legislation by Inland Assemblyman Tim Donnelly to allow districts to participate in a new School Marshals Program."
"The measure is one of more than a dozen firearms-related bills that have been introduced in the state Legislature following last month’s deadly school shooting at Sandy Hook Elementary School in Newtown, Conn."
"Most of the bills would impose new limits on guns and ammunition. Donnelly’s bill would expand the presence of guns on campus, something proposed by the National Rifle Association last month and one highly unlikely to advance far in the Democratic-controlled Legislature."
The corruption trial of former city council members in Bell is pressing forward, with the city clerk testifying under a grant of immunity that many official documents were forged.
From Corina Knoll and Ruvben Vives in the LA Times: "A key prosecution witness in the Bell corruption case testified Wednesday that signatures on city contracts, minutes for council meetings, agendas and even resolutions were forged."
"Bell City Clerk Rebecca Valdez's testimony could bolster the defense's argument that record-keeping in Bell was so sloppy that it would be difficult to prove that six former council members inflated their annual salaries to nearly $100,000 by serving on boards and commissions that met for a few minutes, if ever."
"On her third day on the witness stand, Valdez said she noticed the forgeries in 2010 when pulling together records requested by investigators looking into possible wrongdoing. She said she never looked into the forgeries, and didn't make a list of the questionable documents."
