Wikinvest Wire

One more reason to leave California

Thursday, November 06, 2008

If things go according to plan, my wife and I will be moving another 550 miles north to Eugene, Oregon sometime next spring. That decision is looking increasingly sound, particularly in light of what looks to be a huge increase in the California state sales tax.

While it's not clear that things will be better in Oregon in the years ahead, they will certainly not be any worse than in California where unemployment is rising along with crime and the foreclosure rate as the state's finances rapidly spin out of control with at least one city having already gone belly-up.

Earlier today, Governor Arnold Schwarzenegger announced that an $11.2 billion hole has been blown in the sham of a budget that was signed into law just six weeks ago (lots of accounting sleight-of-hand) and, as a result, spending cuts of $4.5 billion have been proposed along with a hike in the sales tax which is expected to raise $4.4 billion.

More spending cuts and more tax increases are likely to follow, this report from Bloomberg filling in some of the details:

Schwarzenegger, a 61-year-old Republican, issued an order calling lawmakers immediately into a special session to consider ways to close the gap. He proposed increasing the state's tax by 1.5 percentage points for three years as well as increasing oil severance and alcoholic beverage taxes and motor vehicle fees.

``We have a dramatic situation here,'' Schwarzenegger told reporters in Sacramento. ``We must stop the bleeding.''
IMAGECalifornia has been hard hit by the housing-market rout and the worst financial crisis on Wall Street since the Great Depression. The state leads the nation in foreclosures and its unemployment rate reached 7.7 percent last month, the fourth highest in the country. Double-digit declines in stock markets have sapped tax revenue from income and capital gains the state relies upon for its budget.
The bigger the boom, the bigger the bust - over the last ten years, nowhere have the booms been bigger than in California.

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12 comments:

Anonymous said...

Welcome to the People's Republic of Oregon. Out of the frying pan, and into the fire..

Anonymous said...

"We have a dramatic situation here,"Schwarzenegger told reporters in Sacramento.

Alternate Ending: Directors Cut

"We must BEGIN the bleeding," smiled the newly morphed Governator.

Anonymous said...

Why not Washington or Alaska?

Anonymous said...

Tim, I've heard the Gold Coast of Alaska is great. Great life and a strong secessionist movement (what this country really needs) to boot. Surely you can blog from there, sail your boat and learn to fly light aviation.

Tim said...

Based on our recent and future progress, we'll make it to Washington in about 2011 and Canada a few years after that. Then it's on to Alaska.
It's hard to believe that we spent so many years in Southern California.

Anonymous said...

I used to live in Oregon. There's no sales tax, but you can't pump your own gas (annoying when the queue is long). The income taxes are insane. Oregon is a better spot for retirees than people still building a nest egg.

Anonymous said...

I also live here in CA, I am guessing lots of people will slide over to Nevada for their 0% income tax and cheap housing (foreclosures). This is just the beginning of a long string of upcoming tax and fee increases...

Anonymous said...

What were some of your other reasons for leaving? The heavy traffic? The air pollution? The incredibly high state income taxes? The paralysis in our state government?

Anonymous said...

Can't wait until the California contagion spreads to the other states. I'm sure Speaker Pelosi will do her part.

Anonymous said...

Why not move to Texas? Texas and the oil producing states are actually booming during these days of financial stress.

Anonymous said...

Why not move to Texas?

Because Tim might not want to live in a state where most people can't walk and chew gum at the same time.

weinerdog43

Ian Wachowiak said...

Tim,
I'm jealous.
I've asked my wife to consider a move away from southern california. My reasons are many - traffic, population congestion, high cost of living, etc. I used to love it here, but I'm finding that the older I get the less attractive SoCal is for me. This morning I listened to an NPR program describing the Governator's proposed tax hike. All the while thinking to myself - "I wonder how this will affect consumers? Will they purchase less of those highly elastic goods they don't need? big screen tv's, recreational boats, etc." I thought to myself I'm gonna stop buying shit I don't need. I also have to make due with fewer cold beers during the week. bummer.

Too bad my wife won't consider a move. Her reason? She says her family is close by and wants them to see their grandchildren grow up. Well the grandparents don't come around all that much anyway and they certainly want nothing to do with babysitting! They prefer to spend their weekends at the local Indian casino. Go figure. Fuck I hate socal.

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