Friday, May 22, 2015

California : the "un-liveable" State.

California's Gov. Jerry Brown just released his May "revise" . With state revenues running $6.7 billion more than predicted in January’s preliminary budget, Democrats in the Legislature were looking to restore some of the billions in social service cuts made during the bleak years of the recession. There lots of money ,sure that revenues are up.California has become a mess over the last decade  and it is now completely controlled by hard core leftist Democrats in the state legislature who have bankrupt the state in the past while living like royalty at taxpayer's expense.Whenever a free-market research or business group releases a “best and worst” list of states, my eye goes straight to the bottom: To see whether California is last or was edged out for the lowest rank by one of the other mismanaged liberal bastions. Illinois seems to exist to boost the self-esteem of Californians.California and its cities can probably put New York to shame. San Franciscans ban McDonald’s Happy Meals and plastic bags even as they debate bizarre “freedoms,” such as the right to walk around in public naked. After much bad publicity, a state assembly committee recently rejected a “homeless bill of rights” that would have, until amended, established a constitutional right to “engage in life sustaining activities that must be carried out in public spaces.” In other words, it would have established a right to urinate in public. ***The BIGGEST problem with California is the fact that it's hard to live in this state .Why in the world would anyone want to live in the state of California at this point?  The entire state is rapidly becoming a bright, shining example of everything that is wrong with America.  While the money is flowing to Sacramento from honest tax payers , the money never goes to any infrastructure repairs . California roads are crumbling . Worst of all there is no affordability housing ,  (1)> most homes are selling near a 1 million dollars . Another piece that look with scrutiny is why is any part of the budget going to address the drought ? Gov. Jerry Brown recently ordered a 25% cut in water use in urban areas, and there are new rules for watering lawns and golf courses. The California’s debt levels, which crush public services and lead to demands for higher taxes. A new California Public Policy Center report found that “the outstanding debt owed by California’s state and local governments, using responsible actuarial assumptions, is almost certainly in excess of $1.0 trillion.” 
California's cost of living .
California , like wise the whole  "bay area" is a terrible place to buy groceries , each county has it's own taxes on purchases . You have your state tax superimposed on the county tax . So between 8 % to 11.5 % on sales often makes buying food lousy .Bay Area shoppers pay steeper prices at the grocery store than people who live much farther from farms. The fact that milk costs more in San Francisco than Washington, D.C., might, on the surface, be the most surprising finding. California, after all, produces more milk than any other state, and milk is highly perishable, meaning timing and temperature during transport are critical.However, only a small fraction of California's milk supply is kept fluid, with the vast majority converted to frozen or soft products like ice cream, yogurt, cheese and butter that can be more easily exported.And because milk prices are regulated and the commodity is relatively inexpensive, retail stores in California generally don't attempt to compete aggressively on the basis of milk prices.One confounding example is that of new regulations on the sale of eggs,  took effect in 2015. It's generally accepted that the rule, which will require more space for each egg-laying hen, will add costs at the farm level. But it remains to be seen what will happen to egg prices when what is currently a specialty product becomes the standard for everybody.Why are prices up to 40% too high across the board, why real wages are flat for most Americans for the past 40 years and why wealth is so obscenely concentrated in the hands of so few and why one of the greatest pits for your taxes in paying off interest on government debt to the private tax avoiding money changers? *** The 1.4 million people who left CA for other states is the NET domestic migration (migration between states). In other words, during that 8 year time frame, perhaps one million from other states moved to California, and 2.4 million left. And sadly, the people who left were the very people we need in CA -- the young, the educated, the entrepreneurial -- and the wealthy. (1)> California has the greatest number of overpriced cities on our list (nine), with San Jose the highest-ranking Golden State metro area (No. 4). In the San Jose-Sunnyvale-Santa Clara MSA, according to NAHB figures, only 26% of homes are affordable to families bringing home the median income of $101,300. (The median home sales price was $625,000 in Q4 2013.) “In areas in California where salaries are high, demand is high, and building activity is restricted, prices are high,” says Cynthia Kroll, chief economist for the Bay Area Association of Governments. Housing affordability is even worse in San Jose’s northern neighbor, San Francisco, where the median family making $101,200 can afford only 14.1% of local homes (median sales price for Q14 2013: $800,000) according to NAHB data. In fact, that ranks San Francisco dead last in terms of housing affordability among the cities we evaluated for this list. The only reason San Francisco comes out less overpriced than Silicon Valley is that greater San Jose’s lower home prices were offset with higher costs for daily expenses. Groceries are 20% above the national average (compared to SF’s 16.2%), utilities 24.2% (compared to 7.6% lower than the national average in San Francisco); Silicon Valley also has a slight advantages in transportation and health care costs. But we’ll admit that the difference in our scores for these places is fairly minimal.- 4th highest capital gains tax at 9.55 percent

***There’s a wide range of sales tax rates in California, some rates are increasing this week and if pending legislation is successful, the range will get even wider.Currently, sales tax rates range from as low as 7.5 percent in a few rural counties to as high as 10 percent in some cities.The state collects 6.5 percent – 4.1875 percent for itself, then another 2.3125 percent that it automatically sends to schools and local governments for specific purposes. On top of that, another .25 percent is collected for county transportation services and another .75 percent for city and county operations.(1)> When it comes to real estate, we know that Californians enjoy drinking from the gold cup of mania. Lusting over real estate seems to be as common as traffic on the 405. People in California have a deep rooted cultural and economic amnesia. I bet half the population has very little idea regarding the history of many cities in Southern California. Heck, most don’t even know where their drinking water comes from. So trying to discuss Fed policy, skewing based on investors, or market manipulation with a large portion of people is like talking to your dog about Hemmingway. Some people only understand “real estate goes up!” and when it doesn’t, they only understand “buying is bad!” California real estate is overvalued by most economic measures. Sure, people are willing to pay insane prices but they did this as well in 2006 and 2007 and people also paid crazy prices for tech companies in a previous delusion based boom. Investors are pulling back because they simply don’t perceive value at current prices. We are now seeing more reports putting a price on how overvalued the region is. Fitch Ratings and Trulia both point to SoCal as being massively overpriced. In fact, Fitch Ratings has Orange County overvalued by a whopping 30 percent. Congratulations to Orange County for being the most overpriced county in the entire United States.

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