View Full Version : California Continues to Lead The Way
Melonie
11-11-2009, 12:50 PM
All political overtones aside, where dancers are concerned these facts remain in regard to NYC and surrounding area clubs ...
both high roller and upper middle class club customers are going to take a major hit on state / local income tax increases on January 1st. So enjoy the big Wall St. Christmas Bonus money
Both high roller and upper middle class club customers are going to ( or are already ) taking a major hit in the form of property tax increases. This extends not only to NY but also to NJ and CT. Again not good for 'discretionary spending' budgets i.e. lap dances.
Both the NY state tax agency and the NYC tax agency have added staff to allow for more audits. Following the IRS lead of establishing a new targeted enforcement unit for 'adult businesses', it is very likely that strip clubs and their workers will be facing a higher probability of audit than ever before. The 'Tens' tax situation and former 'Scores' tax situation have definitely given the state and local tax agencies an idea of how much additional tax money might possibly be found by auditing / investigating strip clubs. I don't know specifics about NJ and CT, but they are both hemmoraging money in terms of state budgets thus have equal motivation to start 'flipping over VIP room couch pillows' as Eric posted.
Eric Stoner
11-11-2009, 12:56 PM
A couple more cheery thoughts - Given the current hostility to small business:
Chances of N.Y.C. strip clubs hiring more dancers ?
Chances of a new club opening in N.Y.C. ?
Rotflmao ! Fuhgeddaboudit ! I'd look for a rash of club CLOSINGS !
Melonie
11-11-2009, 01:05 PM
well, in keeping with the original topic, California clubs, dancers and customers will probably share in the same sort of 'revenue enhancement' measures on the part of the Cal Franchise Tax Board. There's also the potential issue of the California court ruling that all dancers in the state must be treated as statutory employees might actually be enforced ( I don't even want to speculate on the potential fallout to clubs and dancers )
And Cal club customers are already getting hit with a 10% across the board increase in state tax withholding, leaving less 'discretionary spending' money available for club trips and private dances. While this overwithholding is supposed to be refunded to Cal taxpayers next year, I'd hold off on 'counting any chickens' because Cal has already resorted to issuing IOU's in place of real money !
Eric Stoner
11-11-2009, 01:11 PM
well, in keeping with the original topic, California clubs, dancers and customers will probably share in the same sort of 'revenue enhancement' measures on the part of the Cal Franchise Tax Board. There's also the potential issue of the California court ruling that all dancers in the state must be treated as statutory employees might actually be enforced ( I don't even want to speculate on the potential fallout to clubs and dancers )
And Cal club customers are already getting hit with a 10% across the board increase in state tax withholding, leaving less 'discretionary spending' money available for club trips and private dances. While this overwithholding is supposed to be refunded to Cal taxpayers next year, I'd hold off on 'counting any chickens' because Cal has already resorted to issuing IOU's in place of real money !
I thought I was within the scope of the original topic. California led the way and N.Y. is following its lead.
Deogol
11-11-2009, 01:14 PM
I guess posts at the end should include a paragraph of implications for the business. Might not be a bad idea actually.
Melonie
11-11-2009, 03:15 PM
^^^ This is a point that I have been pondering for the past day ever since Paris posted about relevance to dancers. Trying to put things in perspective, some of us have been dealing with business model analysis and projections, savings and investments, business accounting, personal and business taxes, etc. for so long that we might have lost sight of a few basics ...
- thanks in part to our wonderful school system, many young dancers may have never been exposed to a whole lot of information on personal finance, business finance, taxes, investments etc.
- many dancers ( and unfortunately many of the owners of the clubs they work at ) have not taken the time to figure out what sort of people make up the club's customer base, thus what sort of economic issues are likely to impact their customers incomes and as a result their own dancing incomes.
- thanks again to our wonderful school system, a large number of Americans have never been taught to 'follow the money' or 'connect the dots' in terms of cause and effect.
To try and bridge this gap, I am going to try and make a deliberate effort to connect the underlying economic issues involved in Dollar Den threads to the dancers' 'real world'
Eric Stoner
11-12-2009, 11:45 AM
Something for NYC dancers to ponder- Robert Benmosche, CEO of AIG is in a major brawl with Ken Feinberg ( Obama's Wall St. Pay Czar ) over limits on executive pay. Banks including Goldman Sachs and other TARP recipients are poised to issue multi-million dollar bonuses. Bonuses that will be spent, at least in some small part, in strip clubs.
Do you want the government deciding who gets paid how much ?
Melonie
11-12-2009, 12:41 PM
^^^ well, a more painful speculation is that NYC and London financial industry 'headhunters' are already starting to draw high priced talent away from Wall St. firms .... where their pay and bonuses are potentially subject to gov't limitation .... and placing them in higher paying and virtually unregulated financial industry jobs in Singapore. Hong Kong, Shanghai, Dubai etc. Big interview on this subject on Bloomberg TV. If this trend continues, NYC dancers will need to get a passport in order to find their former high rolling customers !
Eric Stoner
11-12-2009, 01:29 PM
^^^ well, a more painful speculation is that NYC and London financial industry 'headhunters' are already starting to draw high priced talent away from Wall St. firms .... where their pay and bonuses are potentially subject to gov't limitation .... and placing them in higher paying and virtually unregulated financial industry jobs in Singapore. Hong Kong, Shanghai, Dubai etc. Big interview on this subject on Bloomberg TV. If this trend continues, NYC dancers will need to get a passport in order to find their former high rolling customers !
Precisely.
Melonie
11-15-2009, 07:21 AM
another interesting blurb on ( future ) California economics ...
(snip)"One thing that I always hear from people across a wide range of the political spectrum is that we need more ‘financial literacy.’ In so much as there are products or practices out there that may be harming consumers, the best way to fight them is to make sure consumers are ‘financially literate.’ This is always something that is easy and good to say."(snip)
(snip)"One way to investigate this is to see who the academic gatekeepers are on this body of knowledge and see what they say. If you want to think critically about any subject, one looks for the departments where people with expertise study it, and see where the debates are. And one thing I notice about ‘financial literacy’ is that it doesn’t exist in economics. Or anywhere else.
California has been considering taking its one-semester required course in economics for high school graduation and splitting it with a personal finance class. A panicked high school economics teacher wrote to Greg Mankiw, and he responded on his blog:
I agree with this teacher that this law would be a step in the wrong direction. The legislation is akin to requiring high school biology teachers to spend half their class time on issues of personal health and nutrition. Personal finance is a useful life skill, but students need a more thorough grounding in other basic economic principles than what can be learned in the other half of a single semester course. They need a framework to think about such topics as market outcomes, price controls, taxes, international trade, environmental regulation, monetary and fiscal policy, and so on. The goal of high school economics should be to produce not just smarter decision makers at a personal level but better informed voters on election day.
(For the David Harvey fans in the audience, please do note that the last sentence makes clear how much of a specific political project Mankiw considers this, akin to hypothetical Marxist English professors talking about “consciousness raising” their students.)
Time students spend in class is a scarce resource, and I’ll leave it up to you to decide whether or not it is a better idea to beat kids over the head with the idea of compounding interest versus getting them to mimic just enough calculus to reproduce the Slutsky equation on a test. But do note that an economist studying ‘personal finance’ is a subject akin to a biologist studying something that is not biology; it’s not within the discipline. (snip)
from
hey folks, you can't make up stuff like this !
~
Eric Stoner
12-30-2009, 09:40 AM
Before the recession hit California had a multi-billion dollar deficit. Now it is Ten ( 10 ) BILLION dollars. They raised sales taxes and now sales tax revenues are DOWN $300 million a year.
They raised personal income taxes and those revenues are DOWN $4 billion. Corporate taxes were left alone and they are actually up.
Stimulus funds ? They created and saved jobs in downtown Sacramento.
New York is no better. The dithering disfunctional legislature has left a deficit of $19 billion unresolved.
Both are object lessons for the rest of the country. Tax increases do NOT solve fiscal problems. Not all state fiscal problems were caused by the recession. Both had serious fiscal deficits well before the Wall Street crash. Both are caused by out of control SPENDING.
Cap and Trade ? California has had Cap & Trade for years. Conservatively it has cost California two ( 2 ) million jobs. Nationally that extrapolates out to at least eight ( 8 ) million.
Deogol
12-30-2009, 01:12 PM
Before the recession hit California had a multi-billion dollar deficit. Now it is Ten ( 10 ) BILLION dollars. They raised sales taxes and now sales tax revenues are DOWN $300 million a year.
They raised personal income taxes and those revenues are DOWN $4 billion. Corporate taxes were left alone and they are actually up.
Stimulus funds ? They created and saved jobs in downtown Sacramento.
New York is no better. The dithering disfunctional legislature has left a deficit of $19 billion unresolved.
Both are object lessons for the rest of the country. Tax increases do NOT solve fiscal problems. Not all state fiscal problems were caused by the recession. Both had serious fiscal deficits well before the Wall Street crash. Both are caused by out of control SPENDING.
Cap and Trade ? California has had Cap & Trade for years. Conservatively it has cost California two ( 2 ) million jobs. Nationally that extrapolates out to at least eight ( 8 ) million.
It takes a knowledge of math to know what an inflection point is and no matter how big one makes the range it still goes down down down after it initially went up.
Learning math the hard way is expensive and painful - like many mortgage holders have discovered.
Melonie
01-01-2010, 09:56 PM
Learning math the hard way is expensive and painful - like many mortgage holders have discovered
^^^ especially true when the 'formulas' which are being 'taught' by the supposed experts i.e. gov't, banks etc. aren't actually correct or complete !!!
Even more true when the 'formulas' which are being 'taught' rely on supposedly reliable 'rules of thumb' i.e. real estate valuations ALWAYS go up, that next year's mortgage interest rates can't / won't change much from this year's mortgage interest rates, that the 'equivalent cash value' of the mortgage interest tax deduction won't be overridden by AMT, etc.
They raised sales taxes and now sales tax revenues are DOWN $300 million a year.
They raised personal income taxes and those revenues are DOWN $4 billion. Corporate taxes were left alone and they are actually up.
in reality, this realization doesn't require a whole lot of math knowledge ... just a bit of knowledge about human nature and US history !
Eric Stoner
01-12-2010, 10:00 AM
According to Kevin Starr, author of a multi-volume history of California, it is on the verge of becoming an American "first" - a failed state. California's excessively progressive income tax has caused at least 3 and as many as 4 million more Americans to move out of
California than have moved in. Only one sixth the normal number of new faculty have been hired at U.C. Berkeley. Some will see the justice in this as U.C. Berkely helped incubate many of the ideas and quack nostrums for solving such perceived social ills as unequal results in earning and creating wealth aka the "game of life". The Cal State system ( not to be confused with the University of California ) will enroll 40,000 fewer students than last year.
The California Tax Code causes the business cycle to have enhanced effect on California's revenues. When times are good, revenues go up prompting increased spending. However when a recession hits, revenues go down but spending does not. If California's spending had simply kept pace with population growth and inflation, it would equal, on a per capita basis, that of Oregon. Overregulation and its resultant costs have caused Calfornia to lose 26 % of its factory jobs including 35% of its high tech manufacturing jobs from 1990 to 2007. High tech used to be California's pride and joy. Remember Silicon Valley ? California politicians loved to point to it with one hand claiming to have helped create them while helping to pass legislation to help kill it with the other.
Meanwhile California's generous welfare and health care benefits caused it to be an importer of Mexican poverty. And while California was bleeding private sector jobs , public sector jobs grew 24%. And those public employees are the nation's highest paid and get the most generous pensions.
It is simply a matter of time before the state is completely bankrupt. Then what ? Obviously a Federal bail-out will be called for. Citizens of fiscally responsible states are going to be expected to see their tax money go to support California's spendthrift ways. What ought to happen is let the state go bankrupt; tear up the contracts and start anew. Obama cannot let this happen. AFSCME and his other union supporters will have conniptions to rival the recent ridiculous protests at Berkeley. At the protests some 5,000 partially educated and fully indoctrinated U.C. Berkeley students came up with such brilliant ideas as "nationalizing all universities", a "socialist revolution"; a "tent city in Sacramento"; occupying the Wells Fargo Bank building and of course a General Strike.
First it was the banks; then GM and Chrysler and now it is several states seeking Federal money to try and avoid bankruptcy. In the midst of the Great Depression , FDR was complaining that the economy was not responding to his high tax and big spending policies. He said that : "Capital has gone on strike". In California, capital has been "on strike" for decades in the private sector. In the public sector, sanity has been "on strike" for even longer. They don't call it "LaLa Land" for nothing.
Melonie
01-12-2010, 04:32 PM
not to worry ... California has a 'magic' answer up their sleeve ... or so they think !
Of course, the unintended consequence that California politicians don't realize is that the legalization of pot will remove the vast majority of ( currently illegal ) profits for California's growers ... which in turn will remove a huge amount of 'below the radar' cash from California's economy.
Eric Stoner
01-13-2010, 08:06 AM
And New York thinks that legalizing UFC matches will help solve its structural deficit problems.
Deogol
01-13-2010, 12:11 PM
I suspect pot legalization will come with more invasive financial investigation tools as well reporting requirements. After all, it already is under the radar - why share it with the government if one is not already. The government will want tools (laws and regulations) to break into that economy.
Melonie
01-13-2010, 03:02 PM
^^^ well, it appears that California's front-runner attempt to involve the federal gov't in a tax revenue transfer scheme which would have forced federal taxpayers in Texas, Nevada and every other state to help fund California's increasing state budget deficit is dying ...
(snip)"Jan. 13 (Bloomberg) -- California’s hopes are fading for federal help in closing a projected $19.9 billion deficit that has caused the lowest-rated state’s borrowing costs to rise 24 percent since September.
“We recognize they have enormous problems,” David Axelrod, senior adviser to President Barack Obama, said in an interview. “But we can’t solve all of those problems from Washington.”
Investors are growing more concerned that California, whose debt rating was cut today by Standard & Poor’s, will repeat last year’s fiscal crisis that forced it to use IOUs to pay bills. With Governor Arnold Schwarzenegger seeking $6.9 billion in federal assistance to narrow the deficit, the extra yield paid on the state’s 10-year bonds over AAA-rated municipal securities rose to 1.31 percentage points yesterday from 1.06 points on Sept. 11, according to Bloomberg fair market value index data.
Schwarzenegger’s plea for help for California, the world’s eighth-largest economy, may become a test case for Obama, who last year called the Republican governor “an outstanding partner with our administration.” Dozens of states face budget shortfalls amid the worst recession since the Great Depression, and at least 36 have already reduced fiscal 2010 expenditures, according to the National Association of State Budget Officers.
‘Huge’ Concern
“There’s a huge amount of concern about California,” said Howard Cure, who helps handle municipal-bond investments for Evercore Wealth Management in New York, which oversees $1.5 billion. “There’s a relatively large reliance on hoping that the federal government will send extra money their way. It’s going to be very politically difficult for that to happen.”
Schwarzenegger, 62, will visit Washington next week to make his case to members of the Obama administration and California’s congressional delegation, the governor’s press secretary, Aaron McLear, said today. He didn’t say if Schwarzenegger had requested a meeting with the Democratic president.
The governor wants Obama to reduce required programs, waive rules and provide additional funding. In recent days, Schwarzenegger stepped up his campaign for “fairness,” focusing much of his Jan. 6 State of the State speech and Jan. 8 budget address on appeals for a greater share of federal money.
“It is unfair the way the money is being distributed right now,” he said on NBC’s “Meet the Press” on Jan. 10.
“The federal government is forcing us to spend money we don’t have,” Schwarzenegger said in the speech outlining his $82.9 billion spending plan for the fiscal year beginning July 1, speaking of education requirements and costs associated with detaining undocumented immigrants. "(snip)
However this eventually turns out, it is likely to establish a precedent for ALL states who no longer have the tax base / tax revenues to be able to meet federal mandated state spending on social welfare programs / medicaid programs / education / gov't contractor pay rates and a host of similar areas where the feds mandate that states spend X dollars but do not assist in sourcing those X dollars to the state.
One potential outcome is that federal money transfers don't happen, states are still required to fund federally mandated program spending levels, and unbelievable tax increases are leveed on anyone still working / still in business.
Another potential outcome is that federal money transfers don't happen, but states are allowed to reduce their funding of federally mandated program spending to levels that are sustainable with existing state tax revenues ... meaning wholesale cuts in gov't employee paychecks, wholesale cuts in welfare / medicaid benefits / unemployment benefits, as well as a major trimming of state gov't employee head count.
Yet another potential outcome is the state declaring bankruptcy ... which will send state muni bond owners running for the exits and make it impossible for the state to borrow additional money ... which will result in the wholesale firing of gov't employees and contractors ... which could stop altogether welfare / medicaid / unemployment checks being sent out
in other words, the fit is about to hit the shan for California.
Eric Stoner
01-14-2010, 10:04 AM
Schwarzenegger is full of spit.
The Federal government never mandated a bloated university system that undercharged state residents for tuition.
California was never required to overpay its state employees and give them overly generous pension benefits.
It was never required to provide more than basic medical emergency stabilization to illegal immigrants. Likewise California decided to have one of the most generous Medicaid systems in the country.
The Federal government never required California to impose a Cap & Trade system.
Nobody told California to have one of the highest income tax rates in the country completely out of whack with immediate neighbors like Nevada and Arizona. California drove out taxpayers and business all by itself.
The Federal government did not help the Prison Guard union take over Sacramento to maintain a bloated and expensive prison system.
Nobody required past governors and legislatures to borrow billions to postpone the day of reckoning with its structural deficit instead of making the necessary cuts.
Melonie
01-23-2010, 02:45 AM
this very interesting analysis from Mike Shedlock ...
(snip)"
Why Is California Broke?
Inquiring minds are asking "Why Is California Broke?" It's a good question. Please consider ...
•California has the 3rd highest state income tax in the nation: 9.55% tax bracket at $47,055 and 10.55% at $1,000,000 - Tax Foundation 2010 State Business Tax Climate Table 2
•California has the highest state sales tax rate in the nation by far at 8.25%. Indiana is next highest at 7%. Table 15
•California corporate income tax rate is 3rd worst in the nation with a rate of 8.84%. - Table 2 and Table 8
•California ranks 13th in property taxes. Table 2
•California has the fourth highest capital gains tax 9.55%. - Capital Gains Tax Rates By State
•California has the highest gasoline tax as of January 2010, averaging 65 cents/gallon. The national average is 47.4% - API Motor Fuel Taxes
•California has one of the highest state vehicle license car taxes, 1.15% per year on value of vehicle, up from 0.65% in 2008.
So where's the money going?
•1 in 5 in LA County receiving public aid, nearly 2.2 million people as of February 2009. 20% in Los Angeles County receive public aid
•California has 12% of the nation’s population, but 36% of the country’s TANF (“Temporary” Assistance for Needy Families) welfare recipients – more than the next 8 states combined. Unlike other states, this “temporary” assistance becomes much more permanent in CA. July, 2009 California has more recipients in key welfare category than next eight states combined.
•California prison guards highest paid in the nation. The maximum pay of California's prison guards is nearly 40 percent higher than that of the highest-paid guards in 10 other states and the federal government, according to a study by the California Department of Personnel Administration. Cal-Taxletter
•California teachers easily the highest paid in the nation. National Education Association
•California now has the lowest bond ratings of any state, two steps above junk. The new rating affects about $72 billion of general obligation and lease-supported bonds. July 15 California bond rating cut again
•California ranks 44th worst in “2008 lawsuit climate.” Institute For Legal Reform
•California, a destitute state, still gives away college education at fire sale prices. California community college tuition is by far the lowest in the nation. Nationwide, the average community college tuition is 4.5 times higher than California CC’s. This ridiculously low tuition devalues education to students – resulting in a 30+% drop rate for class completion. Moreover, 2/3 of California CC students pay no tuition at all – filling out a simple unverified “hardship” form that exempts them from any tuition payment, or receiving grants and tax credits for their full tuition. [Expired Link]
•California offers thousands of absolutely free adult continuing education classes. In San Diego, over 1,400 classes for everything from baking pastries to ballroom dancing are offered totally at taxpayer expense. San Diego Continuing Education
•California residential electricity costs 13.81 cents per kilowatthour. The national average is 6.99-8.49. US Department of Energy
•It costs 38% more to build solar panels in California than in Tennessee – which is why European corporations have invested $2.3 billion in two Tennessee manufacturing plants to build solar panels for our state. March 5, 2009 More Solar Companies Producing Elsewhere to Sell to California"(snip)
from
Eric Stoner
02-05-2010, 08:49 AM
Another "I told you so" : A recent Rutgers University study documents the N.J. exodus of wealthy poeple.Some $70 billion in wealth has left N.J. between 2004 and 2008. Neighboring Pa. has only a 3% income tax rate. Fla. has ZERO. No surprise that those two states are the two leaders in absorbing N.J. tax exiles.
Another recent study has documented that State Pension plans are underfunded by at least $2 trillion. Inadequate contributions; stock market losses and losses in mortgage bonds, CDO's and CMO's have left many state pension funds in serious deficit. Add in another trillion
in underfunded health plans and we are set for a double whammy : Social Security and Medicare are both going broke and so are the state systems.
Deogol
02-05-2010, 12:58 PM
Another recent study has documented that State Pension plans are underfunded by at least $2 trillion. Inadequate contributions; stock market losses and losses in mortgage bonds, CDO's and CMO's have left many state pension funds in serious deficit. Add in another trillion
in underfunded health plans and we are set for a double whammy : Social Security and Medicare are both going broke and so are the state systems.
Maybe some of these silent stockholders like pensions and mutual funds will take more active management in the nonsense perpetrated by the boards and corporate officers of their investments. This whole "Well, you can always sell it if you disagree" retort has kinda worn it's welcome in the meltdown.
Eric Stoner
02-05-2010, 01:09 PM
Maybe some of these silent stockholders like pensions and mutual funds will take more active management in the nonsense perpetrated by the boards and corporate officers of their investments. This whole "Well, you can always sell it if you disagree" retort has kinda worn it's welcome in the meltdown.
It depends. The problem is a lot of investment advisors for pension funds are not selected on merit. Instead they're selected based on how much money they donated to whose campaign. Especially here in N.Y. I'm sure you've heard of "pay to play".
Some pension funds are well run and are active in asserting their rights as shareholders. Others are clueless or worse. A number of them were duped by the Triple A ratings of a lot of bonds that ultimately were undeserved. They also had a duty to maximize returns for the funds and the interest paid by many CDO's and CMO's were too good to pass up.
Melonie
02-07-2010, 07:25 AM
here's an interesting update to the California debt situation from a state financial expert who formerly handled the Orange County, CA bankruptcy ...
... the gist of which is that California is actually $540 BILLION in the 'hole' based on social welfare / entitlement program costs, state and local gov't employee payroll / benefit / retirement costs etc. - and thus irreversibly bankrupt in the absence of a federal bailout.
Eric Stoner
02-16-2010, 08:11 AM
Another reason why California and other states are or will be effectively bankrupt:
In New Jersey, a state worker retired at age 49. over the course of his career he paid a total of $124,000 into his pension and health plan. According to actuarial tables he will live an average of 30 more years or so. In that time he will collect $3.3million in pension benefits and $500,000 in health benefits. Many states have similar stones around their fiscal necks. The public employee unions fight tooth and nail against any modification to pension plans.
The Federal Government is facing a similar crisis in Social Security and Medicare.
See directorblue.blogspot and/or centraljersey.com
Melonie
02-26-2010, 04:02 AM
and here's an unofficial statistic in regard to California's business exodus ...
(snip)This imperfect and incomplete list of 100 moving-out-of-state events is the "tip of the iceberg" about the loss of commercial enterprises in California:
* Abraxis Health, a unit of Los Angeles-based Abraxis BioScience Inc., opened a new plant that will create 200 jobs in 2010 -- in Phoenix. This follows the company's Phoenix expansions that occurred in 2007 and 2008.
* Alza Corp. in 2007 eliminated about 600 jobs in drug R&D while also exiting its Mountain View, Calif., HQ. At the time the company said that its 1,200-person Vacaville facility will continue to operate. But the Vacaville Reporter on Oct. 23, 2009 revealed that the plant is being offered for sale by J&J, its parent company. It's unclear if more layoffs are in the facility's future.
* American AVK, a producer of fire hydrants and other water-related products, moved from Fresno to Minden, Nevada.
* American Racing moved its auto-wheel production to Mexico, ending most of its 47-year operation in California.
* Apple Computer has expanded in other states, most recently with a $1 billion facility planned for North Carolina.
* Audix Corporation relocated from Redwood City, Calif., and to accommodate growth moved to a 78,000-square-foot facility in Wilson, Oregon.
* Apria Healthcare Group of Lake Forest is shifting jobs from California to Overland Park, Kansas, a K.C. suburb.
* Assurant Inc. cut 325 jobs in Orange County and consolidated positions in Georgia, Ohio and South Carolina.
* Automobile Club of Southern California placed 1,100 jobs in Texas.
* Barefoot Motors, a small "green" manufacturer, moved from Sonoma and will grow in Ashland, Oregon.
* Bazz Houston Co. located in Garden Grove, has slowly been building a workforce of about 35 people in Tijuana. In early 2010 the company said it expects to move more jobs to Mexico, citing cost and regulatory difficulties in Southern California.
* Beckman Coulter, a biomedical test equipment manufacturer headquartered in Brea, relocated part of its Palo Alto facilities to Indianapolis, Indiana, two years ago. In early 2010, it's making a multimillion-dollar investment to expand and create up to 100 new jobs in Indiana. The company said the area offers a "favorable business environment and lower total cost of operations, plus a local work force with strong skills in both engineering and manufacturing."
* Bild Industries Inc., which specializes in business news, directories and market reports, moved to Post Falls, Idaho, from Van Nuys, a part of the San Fernando Valley in Los Angeles.
* Bill Miller Engineering, Ltd., suffering under the "hostile business climate" in California and Los Angeles County, moved from Harbor City to Carson City, Nevada.
* BMC Select has conducted an unusual relocation. The company, which had shifted its headquarters from Idaho to San Francisco, relocated its H.Q. back to Boise in January 2010. The building materials distributor said that regaining its footing in Boise retained access to high-quality employees while reducing wage and occupancy costs.
* BPI Labs, which formulates, manufactures, and fills personal care products for the health and beauty industry, relocated from Sacramento to Evanston, Wyoming, a move the company's owner called "very successful . . . . It felt good and I’ve never looked back.”
* Buck Knives after 62 years in San Diego moved to Post Falls, Idaho.
* CalPortland Cement has announced in late 2009 closure of its Riverside County plant because of new environmental regulations from a state law (AB 32). The company's CEO wrote, "A cement plant cannot be picked up and moved, but the next new plant probably won’t be built in California meaning more good, high paying manufacturing jobs will be lost to Nevada or China or somewhere."
* California Casualty Group left San Mateo for Colorado, cutting operating costs to remain competitive.
* CalStar Products Inc., headquartered in Newark, Calif., in the San Francisco Bay Area, in January 2010 was awarded $2.44 million in federal clean energy tax credits. The company said in the future it expects to build additional plants in the Mississippi Valley and the East Coast. In late 2009 CalStar opened a plant in Caledonia, Wisconsin.
* Checks To-Go moved to Utah where workers' comp rates helped make the troubled company healthier.
* Chivaroli & Associates, a healthcare-related insurance service based in Westlake Village, Calif., moved a regional office to Spokane, Washington.
* CoreSite, A Carlyle Company, is delaying a Santa Clara project while it expands its data center in Reston, Virginia.
* Creators Syndicate may flee L.A. because it operates like a “banana republic.”
* Creel Printing Left Costa Mesa for Las Vegas and SoCal loses 60 more jobs.
* Dassault Falcon looked at building an aircraft services facility in Riverside County but instead located in Reno.
* DaVita Inc. moved its HQ from Los Angeles to Denver; expects to see millions of dollars in savings over time.
* Denny’s Corp. – the large restaurant chain – once had its headquarters in La Mirada, later in Irvine, Calif, and then moved to Spartanburg, South Carolina. In fairness, I note the move occurred in the early 1990s. However it's noteworthy because the company was founded in California and its growth over time created HQ jobs in another state.
* Digital Domain, the Academy-Award-winning visual effects studio based in Venice, Calif., placed new studios in Vancouver, British Columbia, and Port St. Lucie, Florida, which combined will have about 500 employees. The facilities will allow the company to reduce costs while continuing to deliver cutting-edge work.
* Ditech, headquartered in Costa Mesa, announced in January 2010 a 269-job cut and is moving most activities to the GMAC Financial Services (parent company) headquarters in Fort Washington, Pennsylvania. In 2007, Ditech relocated some workers from Costa Mesa to Phoenix. A once robust Costa Mesa facility employing hundreds will be down to 20 or 30 workers.
* DuPont Fabros Technology suspended a $270 million Santa Clara data center project in favor of one in Ashburn, Virginia.
* eBay, based in San Jose, will create 450 jobs in Draper, Utah, in a new $334 million operations, customer support and data center.
* EDMO Distributors, Inc., a world-wide wholesaler of aircraft avionics, test equipment, and pilot supplies, moved its HQ from Valencia, Calif., to Spokane Valley, Wash. Since, it has built a larger headquarters in the city's Mirabeau Point community complex.
* Edwards Lifesciences based in Irvine will expand with 1,000 employees – not in California but in Draper, Utah.
* EMRISE Corp. completed its HQ move from Rancho Cucamonga to Eatontown, NJ, in May 2009. The company said the move "will result in additional annualized cost savings of approximately $1 million and facilitate improvements in operating efficiency. . . . The cost savings associated with relocating our corporate headquarters will start immediately. . . The aggregate total of these expense reductions will increase our profitability and cash flow in this and succeeding years and, over time, substantially improve our ability to further reduce our long term debt.”
* Facebook, based in Palo Alto, will expand in a major way in Oregon by locating a custom data center in Prineville. It will be a 147,000-square-foot facility costing $180 million and will employ 200 workers during construction and another 35 full-time once operating in 2011.
* FallLine Corporation Left Huntington Beach, where they were being "hammered" with multiple governmental regulatory fees, for Reno, Nevada.
* Fidelity National Financial left Santa Barbara for Florida, spurred by California's "oppressive" business environment.
* First American Corp., based in Santa Ana, will open a call center in March 2010 not in California but in Phoenix, where it expects to employ about 400 people within two years.
* Fluor Corp. moved its global headquarters from Aliso Viejo to Irving, Texas, with about 100 employees asked to relocate while the company planned to hire the same number there. In 2006, when Fluor moved into its new headquarters building, a company statement said: "The official dedication had a decidedly Texas theme" as a horseshoe was raised on the building, a time-honored Texas tradition.
* Foxconn Electronics, a large contract electronics maker, moved some of its Fullerton operations to Dallas.
* Fuel System Solutions moved its headquarters from Santa Ana to New York.
* Gregg Industries, owned by Neenah Enterprises Inc. in Wisconsin, closed a 300-employee foundry in El Monte foundry under pressure from the South Coast Air Quality Management District to make $5 million in upgrades. The company didn’t want to make the investment in the difficult economic climate so it decided instead to leave the state."(snip)
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loveyonetwo
02-26-2010, 06:24 PM
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Melonie
02-26-2010, 08:07 PM
Honest opinion ... 2013 in the absence of the aforementioned federal bailout ( which has now been unofficially rebuffed by Washington DC ) !
And things are probably going to get noticeably worse in the intervening years as California's deteriorating credit rating and deteriorating business income tax revenues/ worker salary tax revenues / sales tax receipts finally force major cuts in state spending levels regardless of whether state politicians vote to cut spending or not.
Deogol
02-26-2010, 11:35 PM
They are already rioting at Berkley!
Melonie
02-27-2010, 05:16 AM
Well, one California city figured out a way to keep from going bankrupt ... by charging residents TWICE for the same public service. Of course, the city didn't bother to explain this to residents ....
(snip)"During the most recent Federal Reserve–engineered economic bubble, state and local governments made extravagant promises to their tax-feeder constituencies regarding pensions and other benefits. Now that the bubble has burst, sales and property taxes – once a mighty, roaring river of revenue – have been reduced to a thin, pathetic trickle.
This comes at a time when, as the New York Times reports, there is "a $1 trillion gap between what all 50 states have promised their workers [sic – a more accurate description is "employees"] and what they have set aside."
As the economic crisis deepens, how will state and municipal governments continue to provide for their most cherished constituency – those who live by plundering the productive?
Wendy McElroy highlights one approach being pioneered by the town of Tracey, California: The city will now impose a surcharge on emergency services that have already been paid for through taxes. Residents of that city will be charged $300 for the fire department to respond to a medical emergency; non-residents will be billed $400 for the same service. There is the option of paying an annual $48 fee for "premium" 911 service.
Note carefully that this is not privatization. Taxes will still be extracted, but tax victims will now have the privilege of paying twice for the same services. If you're a Tracey resident and see someone having a heart attack, McElroy wryly comments, "you should quickly set a trash bin on fire. Otherwise, by calling for help, your monthly budget may not stretch to include mortgage or food." Tracey's political class simpers that the city government is running a $9 million budget deficit. Interestingly, that is exactly the amount spent each year on employee pensions.
Rather than renegotiating those benefits, the city government is putting the screws to economically burdened tax victims, and doing so in a way that is going to cost the lives of some of them. "Forget that phone bills already include a charge to cover 911," continues McElroy. "Forget that property taxes already assist with those costs. The politicos don't care. They want your money. And they will let people die – many of them elderly poor – rather than deliver services for which they have already been paid."(snip)
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Melonie
03-08-2010, 04:50 AM
here's a different wrinkle re impending doom for a cornerstone California industry ...
(snip)"March 8 (Bloomberg) -- In California’s Napa Valley, producer of the most expensive U.S. wines, 2010 may be a vintage year for foreclosures as the industry is squeezed by falling land values and a consumer shift to cheaper brands.
As many as 10 wineries and vineyards in Napa will change hands in distressed sales or foreclosures this year and next, up from none in 2008, according to Silicon Valley Bank. In a bank survey of vintners, 7 percent called their finances “very weak” or “on life support.”
“We have 250 vintner clients saying this downturn is the worst in 20 years,” Bill Stevens, manager of the bank’s wine division in St. Helena, California, said in an interview. “Anybody who was late to the party won’t have staying power.”
Land values in Napa, home to about 400 producers, have fallen 15 percent from the 2007 peak, driven in part by slumping demand for high-end wine, said Robert Nicholson, principal at International Wine Associates, a consulting and financing firm in Healdsburg, California. The decline makes it harder for owners to refinance mortgages, especially if the property is worth less than the loan.
Napa winery and vineyard loan defaults rose fourfold to 18 in the year through January, according to San Diego-based research firm MDA DataQuick. In the survey by Silicon Valley Bank, whose clients are mostly high-end West Coast wineries, 71 percent of respondents said credit is harder to get.
The recession has set in motion a “secular change,” with budget-conscious consumers trading down to less expensive wines, said Peter Kaufman, managing partner at Pleasanton, California- based Bacchus Capital Management LLC, a private-equity fund that provides mezzanine financing to wineries.
Sales Fall
The dollar value of U.S. retail wine sales dropped 3.3 percent to $29 billion in 2009 after rising every year and almost tripling from 1991 through 2008, according to Gomberg, Fredrikson & Associates in Woodside, California. Though consumption increased 1.9 percent to 323 million cases last year, people are buying less expensive labels, the industry consultant said in a March 5 report.
Sales of super-premium bottles priced more than $15 declined 10 percent last year, and those over $30, defined as ultra-premium, fell at least 15 percent, according to Rabobank Nederland NV, the Utrecht, Netherlands-based bank that finances agriculture businesses. Napa and neighboring Sonoma are the top U.S. producers of premium wine, the bank said.
“No more is it about stocking wine cellars with 5,000 bottles of Screaming Eagle,” said Bacchus Capital’s Kaufman, referring to a Napa “cult cabernet” that can sell for $750 or more a bottle. “High-rollers are discovering that there are lots of drinkable $20 to $40 bottles of wine.”
Cheaper Imports
Super-premium wineries are likely to bear the brunt of changing consumer habits, and lenders will pressure clients who can’t cover costs to “seek solutions before the loan goes into default,” Rabobank said in a January report.
Cheaper imports from countries such as Chile, Argentina and Australia are cutting U.S. winery margins, according to Stephen Rannekleiv, lead analyst on the Rabobank report.
“Consumers are looking at price point and saying that Napa is not the price they want to be buying at,” New York-based Rannekleiv said in an interview. “Wine prices drive grape prices drive land prices.” "(snip)
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It's interesting to note that rising property taxes comprise a MAJOR cost component for wineries ( as well as other agricultural industries I suppose ).
It's also interesting to note that the 'WalMart Effect' is now affecting the buying decisions of a large number of wine conoisseurs.
Melonie
03-08-2010, 01:25 PM
In fact, Barrons magazine just came out with this update on tax free / tax credit bearing investments for 'uber-rich' Californians able to afford the $50,000+ buy in price of such investments ...
(snip)"Back in the U.S., California may have to pay nearly as much as Greece -- upwards of 6% on a 30-year maturity. But there's a significant difference. California's GOs' interest will be exempt from federal taxes, and for investors in the state, exempt from California's stiff income levy. For affluent Californians facing a 40% combined federal and state tax rate, a 6% yield on a double-exempt bond would be equivalent to a 10% return on a taxable bond.
Ten percent would be a yield appropriate for a corporate junk bond. And in the view of many, California qualifies as a junk credit. The ratings agencies, for what it's worth, still put the state in the investment-grade range: Baa1 by Moody's Investors Service, single-A-minus by Standard & Poor's, and triple-B by Fitch Ratings.
Whatever some might say, California isn't a junk credit. It is, after all, the world's eighth-largest economy, dwarfing many other sovereign debtors, including Greece, which is small even within the European Union.
Moreover, for California to default on interest and principal payments on its GO debt is all but unthinkable. As often trumpeted, debt-service payments on California take precedence over everything other than payments for schools under the state's constitution. Even so, "California is role model for how not to manage a large state," says Howard J. Cure, director of municipal research at Evercore Wealth Management, which manages $1.6 billion for high net-worth individuals.
The state's problems are traceable to its dependence on volatile high-income and capital-gains taxes, which drive wealthy taxpayers out of state; lack of rainy-day reserves; an unaffordable, generous safety net for citizens; the need for a two-thirds majority in the legislature to raise taxes; and the initiatives process that sets constitutional requirements without providing funding. As a result, Cure thinks further downgrades are likely in California GOs, even though the state's economy is showing signs of recovery.
Ken Woods, head of Asset Preservation Advisors in Atlanta, thinks the state's bonds are "money-good." While they trade about 150 basis points over the triple-A municipal yield curve, which equates to about 4.50% in 10 years and just under 6% in 30 years, he thinks there's better value in the bonds at a spread closer to 200 bps. At their widest last year, 10-year California GOs only got to about 170 basis points over the triple-A muni scale, says Evercore.
For investors looking for California credits, Cure prefers essential-service enterprises, such as water, sewer and public-power bonds, which aren't dependent on Sacramento; selected sales-tax bonds; bonds from the world-class University of California system (but avoid the California State University and school-district issues); and stronger cities and counties, although the state is likely to shift expenses to them; and community colleges."(snip)
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Deogol
03-08-2010, 10:01 PM
^^^ No fucking way would I do it! That place is going to be popping up bankruptcies like warts on a toad's back!
Eric Stoner
03-09-2010, 09:16 AM
I repeat my recommendation that investing in "revenue" bonds is safer than G.O. bonds. Such bonds are backed by a guaranteed stream of revenue like a specific tax or tolls as opposed to the state's promise to repay them.
Melonie
03-09-2010, 10:47 AM
^^^ thus the embedded investor recommendation in my link for 'uber-rich' Californians to consider investing in California municipal water / sewer / electricity bonds ... which pay 6%+ interest earnings that is 100% free of federal or California state income tax liability, with those interest payments being financed by ( higher ) water, sewer and electric rates being charged to California customers.
Eric Stoner
03-10-2010, 01:17 PM
Following California's lead, Lt. Governor ( and soon to be Governor) Richard Ravitch has proposed that N.Y. BORROW it's way to a balanced budget !!!! I am NOT making this up. Kafka, Voltaire or Swift could not write anything more absurdist.
Ravitch has been a documented failure at almost every step in his career. He is somehow being credited for helping N.Y.C. avoid bankruptcy in the 1970's when it was Hugh Carey and Felix Rohatyn who did the heavy lifting helped by Federal loan guarantees. Afaic it was nothing laudable as N.Y.C. should have gone into bankruptcy.
He was appointed by Koch to run the N.Y.C.T.A. which hit its depths in crime and lousy service on his watch. He then went to work for the M.L.B. owners and almost singlehandedly forced the players into a strike .
He was APPOINTED Lt. Governor having NEVER been elected to anything in his life. Unlike Patterson, who despite the ethical quagmire he is currently drowning in, has tried to be a fiscal realist, Ravitch has come up with a cockamamie proposal to avoid budget cuts and tax hikes by borrowing additional billions at God only knows what interest rate. Amazingly the only friendly ear his proposal has gotten so far is that of Sheldon Silver, the Assembly Speaker.
Don't be surprised if the Legislature lets itself get talked into this crazy proposal. All they care about is getting reelected and postponing the necessary pain for a year or two is right up their alley. Of course, that money has to be paid back and N.Y.'s credit rating is already in the toilet. Republicans in Albany haven't been any more responsible than the Dems when it comes to spending.
Melonie
03-11-2010, 02:10 PM
^^^ yes, but the 'uber-rich' bankers / brokers / wealthy elite living in New York will be very thankful for the 6-7-8% TAX FREE interest they will be able to receive by purchasing the new NY municipal bond offerings !!!
Eric Stoner
03-12-2010, 08:38 AM
^^^ yes, but the 'uber-rich' bankers / brokers / wealthy elite living in New York will be very thankful for the 6-7-8% TAX FREE interest they will be able to receive by purchasing the new NY municipal bond offerings !!!
Ummm. Maybe. What happened the last time N.Y.C. defaulted was A. It couldn't borrow and B. The face value of its bonds plummeted. Some were being bought at 10 cents on the dollar. Bear Stearns and a few others made millions and millions in the Mid- 70's by betting that N.Y.C. would recover and by buying N.Y.C. bonds at steep discounts. When the City did recover under Koch, they reaped the benefits by selling those bonds at near full value after years of collecting the interest.
Returning to the "Golden State", California is issuing $2 billion of new bonds the market for which is shaky at best. It's a serious question whether those bonds will be bought and at what interest rate.
What is killing California now are its out of control pension costs. Those costs have gone up 2000% in less than a decade; from $5.5 billion to $15 billion with a total of $120 billion in UNFUNDED future obligations. Just to meet current pension obligations, California has had to divert funds from the University of California. Tuition has gone up 32% and staff and teachers have had to be laid off. And there is worse to come.
The lion's share of Obama's "Stimulus" package went to the states to prevent lay-offs. That money is now gone and the multi-billion dollar structural deficits in such major states as California, N.Y., N.J., Illinois and Florida. We are already seeing the T.V. and newspaper ads from the gored oxes about to be laid off.
Their alternative is WHAT ????
2/3 of the states could balance their budgets right now by just paying their workers what private sector workers get. At some point, most will have to shift from funded pensions to some form of 401K program for retirees.
While technically states cannot go "bankrupt" like individuals, corporations and cities, they can go into receivership. There is one problem: While a receiver could tear up wage and health care contracts; lay off workers; collect and distribute tax levies etc.; the one thing that can't be touched is existing PENSIONS.
Melonie
03-12-2010, 05:05 PM
The lion's share of Obama's "Stimulus" package went to the states to prevent lay-offs. That money is now gone and the multi-billion dollar structural deficits in such major states as California, N.Y., N.J., Illinois and Florida. We are already seeing the T.V. and newspaper ads from the gored oxes about to be laid off. Their alternative is WHAT ????
... that's easy, and already being floated as a trial balloon --- a second federal stimulus package !!!
Eric Stoner
03-15-2010, 11:56 AM
... that's easy, and already being floated as a trial balloon --- a second federal stimulus package !!!
Which will do nothing but stimulate more debt and more unemployment and do nothing to address the structural deficits in the states and cities. It's just like buying drinks for the alcoholics and giving money to drug addicts.
Melonie
03-15-2010, 12:19 PM
It's just like buying drinks for the alcoholics and giving money to drug addicts.
Well, when the 'alcoholics' and 'drug addicts' comprise a large enough percentage of the electorate to win a majority vote, the politicians who supplied the 'alcohol' and 'drugs' usually get re-elected !
Melonie
03-20-2010, 04:11 AM
back on topic ... this latest survey is interesting !
(snip)"21% of small businesses on brink
March 12, 2010
By ELISE VIEBECK
A report released last week showed that 21 percent of California small businesses believe they will fold in the next three years. The annual survey, conducted by advocacy group Small Business California, revealed low confidence in the state’s business and political climate among business owners.
“That 21-percent figure is particularly shocking,” says Hauge, who also owns a small insurance firm. “That should be unsettling for policymakers.”
Other research confirms this trend. According to analysts at Equifax, a credit firm, bankruptcies among small businesses in California have increased 81 percent since last year.
Small Business California has conducted the survey since 2005. That year, 68 percent of respondents said California on the “wrong track.” This year, it was 83 percent. Those who believed that the business climate may improve over the next few years also sank this year — from 59 percent in 2009 to 37 percent — and 33 percent of respondents said that neither political party represented their interests.
According to the federal Small Business Administration, small businesses account for more than 60 percent of job creation in the United States every year. It estimates that are 3 million small businesses in California, two-thirds of which are sole proprietors."(snip)
(snip)"The cost of regulations to small business has been widely debated in California. The national Small Business Administration reported last year that small firms spend 45 percent more per employee than large firms to comply with federal regulations. More than half of that amount — roughly $3,296 per employee — is targeted at environmental programs, specifically. In 2006, during the lead-up to AB 32’s passage [ AB32 was California's state climate change law - sic ], commerce groups reported that the bill would cost $77 billion in lost revenue for small businesses."(snip)
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