Another reason to leave CA

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Submitted by EconProf on May 19, 2018 - 6:49pm

While many people are leaving CA because of its high cost of living, high taxes, lunatic government, etc., I predict a bigger factor in the future is TRAFFIC.
A few months ago I was in an outer suburb of Phoenix at 5:00 pm and had to drive to the opposite side of the city. Instead of taking the "belt" highway that surrounds Phoenix, I took the freeways going straight through town and never went below 50 MPH. Try doing that in any coastal CA city.

Submitted by spdrun on May 19, 2018 - 7:18pm.

The problem with living in Phoenix is that you have to deal with Phoenix people, climate, and dust :) Also, you were going against the initial commute direction (towards the city) and only going with the commute after crossing the city.

Submitted by EconProf on May 19, 2018 - 8:03pm.

spdrun wrote:
The problem with living in Phoenix is that you have to deal with Phoenix people, climate, and dust :) Also, you were going against the initial commute direction (towards the city) and only going with the commute after crossing the city.

Please explain your second sentence.
In half an hour, at 50 MPH, I went from one (far) side of the city to the opposite side, a distance of about 25 miles.

Submitted by NeetaT on May 19, 2018 - 9:30pm.

I think it all boils down to the massive / alarming increase in the transfer of wealth from the private sector to the public sector. One example is property tax. Although it comes out to approximately 1.25% of 80% of the assessed value when you include assessments and voter approved bonds, the average property tax in San Diego, CA. is approximately $600.00 per month. On Average, if a person is paying $2,000.00 in rent, at least $500.00 of that rent is property tax baked into the rent. Now do you think for a minute that the government is going to lower the property tax percentage to lets say 1/2% of 80% of the assessed value to make housing more affordable? Not on your life! The government in CA is absolutely bent on doing whatever it can to add on new taxes and increase existing taxes. The transfer of wealth from the private sector to the public sector is what's making people flee CA. The only reason that I am still in CA, is because my wife has a job that she can't seem to get away from.

Submitted by EconProf on May 20, 2018 - 6:34am.

NeetaT wrote:
I think it all boils down to the massive / alarming increase in the transfer of wealth from the private sector to the public sector. One example is property tax. Although it comes out to approximately 1.25% of 80% of the assessed value when you include assessments and voter approved bonds, the average property tax in San Diego, CA. is approximately $600.00 per month. On Average, if a person is paying $2,000.00 in rent, at least $500.00 of that rent is property tax baked into the rent. Now do you think for a minute that the government is going to lower the property tax percentage to lets say 1/2% of 80% of the assessed value to make housing more affordable? Not on your life! The government in CA is absolutely bent on doing whatever it can to add on new taxes and increase existing taxes. The transfer of wealth from the private sector to the public sector is what's making people flee CA. The only reason that I am still in CA, is because my wife has a job that she can't seem to get away from.

I agree with your point that CA property taxes are high, and are one more reason to leave the state, although I could quibble with the numbers you present.
While Prop 13 limits property taxes to about 1.25% of property values and limits annual increases to 2% per year, Californians still pay more than the national average.
A $200,000 house in nearby states could cost about $600,000 in San Diego. A property tax of 2% of value there will cost $4000 per year. The same house in San Diego will pay $7500 per year in property taxes.
These numbers are approximate, of course. But the point remains that even with Prop 13 "protections", Californians pay a lot in property taxes. And, BTW, Prop 13 is under attack and could well be altered in the years ahead.

Submitted by Escoguy on May 20, 2018 - 11:35am.

http://uipi.com/new/wp-content/uploads/2...

Big picture, we really don't have much to complain about.

For my property in California property tax is about 19% of my gross rental income.

Should go down over time as the property tax rises at 2% and rents likely faster.

Look at German property tax rates 2,6-3,5% by comparison along with 42% above 52K Euros or about $60K US for income taxes.

Bigger issue in US is how the money is spent. Public pensions are often concentrated in the hands a a few top insiders who can game the system.

Submitted by svelte on May 20, 2018 - 12:40pm.

In the 1970s my father, who is a staunch republican and very vocal critic of calif taxes, traffic, and politics, decided to put his money where his mouth was. He sold the house, changed jobs, and moved to the midwest that he spoke so fondly of.

He only lasted 3 years and once again sold his house, changed jobs, and returned to the same calif city that he left 3 years prior.

I respect him for chucking everything and being true to himself. I respect him even more for being able to admit when he was wrong.

I suspect many who leave cali reach the same fate. And if they don't, glad they found their happiness. I'm all for people leaving. :-)

Submitted by The-Shoveler on May 20, 2018 - 12:51pm.

What people don't say much is that despite a large number of out migration, the emigration and birth death rate keep California growing at about 1500 people per-day.

There seems to not be enough people leaving.

Submitted by The-Shoveler on May 21, 2018 - 8:43am.

I was reading an article where towns in Colorado and TX were complaining that they were becoming CA. LOL .

Submitted by FlyerInHi on May 21, 2018 - 9:56am.

The-Shoveler wrote:
What people don't say much is that despite a large number of out migration, the emigration and birth death rate keep California growing at about 1500 people per-day.

There seems to not be enough people leaving.

I also am all for people leaving. That helps to refresh the population.

And traffic is good. We need more traffic so urban planners density the cities and build public transport. I’ve heard people complain about traffic for ages, especially at UTC and Mission Valley. But San Diego is so much a better city today than decades ago.

Submitted by FlyerInHi on May 21, 2018 - 9:56am.

svelte wrote:
In the 1970s my father, who is a staunch republican and very vocal critic of calif taxes, traffic, and politics, decided to put his money where his mouth was. He sold the house, changed jobs, and moved to the midwest that he spoke so fondly of.

He only lasted 3 years and once again sold his house, changed jobs, and returned to the same calif city that he left 3 years prior.

I respect him for chucking everything and being true to himself. I respect him even more for being able to admit when he was wrong.

I suspect many who leave cali reach the same fate. And if they don't, glad they found their happiness. I'm all for people leaving. :-)

I also respect your father for admitting his error.

It’s very interesting that Republicans tend to move East. Economically, traffic and high house prices should be free market indication to them that California is desirable with more opportunities. I know quite few who have left. In fact, I know a family who, this year, sold a business and moved away. They simply couldn’t handle the competitive nature of California. They wanted to relax and retire, those lazy asses.
People whose core philosophy is hardwork and competition should not complain when more people come to cause more traffic and competition for resources. That’s the very time to put theory to work and up one’s game.

Submitted by outtamojo on May 21, 2018 - 5:15pm.

Outer suberb...going the opposite way?

Submitted by EconProf on May 23, 2018 - 5:09pm.

The-Shoveler wrote:
What people don't say much is that despite a large number of out migration, the emigration and birth death rate keep California growing at about 1500 people per-day.

There seems to not be enough people leaving.


Shoveler: You are correct that the population of CA is still growing, despite more Californian's moving out than other states' residents moving in. The apparent exodus is more than offset by immigrants, legal and illegal, coming to California, plus our high birth rate (large Hispanic population).
But we are not growing by much. Here are the last one year's population growth rate for CA compared to the states Californians may be moving to, according to WorldPopulationReview.com:

CA .61%
NV 1.96
AZ 1.53
WA 1.69
TX 1.41
OR 1.37

Submitted by The-Shoveler on May 24, 2018 - 6:29am.

Using Percentages is a little confusing.

In absolute population growth CA still beat most of those States (except maybe TX)

For OR 1.37 % of 4.1 million is a lot less than .61% of CA's 39 million.

Same for WA 7.4 million and AZ 7 million.

IMO Over the long term CA (the worlds 5th largest economy) will continue grow population and GDP very fast.

Submitted by spdrun on May 23, 2018 - 6:32pm.

EconProf -- why is population growth in an already-crowded area a good thing?

Submitted by FlyerInHi on May 24, 2018 - 9:48am.

spdrun wrote:
EconProf -- why is population growth in an already-crowded area a good thing?

More money and economic growth. Economies of scale and opportunities built upon themselves.

Plus, more population iin urban centers means less environmental degradation to virgin lands that don't need to be bulldozed over.

Submitted by FlyerInHi on May 24, 2018 - 9:47am.

EconProf wrote:
The-Shoveler wrote:
What people don't say much is that despite a large number of out migration, the emigration and birth death rate keep California growing at about 1500 people per-day.

There seems to not be enough people leaving.


Shoveler: You are correct that the population of CA is still growing, despite more Californian's moving out than other states' residents moving in. The apparent exodus is more than offset by immigrants, legal and illegal, coming to California, plus our high birth rate (large Hispanic population).
But we are not growing by much. Here are the last one year's population growth rate for CA compared to the states Californians may be moving to, according to WorldPopulationReview.com:

CA .61%
NV 1.96
AZ 1.53
WA 1.69
TX 1.41
OR 1.37

So it's not traffic. The reason for leaving is lack of population and economic growth perhaps?

Or one might also want to leave because of the increasingly diverse culture of California. For me, that's a positive. I love all the new restaurants.

Submitted by spdrun on May 24, 2018 - 2:22pm.

"Growth" is another word for a terminal disease. Stability is more important than growth for growth's sake.

Submitted by FlyerInHi on May 24, 2018 - 2:45pm.

GDP growth is Productivity + Population. As a long as we have tech innovators, we will do better than the rest of the country. Also our new immigrants are pretty entrepreneurial.

SPD, you should be living in Vermont or Montana. We don’t want growth for growth’s sake. But as long as there is business, we want to attract it our way. Plus innovation improves our lives.

Did you know that the pineapple was the food of royalty in the 18th century? Thanks to transport and refrigeration, everyone can now have a pineapple for $3.

Submitted by Ribbles on May 25, 2018 - 6:31am.

FlyerInHi wrote:
But as long as there is business, we want to attract it our way.

California is really bad at that. In fact it seems they actively discourage business. For one example among many, the $800 annual tax for incorporating. If you're even moderately savvy, you'll figure out you can do it in a state that welcomes that sort of thing for $10-20/year, have a corporate address in that state, and then stay here in CA to actually conduct business, but it's such an insulting money grab. And not a very bright one at that. Better to sell 20 widgets at $50 than one for $800.

Submitted by FlyerInHi on May 25, 2018 - 9:10am.

Ribbles wrote:
FlyerInHi wrote:
But as long as there is business, we want to attract it our way.

California is really bad at that. In fact it seems they actively discourage business. For one example among many, the $800 annual tax for incorporating. If you're even moderately savvy, you'll figure out you can do it in a state that welcomes that sort of thing for $10-20/year, have a corporate address in that state, and then stay here in CA to actually conduct business, but it's such an insulting money grab. And not a very bright one at that. Better to sell 20 widgets at $50 than one for $800.

A foreign corporation doing business in CA still needs to pay CA tax. Foreign includes out of state.

http://www.procopio.com/uploads/model/Bl...

Submitted by Ribbles on May 25, 2018 - 10:35am.

I stand corrected! It's even worse than I thought.

Submitted by svelte on May 26, 2018 - 8:29am.

FlyerInHi wrote:
EconProf wrote:

But we are not growing by much. Here are the last one year's population growth rate for CA compared to the states Californians may be moving to, according to WorldPopulationReview.com:

CA .61%
NV 1.96
AZ 1.53
WA 1.69
TX 1.41
OR 1.37

So it's not traffic. The reason for leaving is lack of population and economic growth perhaps?

Yep, those figures kind of disprove increase in traffic as the reason.

Another interesting thing about those numbers: They are all relatively close to each other, within about a percent. If they were spread across 5 or 10 percent, there would be a clearer trend.

Submitted by svelte on May 26, 2018 - 8:53am.

FlyerInHi wrote:

It’s very interesting that Republicans tend to move East. Economically, traffic and high house prices should be free market indication to them that California is desirable with more opportunities. I know quite few who have left. In fact, I know a family who, this year, sold a business and moved away. They simply couldn’t handle the competitive nature of California.

I found this article interesting:

http://www.cbs8.com/story/38253375/exodu...

Couldn't make it in San Marcos as an engineer? Seems to be more to the story than what is written...like what type of engineer.

Also looking him up he is in a Christian band, moving to Alabama's Bible Belt (as the family is doing) they seem to be flocking to people of similar inclinations.

Sort of in line with what you said above - Republicans moving east.

Submitted by svelte on May 26, 2018 - 8:53am.

dupe

Submitted by phaster on May 27, 2018 - 8:52am.

EconProf wrote:

NeetaT wrote:
I think it all boils down to the massive / alarming increase in the transfer of wealth from the private sector to the public sector. One example is property tax....

I agree with your point that CA property taxes are high, and are one more reason to leave the state, although I could quibble with the numbers you present.
While Prop 13 limits property taxes to about 1.25% of property values and limits annual increases to 2% per year, Californians still pay more than the national average.

A $200,000 house in nearby states could cost about $600,000 in San Diego. A property tax of 2% of value there will cost $4000 per year. The same house in San Diego will pay $7500 per year in property taxes.
These numbers are approximate, of course. But the point remains that even with Prop 13 "protections", Californians pay a lot in property taxes. And, BTW, Prop 13 is under attack and could well be altered in the years ahead.

FWIW

phaster wrote:

April 15, 2018 - 9:33pm

Quote:

That 'split roll' you heard about? Less a Prop. 13 fix than a pension bailout

Proposition 13, the landmark 1978 ballot measure credited with touching off a national anti-tax revolution, has never stopped being controversial. Critics say its cap on annual property tax increases and its two-thirds voting requirement for government bodies to impose new or higher taxes has hamstrung California and been a public policy disaster. That argument, of course, is undercut by the fact that — despite these obstacles — state residents still have among the nation’s highest overall tax burdens.

www.sandiegouniontribune.com/opinion/edi...

the preverbal straw that is going to break the camel's back is,... the "California rule" which implies the tax payers are the designated financial backstop for various corrupt/mismanaged pension portfolio(s),... said another way,... taxpayers are between a rock and a hard place WRT various debt obligations

NOTE local politicians and partisan supports of status quo public pension payouts, are silent on the root cause of the problem(s) (e.g. a 13th pension payment, not fully funding the pension in the first place, etc.) because they don't want to acknowledge the problem they themselves created

as I see things, its important to understand the various mechanisms that caused the problem in the first place, so that they can be addressed,... sadly it seems politicians seem to think that by avoiding the subject that somehow finances will somehow fix themselves,... IT WON'T

www.TinyURL.com/DifferentDay

if financial mismanagement which is the root cause of the problem is not addressed, IMHO we are going to see symptoms like homelessness AND prices of various "real estate" continue on an upward trend because those that can afford to live w/ an increased government burden will thrive (up to a point),... while those that cannot afford to live w/ an increased government burden will be crushed!

www.TinyURL.com/SanDiegoProp13

phaster wrote:

May 2, 2018 - 9:28am

FlyerInHi wrote:
CA renter wrote:

They want to protect their "tribe" (U.S. citizens, not necessarily race-based) from what they perceive as an attack on their culture, economy, religion, and way of life. That is a perfectly natural response to what they perceive as a rather vicious attack against them, and this belief is not unfounded...your (and Pri's and zk's) many posts provide ample evidence of what they're talking about.

Problem is that this has nothing to do with principles, merit and hard work. It’s a culture of entitlement that things will remain like you’re used to them.

Quote:

San Diego County Sues Pension for Not Cutting Benefits

Retirement association says enacting lower tier of benefits would be illegal.

https://www.ai-cio.com/news/san-diego-co...

what I still find unbelievable is past dishonest

www.TinyURL.com/SanDiegoSpikingPension

and dumb

www.TinyURL.com/PensionRebuttal

behavior WRT managing a pension portfolio,... which
created the problem(s) in the first place

Submitted by EconProf on May 27, 2018 - 11:33am.

Speaking of pension problems....

That is yet another reason to leave California. It is well established that our public sector CA pension systems are grossly underfunded, a result of overly generous pension benefits, super early retirement plans, and "kicking the can down the road" by failing to levy high taxes on current taxpayers.
But the math is catching up with CA, as we now face vastly higher taxes or reduced government services to pay for public sector retirees. Pension costs can eat up a quarter to a third of localities labor costs, up from a tiny amount a few years ago.
And this is with a buoyant stock market and booming economy feeding the investment income of those pension plans. Think what would happen if we had a normal recession, or a stock market cut in half (it has quadrupled from its low). How ironic is it that the Trump economy is currently propping up CA tax revenues such that they are exceeding past projections.

Submitted by spdrun on May 27, 2018 - 2:30pm.

And who says that CA can't default on those obligations if things get dire? Overpaid ex-cops are a very small voting bloc...

Submitted by FlyerInHi on May 27, 2018 - 3:32pm.

spdrun wrote:
And who says that CA can't default on those obligations if things get dire? Overpaid ex-cops are a very small voting bloc...

That and why leave at all? If the taxation gets too bad, then we can leave at that time and take our money with us. Even keep a second home in Callfornia. As long as CA is not primary and you don't derive income in CA, you don't need to pay income taxes.

People who depart now are giving up California income and real estate appreciation mainly because they "can't hang" in economic and social terms. Someone famous might tweet "Good riddance, LOSERS,".

Submitted by EconProf on May 27, 2018 - 4:28pm.

spdrun wrote:
And who says that CA can't default on those obligations if things get dire? Overpaid ex-cops are a very small voting bloc...

I wish it were that simple. But the courts have decided, due to something called "the California rule" that those promised pensions must be honored, no matter what the costs to local taxpayers. So the school districts and local counties and cities must drastically raise taxes or cut services and employees to pay the pensioners.

Submitted by FlyerInHi on May 27, 2018 - 7:56pm.

EconProf wrote:
spdrun wrote:
And who says that CA can't default on those obligations if things get dire? Overpaid ex-cops are a very small voting bloc...

I wish it were that simple. But the courts have decided, due to something called "the California rule" that those promised pensions must be honored, no matter what the costs to local taxpayers. So the school districts and local counties and cities must drastically raise taxes or cut services and employees to pay the pensioners.

So true. As more of the budget gets diverted to pensions, services will decline. But still no reason to leave now — maybe later. I believe economists say there’s an optimal point to everything.

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