Written by someone who doesn't live in CA. During real estate booms if Prop. 13 were removed, many families would have to sell their homes due to the property tax.

I was referring to the requirement of a two-thirds' majority to raise taxes by the State Legislature (as well as the requirement for a two-thirds' majority to actually pass a budget), but there is that, too. Of course, perhaps if you hadn't been so willing to prevent any property tax, you might actually have some decent muncipal services and a good public education system. You also might not have so much sprawl into fire-danger areas in SoCal.

The budget problems are caused by moronic politicians who like to spend lots of money on dubious programs. Further, CA has relied more and more on tax revenues that are volatile and linked to the business cycle and during fat years spend everything and then have to scramble in the lean years.

Yes, they've been highly reliant on income tax to cover their budgetary needs. You have no one to blame but yourselves for that, though; you wouldn't be so dependent on that for revenue if you hadn't completely crippled property tax (incidently, the main source of revenue for local and county governments, which means that they get to rely on hand-outs from the state for solvency).

They really ought to couple it with some tax reform in California, though - the reason the state is in its current crisis is because of the crippling effect of Proposition 13 on doing anything to raise tax revenue, while California voters are completely unwilling to give up services that requires that funding. Because of that, California has been forced to borrow more and more money over the years, holding it down during good economic times (when income tax revenue is high), and suffering in bad.

Written by someone who doesn't live in CA. During real estate booms if Prop. 13 were removed, many families would have to sell their homes due to the property tax.

The budget problems are caused by moronic politicians who like to spend lots of money on dubious programs. Further, CA has relied more and more on tax revenues that are volatile and linked to the business cycle and during fat years spend everything and then have to scramble in the lean years.

But there are some organizations for which higher interest rates on short-term credit is disastrous. They simply can't afford to pay more. Their business model is failing.

That's the situation with California. Tax hikes won't fix the state's problems. It's got to cut state payrolls. And there's no political will to do that.

Right. For example the union for the prison guards is notorious for getting sweetheart deals and having lots of political muscle. For example it isn't uncommon for the prison guards to negotiate contracts where they get pay increases at around 2x the rate of inflation.

The second is long-term solvency. There are businesses that are troubled by the higher cost or, in some cases complete lack of availability of short-term credit that are otherwise solvent.

But there are some organizations for which higher interest rates on short-term credit is disastrous. They simply can't afford to pay more. Their business model is failing.

That's the situation with California. Tax hikes won't fix the state's problems. It's got to cut state payrolls. And there's no political will to do that.

They really ought to couple it with some tax reform in California, though - the reason the state is in its current crisis is because of the crippling effect of Proposition 13 on doing anything to raise tax revenue, while California voters are completely unwilling to give up services that requires that funding. Because of that, California has been forced to borrow more and more money over the years, holding it down during good economic times (when income tax revenue is high), and suffering in bad.

Lending money to the states would seem like a no-brainer, regardless of one’s views of bailing out/rescuing the big banks.

Unless it's to states like California.