California gone full. spiral

Breitbart: The bipartisan Legislative Analysts’ Office has announced that California’s 2015-16 personal income tax collection has fallen from a huge surplus to a $147 million deficit. The cause appears to be plummeting Silicon Valley capital gains and weakening tech employment.

The quick reversal of fortunes for the state budget is disturbing, since the California State Controller reported that personal income tax collections through December had been at a $1.276 billion surplus.

With a hot tech stock market through June of last year, California realized about $4 billion in “extra” one-time capital gains tax revenues for the 2014-15 fiscal year.

California politicians used to spend windfalls on the middle class. But since Brown was elected in 2010, the state’s middle class has shrunk from 46.7 to 43.5 percent of the population. Average incomes by 2013 had fallen by $5,255, and those spending at least 30 percent of income on housing leaped by 20 percent to 44 percent of state residents.

Pension costs are rising and will consume 38% of the education budget.   Pension costs rise too fast and local governments will be laying off.