Originally Posted by Kingfish

In a Nutshell you have state revenues based on mid 1970s valuations, but all your state expenses are based in 2010 and go up each year because of inflation. Your property tax system created a bubble. If I am correct, I believe the valuation of real estate in CA dates all the way back to 1975. (I am not going to look it up but that is close) For several years you had a huge boom as people built a lot of new homes due to the housing shortage caused by your property taxation system. But as you get further and further away from 1975 with more and more people paying less than market value in property taxes and with less new construction to offset this the more your budget shortfall is going to grow. If the state could pay people the same salaries, the same construction costs for new buildings, and anything else they buy at 1975 rates they would be fine, but they can’t. Further compounding that situation is the state now has to try to make up for the shortfall by charging excessive fees and or other taxes further decreasing you tax base as you drive new residents and business away.