CALIFORNIA BUDGET FOLLIES. I purchased a print copy of Newsweek for its coverage of California's fiscal troubles. Waste of four bucks. Here's all you have to read. From "Tarnished Gold," the true state of California's fisc: "The state government’s financial woes began with the tech recession, but Davis and legislators continued to spend money on popular programs long after tax revenues dropped. During the boom, state coffers were filled with taxes on capital gains and stock options from all those tech execs and dot-com millionaires. In the 2000-01 fiscal year, these revenues leapt to $17 billion, representing 25 percent of all state income taxes collected. But by last year, that tax revenue had sunk to just $4.7 billion." No Gini coefficient for tax incidence here, but it seems likely that most of those revenues were transitory, and any careful analysis of the tax forms ought to have discovered that. Then in "State of Siege" comes this lament: "Even if there is a deal—and one could come as early as this week—it will inevitably lead to draconian cuts in social services, highway construction and education; the state’s vast public-university systems—the invaluable source of upward mobility in a state founded on the idea—are likely to raise tuition at least 25 percent just as they are being flooded by a new generation of immigrants’ kids." Maybe it's time to take a look at those public colleges, particularly the community colleges. They might be a source of upward mobility, but here's a dissenting view. Perhaps higher tuitions will encourage some self-selection among students.

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