Easy Come Easy Go

California employee benefits run wild:

Stockton, California, Police Chief Tom Morris was supposed to bring stability to law enforcement when he was appointed to the job four years ago.

He lasted eight months and left the now-bankrupt city at age 52 with an annual pension that pays more than $204,000 — the third of four chiefs who stayed in the position for less than three years and retired with an average of 92 percent of their final salaries.

The union and state legislators’ strategy has been to heap most of the burden of paying for this larceny on a few high-income individuals. Taxing the rich, in other words, on the theory that a) they are not likely to get much sympathy from anyone and b) there are more recipients than victims, so they’ll be outvoted every time. The problem is that the “rich’s” income is volatile and depends heavily on capital gains (taxed as ordinary income in California). So it ends up that the future of the state budget now depends on the share price of Facebook, whose mega-IPO is counted on to produce hundreds of millions of dollars in state taxes.

Menlo Park-based Facebook closed Wednesday trading at $20.88 per share, a new low 45 percent below the initial price.

The Analyst’s Office said today that much of the Facebook income tax revenues will still come in. But the LAO added that “if the company’s stock price remains depressed, hundreds of millions of income tax dollars assumed in the 2012-13 state budget plan are at risk.”

I must say that I am happy that I have moved out of California and am no longer paying for the inflated salaries and pensions of these thugs.

Edit: Apparently California was expecting $1.9 billion of revenue from the Facebook IPO.

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