A potentially serious complication has arisen in California’s latest effort to avoid billions in spending cuts, which threaten the state’s education and welfare systems.

Gov. Jerry Brown’s Proposition 30 intends to forestall “draconian” budget cuts by temporarily raising taxes, including sales taxes and income taxes on the wealthy. The initiative could largely determine his legacy, as well as the state’s fiscal health for at least a decade. Moreover, if successful, Prop. 30 could begin to shift the national conversation on taxes after decades of extreme antitax sentiment across the country.

Polls show that a thin majority of state voters support Prop. 30. But that support could be undercut by another proposition that aims to raise taxes for public education. Molly Munger, the millionaire behind the rival initiative, has even suggested she might start airing comparison ads arguing why voters should vote for her proposition, not Governor Brown’s Prop. 30.

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Support for Gov. Jerry Brown’s plan for billions of dollars in tax hikes on the November ballot is slipping amid public anxiety about how politicians spend money, but voters still favor the proposal, according to a new USC Dornsife/Los Angeles Times poll.

The findings suggest that voters are leery of sending more cash to Sacramento in the wake of a financial scandal at the parks department, spiraling costs for a multibillion-dollar high-speed rail project to connect Northern and Southern California and ill-timed legislative pay raises.

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States saw little relief from poverty in the past year, especially among children, the unemployed and those in the lowest income brackets.

The latest Census figures show that 17 states had increases in the number of people living in poverty between 2010 and 2011. Only one state, Vermont, had a decrease; the other 32 showed no change.

Although the national poverty rate has been steady at 15.9%, the Census data show pockets of increases by geography and among demographic groups. The data reflect the economy’s slow recovery and anemic job growth, policy analysts say.

“The problem is high unemployment,” says Chuck Sheketoff, executive director of the Oregon Center for Public Policy….

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Would an expansion of Medicaid under the federal health-care law help or hinder South Carolina’s finances? Depends who you ask.

Strains of disagreement are building against the backdrop of a campaign by Gov. Nikki Haley’s administration to build opposition to an expansion.
Generally opposed by Republicans and favored by Democrats, the debate over whether to expand the Medicaid program in the states is set to play out in many statehouses across the country. That’s because a June Supreme Court ruling made the extension of coverage optional.

In the Palmetto State, advocates for the expansion contend Haley’s administration is emphasizing the costs and underselling offsetting economic benefits of an expansion.

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Gov. Jerry Brown of California announced when he came into office last year that he had found an alarming $28 billion “wall of debt” looming over the state, which had to be dismantled.

Since then, he has slowed the issuance of municipal bonds, called for spending cuts and tried to persuade the state’s famously antitax voters to approve a tax increase this fall.

On Thursday, an independent group of fiscal experts said Mr. Brown’s efforts were all well and good, but in fact, the “wall of debt” was several times as big as the governor thought.

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Opposition is not uniform. A few denominations, like the Unitarian Universalist Association of Congregations, with about 22,000 members in Massachusetts, officially support the concept. The Unitarians and other mainline Protestant denominations typically do not take positions on specific state proposals.

And, in an age when many ecclesiastical hierarchies are weakening, in a country where many people are used to filtering religious beliefs through personal and secular lenses, ­individual clergy and congregants do not necessarily follow the lead of church officials.

The national Episcopal Church, for example, officially opposes physician-assisted suicide. But the Rev. Daphne B. Noyes, a deacon at the Church of the Advent in Boston and a hospital chaplain, said her work with dying people and their families has led her to ­believe the option should be available under rigorously limited circumstances that ensure that participation by all parties is voluntary and deliberate.

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So people who spend most of their money on groceries and gasoline and electricity ”” usually the poorest among us ”” effectively pay a lower sales tax, because those items aren’t taxed. So do wealthier people who spend most of their money on services ”” from lawn care to attorney fees ”” which also are untaxed. People who spend more of their money on clothing or electronics or restaurant meals or most consumer goods pay a higher effective tax rate because those items are taxed.

Now, there are perfectly legitimate reasons to write exemptions into the tax code. It can make the code more equitable: A sales tax is regressive, because poor people must spend a larger portion of their income than wealthier people, who are able to save or invest more; exempting groceries is one way to make the tax less regressive. Exemptions also can discourage those activities that we as a society want to discourage and encourage activities that we want to encourage; hence, a higher tax on cigarettes, and tax breaks for creating jobs in low-income counties.

The problem comes when the loopholes swallow the whole ”” as they clearly have when twice as many sales are exempted as taxed. The problem comes when the tax exemptions do not reflect generally agreed-upon values, but instead reflect the lobbying power of the favored interests. Or inertia.

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Entrepreneurs say their technology could smooth revolutionary reforms of medical care in the US, which spends $2.6tn a year on health, or 17 per cent of gross domestic product. As policy changes roll out over the next few years, insurance companies will be forced to limit their profits, and hospitals will face penalties if patients return to the hospital within 30 days of being discharged. Doctors will no longer be paid for how many X-rays they take or laboratory tests they run but for how well their patients are doing.

However, while the entrepreneurs exude optimism about their ability to streamline the healthcare system, the sprawling industry proved resistant of reforms in the 1990s. It was difficult to translate the vision of a few bright technology experts to the massive healthcare administration sector.

Fears about the proposed technology revolution resonate in several other countries that have hit roadblocks when turning to technology to address healthcare problems. Doctors and other medical professionals around the world have historically been slow to adopt new technology, wary of the costs and the time needed to learn and adjust to new administrative procedures.

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Unemployment taxes for S.C. businesses could rise by as much as 12 percent next year because state officials are not enforcing a new state law, a state senator said Tuesday.

But officials at the state Department of Employment and Workforce, which administers the state’s jobless benefits, say they expect those tax rates to drop by 12 percent, adding they are enforcing the law.

Earlier this year, lawmakers passed a law that strips unemployment benefits from people who were fired for misconduct. State Sen. Kevin Bryant, R-Anderson, and some other Republican senators say the state agency is not enforcing the new law properly.

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What’s the fiercest rivalry in American politics today? There’s Obama-Romney, of course, but try O’Malley-McDonnell””neighboring governors battling across the Potomac River over how best to resuscitate a moribund economy.

Martin O’Malley, Maryland’s liberal Democratic governor, is competing for jobs, businesses and tax dollars with Bob McDonnell, Virginia’s conservative Republican chief executive. Both are rising stars considered potential presidential hopefuls in 2016. Both are Irish Catholics””Mr. McDonnell playfully calls Mr. O’Malley “the big Irishman to our north”””and each leads his party’s association of governors. The two regularly spar on the Sunday talk shows, on the pages of Washington-area newspapers, and over the radio.

Each man seems obsessed with proving that his economic model has outperformed the other’s….

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South Carolina’s pension fund investments have generated far less over the past year than hoped, but officials say there’s no cause for alarm.

Preliminary numbers from the state’s Retirement System Investment Commission show a return on investments of 0.6 percent for the fiscal year ending June 30. The state assumes a 7.5 percent annual return when calculating what it needs to keep the system solvent long-term.

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Access to fast Internet is spreading in the U.S., but about 19 million Americans can’t get it, according to a new government report out Tuesday….

The lack of access continues to hamper rural Americans in particular. About 14.5 million rural Americans ”” or 23.7% of 61 million people living in rural areas ”” had no fast Internet service offered for their homes. In contrast, only 1.8% Americans living in non-rural areas ”” 4.5 million out of 254.9 million ”” had no broadband access. The FCC categorizes an Internet service as “broadband” if it transmits at a speed of at least 4 megabits per second.

The report’s ranking of states again underscored the correlation between broadband access and economic productivity. Economically struggling states fared worse than more thriving areas of the country. West Virginia had the least amount of access, with 45.9% of the state without broadband access. Montana (26.7%), South Dakota (21.1%) and Alaska (19.6%) followed.

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One in four Mississippi residents report there was at least one time in the past 12 months when they did not have enough money to buy the food they or their families needed — more than in any other state in the first half of 2012. Residents in Alabama and Delaware are also among the most likely to struggle to afford food. Residents of North Dakota, South Dakota, and Vermont are among the least likely to have this problem.

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This November, Maine voters will decide if the state should allow marriage licenses to be issued to same-sex couples. The measure marks the first time supporters of same-sex “marriage” have proposed the question of legalization on a state ballot.

The proposal goes before voters of the Pine Tree State three years after residents passed a “people’s veto,” effectively negating an effort by the Maine Legislature to legalize same-sex “marriage” earlier in 2009.

The campaigns both for and against the initiative play out in a national context this year…

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An appeals court ruled in favor of a Florida county courthouse’s Ten Commandments display, sending the case back down to a lower court that had ruled against the display last year.

The Eleventh Circuit Court of Appeals ruled Wednesday that the suit by the American Civil Liberties Union against Dixie County over its five-foot tall Decalogue display lacked legal standing.

The ACLU had sued on behalf of an individual named in court documents as “John Doe,” who lived in North Carolina and had claimed that the presence of the Ten Commandments had inhibited him from purchasing land in Dixie County.

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Unemployment rates rose in 44 U.S. states in July, the most states to show a monthly increase in more than three years and a reflection of weak hiring nationwide.

The Labor Department said Friday that unemployment rates fell in only two states and were unchanged in four.

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California added jobs faster than the rest of the nation over the past year. Tech firms are showering riches on Silicon Valley, and home prices are soaring in places like Palo Alto. The Golden State is rebounding, but for a broad swath of residents, it is a lot less golden and is likely to stay that way.

Even in Silicon Valley, many aren’t joining the revival. Tech companies are thriving, but only after shifting much work elsewhere. Internet-software experts are in demand; middle-aged semiconductor executives aren’t.

Among the thriving are people like Pete Curley, who, in six years in Silicon Valley, has twice sold social-networking applications for healthy sums. The recently married 27-year-old is considering buying a home in the region’s pricey market. By contrast, Pat Fasang, who says that he is older than 50, was laid off from a six-figure marketing post at a semiconductor firm last year and says that the Internet firms hiring today have no interest in him. In more than 20 years in Silicon Valley, he has never been out of work this long. “I’m beginning to feel hungry,” he says.

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Attached to the bishop’s letter was a series of points as to why voters should consider repealing the law under Referendum 74. Stating that the new marriage law does not expand but redefines marriage in terms of a relationship between two people, the American prelate stated that such a change would cause marriage to lose its unique identity.

Another matter of concern was that a redefinition of marriage would inevitably lead to a redefinition of parenthood. The letter cited examples of similar laws passed in Spain and Canada, where traditional designations such as “mother” and “father” have been replaced with either “Parent 1 and Parent 2” or “Progenitor 1 and Progenitor 2.”

Words matter, Bishop Cupich stated, “especially words like mother and father, which have real depth and meaning. We lose a great deal when they are substituted by terms and designations not otherwise used. They are strange to the ear, but they also fail to convey what fathers and mothers each bring as male and female to the critical task of generating, rearing and educating their sons and daughters.”

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Cash-hungry states have long tried to poach business from one another. Now many are stepping up their efforts to lure gamblers from their neighbors to their growing ranks of slot machines, leaving states like Delaware, which embraced gambling early, struggling to keep up in what has become a feverish one-armed-bandit arms race.

Gambling revenue accounts for more than 7 percent of Delaware’s general fund budget, making it the state’s fourth biggest revenue stream, ahead of its corporate income tax and gross receipts tax. But when new casinos in Maryland and Pennsylvania began to attract the gamblers who once fed quarters into Delaware’s machines, the state acted. First it legalized a form of sports betting. Then it allowed table games including blackjack, craps and roulette. But its gambling revenues have continued to fall.

So at the end of June, Gov. Jack Markell, a Democrat, signed a law that could make Delaware the first state to offer Internet gambling ”” giving its residents the chance to bet on video lottery games and online versions of games like poker, blackjack and roulette without leaving their homes.

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A proposed amendment to the state Constitution that supporters say would protect Missourians’ right to pray in public will pass by a mammoth margin if numbers from a Post-Dispatch poll hold until Aug. 7.

That’s when the so-called “right to pray” ballot measure ”” known as Amendment 2 ”” will go before voters.

The measure’s champions say it better defines Missourians’ First Amendment rights and will help to protect the state’s Christians, about 80 percent of the population, who they say are under siege in the public square.

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Illinois Medicaid recipients have been limited to four prescription drugs as the state becomes the latest to cap how many medicines it will cover in the state-federal health insurance program for the poor.

Doctors fear the state’s cost-cutting move could harm patients, who have to get state permission to go beyond the limit.

“We understand the state is trying to get its Medicaid budget under control, but our concern is it not be a hardship for patients and a hassle for doctors in the execution,” says William Werner, president of the Illinois State Medical Society.

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“The ability of the states to meet their obligations to public employees, to creditors and most critically to the education and well-being of their citizens is threatened,” warned the chairmen of the task force, Richard Ravitch, a former lieutenant governor of New York, and Paul A. Volcker, a former chairman of the Federal Reserve.

The report added a strong dose of fiscal pessimism just as many states have seen their immediate budget pressures begin to ease. And it called into question how states will restore the services they have cut during the downturn, saying that the loss of jobs in prisons, hospitals, courts and agencies have been more severe than in any of the past nine recessions.

“This is a fundamental shift in the way governments have responded to recessions and appears to signal a willingness to ”˜unbuild’ state government in a way that has not been done before,” it said, noting that court systems had cut their hours in many states, delaying actions including divorce settlements and criminal trials.

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(Assiduous blog readers may remember we took a special interest in this case earlier this year).

A divided Supreme Court on Monday said states may not impose on juvenile murderers mandatory life sentences without the possibility of parole.

The 5 to 4 ruling said such mandatory sentences offend the constitution’s prohibition of cruel and unusual punishment, and follow a trend at the court of treating even the worst juvenile offenders differently from adults….

“The court took a significant step forward by recognizing the fundamental unfairness of mandatory death-in-prison sentences that don’t allow sentencers to consider the unique status of children and their potential for change,” said EJI [Equal Justice Initiative]’s Bryan Stevenson. “The court has recognized that children need additional attention and protection in the criminal justice system.”

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In a continuing study, an all-star group of researchers following Ms. [Wendy] Parris and tens of thousands of other Oregonians has found that gaining insurance makes people feel healthier, happier and more financially stable. The insured also spend more on health care, dashing some hopes of preventive-medicine advocates who have argued that coverage can save money ”” by keeping people out of emergency rooms, for instance. In Oregon, the newly insured spent an average of $778 a year, or 25 percent, more on health care than those who did not win insurance.

For the nation, the lesson appears to be mixed. Expanded coverage brings large benefits to many people, but it is also more likely to increase a stretched federal government’s long-term budget responsibilities.

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The new rules could hit pension plans in states like Illinois and New Jersey particularly hard, and even raise borrowing costs for certain municipalities, analysts say. “This could be the event that incites a bigger policy response than what we’ve seen so far,” says Matt Fabian, managing director at Municipal Market Advisors, a research firm.

The exact impact of the new rules by the Governmental Accounting Standards Board isn’t clear. According to researchers at Boston College, pension liabilities at 126 state and municipal pension plans would jump by roughly $600 billion, or about 18%. The estimate is based on 2010 financial data and doesn’t reflect the stock market’s recent rebound or moves by many U.S. states to rein in pension costs.

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State and local governments are keeping the tightest lid on spending in three decades, even though tax revenue is rising again and powerful interest groups are asking for more money.

he tight budget controls represent a sharp reversal from several years ago when states struggled to control spending, despite a drop in tax collections, and got a $250 billion bailout from the federal government. Today, both Republicans and Democrats are rejecting spending requests even from traditional allies — police, businesses, teachers, doctors and others — and keeping budgets balanced as federal aid recedes.

“We’re seeing some incredibly significant examples of groups not getting what they want,” says Scott Pattison, head of the National Association of State Budget Officers. “There doesn’t appear to be that much pushback. Maybe there’s an acceptance that cuts have to occur.”

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The Rev. Tom Eklo of Richfield’s St. Nicholas Episcopal Church, after voicing his opposition to the proposed constitutional amendment that would ban same-sex marriage in Minnesota, went even further recently, saying he’d like to get out of the marriage business altogether.

“I don’t think clergy should be doing marriages,” he said. “We’re basically puppets of the state in that regard.”

According to Eklo the state is responsible for marrying individuals””and because marriage is thus a civil, rather than religious contract””religious organizations, of any denomination, should not be tasked with performing marriages.

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A growing number of cities across the United States are making it harder for the homeless.

Philadelphia recently banned outdoor feeding of people in city parks. Denver has begun enforcing a ban on eating and sleeping on property without permission. And this month, lawmakers in Ashland, Ore., will consider strengthening the town’s ban on camping and making noise in public.

And the list goes on: Atlanta, Los Angeles, Miami, Oklahoma City, Phoenix, San Diego and more than 50 other cities have previously adopted some kind of anti-camping or anti-food-sharing laws, according to the National Law Center on Homelessness & Poverty.

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Thousands of state workers could find themselves facing a life-changing decision later this month ”” whether to retire or not ”” and with less than a week to make it.

Lawmakers are poised to make major changes in the state’s Retirement Systems that would affect the more than 214,000 state and local government employees covered by that pension system.

State senators want some of the changes to take effect July 1.

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Every generation has an incentive to borrow money from the future to spend on itself. But, until ours, no generation of Americans has done it to the same extent. Why?

A huge reason is that earlier generations were insecure. They lived without modern medicine, without modern technology and without modern welfare states. They lived one illness, one drought and one recession away from catastrophe. They developed a moral abhorrence about things like excessive debt, which would further magnify their vulnerability.

Recently, life has become better and more secure. But the aversion to debt has diminished amid the progress. Credit card companies seduced people into borrowing more. Politicians found that they could buy votes with borrowed money. People became more comfortable with red ink….

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