February 21, 2007

And that’s why California builds more and bigger roads than Washington

Category: Technology, Life, NorthWest — by Amit Chaudhary @ 3:07 pm

The reason behind better living standards in the California (including San Francisco Bay area aka Silicon Valley) as compared to Washington (Seattle \ Bellevue \ Redmond aka EastSide) is more clear to me.
Boston.com article: Google stock boom boosts California coffers

California, whose budget revenue slides up and down like a yo-yo with changes in capital gains and stock options, is once again counting on outsized income tax filings from a handful of tech executives to help balance its budget.

After cashing in more than 9 million shares valued at $3.7 billion last year, 16 Google insiders will owe the Golden State as much as $380 million in taxes — enough to cover the salaries of more than 3,000 state workers. Taxes paid by Google founders Sergey Brin and Larry Page account for nearly half the amount.

Mega-sized tax filings from Google executives began flowing into state coffers in earnest in 2006, two years after the company went public. The receipts helped fuel a multibillion dollar tax windfall last spring that allowed Gov. Arnold Schwarzenegger to pour money into roads, classrooms and other popular programs, pleasing political enemies and helping smooth his path to re-election.

Google insiders are on pace to pay a cumulative $1 billion by 2008 in state income tax since the company went public. Combined, that’s about 1 percent of the state’s annual general fund budget.

But that’s still less than the heady days of the Internet boom in 2000, when capital gains and stock options accounted for a whopping 40 percent of all personal income in California and a quarter of the state’s tax revenue.

There you have it, that’s why California builds more and bigger roads than Washington and the 405\I-5\520 highway jams in Washington compare only to the worst in SFO, say the two major bridges. Of course the Golden state needs even more money, but that is another story.

Incase you thought I missed it, I did consider blaming many other things including the lack of showers in Mt. Rainier NP campsites or the fact is the whole Park is closed on lack of many rich companies. ;-)
This is ofcourse a topic close to my heart:

Comparing living in Seattle (Eastside) or Silicon Valley (SF Bay Area): Part 3 (Traffic and Miscellaneous)

Comparing living in Seattle (Eastside) or Silicon Valley (SF Bay Area): Part 1 (Housing and Tech Jobs)

Note to Dear Reader: If you missed it, this blog post is part simplification, part jest and part truth. However it is not as loaded with sarcasm as Please do not save money you might move the USA economy into recession

Hat Tip: Mish’s Economics blog article: State Tax Revenues

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