

Ask HN: Why is Silicon Valley almost broke? - jmilinion

No, not the companies in Silicon Valley but the region itself.  I'm reading articles about how CalTrain almost ran out of money, how VTA is underfunded, and articles upon articles about how the region can't build any new public projects anymore.<p>What's going on over there?
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retroafroman
Large companies[1] and well to do citizens[2] often pay shockingly low tax
rates.

[1] [http://www.nerdwallet.com/blog/investing/2012/corporate-
taxe...](http://www.nerdwallet.com/blog/investing/2012/corporate-taxes-
only-9-percent/#.UB-zQshYu9c)
[2][http://www.nytimes.com/2011/08/15/opinion/stop-coddling-
the-...](http://www.nytimes.com/2011/08/15/opinion/stop-coddling-the-super-
rich.html?_r=0)

~~~
ScottWhigham
Downvoted for agenda-driven comments that focus only on generalization and
speculation.

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ScottWhigham
I found myself wondering, "Is OP a US citizen? I doubt it b/c every US citizen
knows how foo-bar'ed the CA government is."

Here's a fairly politically-leaning article about how they "lost" almost $1b
in tax revenue (projected):

[http://www.washingtontimes.com/blog/inside-
politics/2012/dec...](http://www.washingtontimes.com/blog/inside-
politics/2012/dec/8/california-state-revenue-misses-projection-almost-/)

“November’s disappointing revenues stand in stark contrast to recent news that
California is leading the nation in job growth, has significantly improved its
cash liquidity to pay bills, and even long-distressed home values are starting
to inch upward,” Mr. Chiang said in a statement. “This serves as a sobering
reminder that, while the economy is expanding, it is doing so at a slow and
uneven pace that will require the state to exercise care and discipline in how
its fiscal affairs are managed in the coming year.”

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caycep
my understanding is the CA govt has been dysfunctional for a while especially
with budgetary matters. I am not an expert in the details but I have heard
it's hard to get anything past gridlock in the CA state legislature.

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BillSaysThis
Note: I've lived in the Valley since 1996.

One thing most people don't factor in is that everything is more expensive
here and that to attract workers to skilled but not professional jobs the
salaries are higher than elsewhere. My wife is a staffer (not a lawyer or in a
position requiring certification) at a well-known law firm and I'd bet her
salary is 40-60% higher than if the office were in, say, Portland or Austin.

And real estate, to put supporting buildings like train stations and repair
yards, is similarly more expensive.

We do have some real doozies planning projects. For giggles look at the so-
called high speed rail project being 'built' to link San Diego to San
Francisco, with a price tag that has gone from $30 billion to north of $100
BILLION before a shovel's even gone in the ground. But only if you have an
hour or so to roll around on the floor laughing.

On the plus side, Jerry Brown seems to have actually done some practical good
since coming back into the governor's office. He's been very pragmatic and
considering how much he's had to struggle against legislators, bureaucrats,
unions and other entrenched interests, I think Brown has been the most
effective governor CA's had since I got here in '96.

~~~
jmilinion
Silicon Valley is known for having some very smart people solving very complex
problems. Do you think there was any way for them to have limited the damage
from California over the years?

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BillSaysThis
Sadly because of gerrymandering and pandering to interest groups, SV hasn't
had nearly the influence it might. Also, remember that Cali's issues have been
building since the mid-'60s or so and the Valley has only been a significant
force for maybe the past decade.

~~~
jmilinion
How about Silicon Valley itself? How much influence does Silicon Valley have
for it's own land?

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mathattack
For many large projects, it is very hard to separate Silicon Valley the region
from the state as a whole. The state is highly dependent on realized capital
gains from real estate (hasn't happened in a while) and tech equities (modest,
but slower since the Facebook IPO). The cost side has many fixed components,
so the state is nearly bankrupt, taking the region with it.

~~~
jmilinion
Do you think this will this have an effect on the technology companies there
in the long run if things keep going the way they are?

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mathattack
Not really. The rest of the country is in bad shape too, and there is too much
personal concentration there. Where would it go? Singapore? Still very
expensive there. New York? Also expensive. Austin? Perhaps...

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andrewhillman
It's all of California not just SV. It's a complete economic mess. They need
to overhaul the CA government and make severe changes.

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andyl
no more public projects? lol someone needs to open their eyes - its non-stop
construction around here.

~~~
kapitalx
There are lots of private construction projects going on because of the
massive recent boom in real estate in the valley.

