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A view of the California State Capitol. The budget outlook is improving for the Golden State, but that doesn't mean there will soon be a lot of money on the bank.
California may declare a surplus for its fiscal year 2014 budget. Unfortunately, the state won’t be able to put money in the bank for a rainy day.
That doesn't mean its outlook isn't looking up. The credit rating agency Moody’s likes what it sees in the Golden State's improved fiscal situation. In particular, the passage of Prop 30 last November — raising incomes taxes on wealthy Californians and sales taxes on everybody — bodes well for future revenues.
But getting the budget out of deficit and into surplus doesn’t mean the state will be prepared for the next inevitable economic bust.
Moody’s analyst Emily Raimes blames a history of underfunding education.
“As revenues increase in the state in the next few years, additional revenues will have to be dedicated to bringing that education funding back to the baseline where it would have been if the state had not been doing that underfunding," she said.
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Phil Mickelson speaks to reporters following play during the Pro-Am at the Farmers Insurance Open at Torrey Pines South Golf Course on January 23 in La Jolla, California. Will higher taxes drive him and other rich Californians to tax-free states?
Millionaire professional golfer and San Diegan Phil Mickelson got himself into a spot of bogeyish bother during the weekend when he said that in response to rising income taxes on the wealthy in the U.S. and California, he would have to take "drastic action."
Observers interpreted the pronouncement as a pledge to leave the Golden State for the tax-free embrace of Florida to which Mickelson's fellow native Californian, Tiger Woods, skedaddled in the mid-1990s. It also shed some light on why, after being part of an investor group that won the bidding for the Padres last year and bought the team for $800 million, he pulled up his ownership stake.
Florida is pretty much the epicenter of pro golf. Numerous touring professionals, American and otherwise, have pitched their tents there. Mickelson is something of an outlier for choosing tax-addled California and having to add to his private jet flying time when he visits the links of Europe.
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Chase Headley of the San Diego Padres dives for a ground ball against the Arizona Diamondbacks. The Padres have officially changed hands, for $800 million.
It’s official — the San Diego Padres have changed hands, in a deal that ranks as the third largest in the history of Major League Baseball. MLB's owners approved the sale today.
The Padres weren’t sold in time for the All-Star Game, but for previous owner John Moores, the wait was probably worth it. MLB said "Yea" to an $800 million deal. Only the Chicago Cubs and the Dodgers sold for more, at $845 million and — when the parking lot side deal was added in — $2.3 billion, respectively.
Speaking of the Dodgers, there’s some of their DNA in the new ownership group. One-time Dodgers owners Peter O’Malley’s sons Kevin and Brian have joined pro golfer Phil Mickelson and San Diego businessman Ron Fowler to form the Padres new ownership group. Two of O’Malley’s nephews are also in on the deal. Fowler, interestingly, was also involved with a minority ownership group run by former Padres CEO Jeff Moorad.
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Starting pitcher Anthony Bass of the San Diego Padres. The team was just sold to a new ownership group for $800 million.
Pretty much as expected, the San Diego Padres sale to heirs of former Dodgers owner Peter O'Malley — plus pro golfer Phil Mickelson and, according to the San Diego U-T, Ron Fowler — has gone through for $800 million. Padres owner John Moores and minority owner Jeff Moorad sealed the deal tonight.
As has been widely reported prior to the deal closing, $200 million of the $800 million is part of the payment that the Padres received when they recently did a 20-year, $1.4-billion broadcast deal with Fox Sports. Fowler, a San Diego businessman, had said that he wasn't front-and-center in the new investor group, but it appears that he has stepped away from the minority ownership group and is now assuming a role with the new owners.
Major League Baseball's owners still have to vote on the deal. They could do this on August 16. But the vote will likely be a formality, given that MLB Commissioner Bud Selig has effectively given his blessing to the new ownership group. As David Carter, professor of sports business at the USC Marshall School of Business and the Executive Director of the USC Sport Business Institute, explained to me when we talked about the deal in early July:
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Chase Headley of the San Diego Padres dives for a ground ball against the Arizona Diamondbacks. The team is in negotiations with potential new owners, but may not seal the deal in time for the All-Star Game.
Last week, there was some serious speculation that the San Diego Padres would be sold by current owner John Moores to a group led by the O'Malley family (of Dodgers fame) with investors that include pro golfer Phil Mickelson in time for the All-Star Game, which takes place on July 10.
We're obviously running out of days for that to happen. However, the O'Malley group is reported to be in "exclusive" negotiations with Moores, over a purchase price that's been pegged at $800 million. Major League Baseball Commissioner Bud Selig has also all but given the deal his blessing.
There were some questions about how the deal would be financed, based on problems Peter O'Malley encountered with Korean investors when he entered bidding for the Dodgers earlier this year. But it now appears that the O'Malley bid for the Padres doesn't involve that funding channel.