I used to live in California. California gave me my education and my wife, and I’m sure that before my time is done I’m going to return there. Conservatives who despise the state forget that it gave us Richard Nixon and Ronald Reagan. It might contain Berkeley, but it also contains some of the reddest counties found outside of the South. It contains some of the most beautiful places on earth. Yosemite. Big Sur. Joshua Tree (which in turn inspired one of the best albums ever – U2’s Joshua Tree). I used to jokingly tell my students that if God lived anywhere in America, He would choose to live in California. Spend a week in Yosemite and you’ll see why part of me still believes it.
But God wouldn’t live in California today. The state’s economy is a shambles, and I’m sure God would be pretty pissed about the collapsing services and soaring taxes. An article in this week’s Economist calls the state ungovernable and blames the mess on the people. It reckons that should the next round of ballot initiatives fail (as seems likely) California will enter a “full-blown financial crisis that will require excruciating cuts in public services.” Unfortunately those cuts are exactly what the state needs.
In FY 2008 the state spent $41 billion more than in FY 2004. Of that $41 billion, $13 billion went to education and $10 billion went to health and another $10 billion went to transportation. The rest went to cost of living adjustments for various programs. In 2008 the state spent $10,377 per student. Public school teachers now earn an average of $59,000 a year – tied with the state of Connecticut for the highest teacher salaries in the nation.
Does the average parent feel that their student is getting a top-tier education? The National Center for Education Statistics ranks California in 2007 at well below the national average for eighth grade reading and mathematics. Clearly taxpayers and parents aren’t getting their money’s worth when it comes to education.
California is proof that government spending does not solve problems, it exacerbates them. Between 2004 and 2008 California boosted spending by $41 billion. Now the economy has turned, but all that spending is still on the books so the state faces an annual deficit of $15 billion. Kind of makes you wander if Californians regret that extra $41 billion.
The state is facing draconian cutbacks and people are voting not only at the ballot box but with their feet. In 2005 the state had the second biggest outflow of population in the US - and that was at the height of a booming economy. In fact over the past 4 years emigration has outpaced immigration to the Golden State reaching 135,000 in 2008. This relative trickle of .4% in 2008 threatens to become a flood as taxes rise, services are cut, and jobs continue fleeing the state. And each drop of the flood isn’t equal.
“When California faced a Mount Everest-sized $14 billion deficit in 2003, one of the major causes for the red ink was the stampede of millionaire households from the state,” says a report called “Rich States, Poor States” by economists Arthur Laffer and Stephen Moore. “Out of the 25,000 or so seven-figure-income families, more than 5,000 left in the early 2000s, and the loss of their tax payments accounted for about half the budget hole.” (link)
Unfortunately this is a lesson that President Obama and the Democrats are preparing to teach the rest of the nation – and there’s nowhere the rest of us can move to escape it. As California goes, so goes the nation is an aphorism that has never been more appropriate.