Is California a "failed state"?

Newsweek just ran a debate, California: America’s First Failed State,” among six people. The most humorous part involved Bobby Shriver, described as “a Santa Monica city councilman, activist and brother-in-law of California Gov. Arnold Schwarzenegger.” Also, rich, pampered scion of America’s royal family, nephew of a president, JFK, and two U.S. senators, RFK and the late Teddy.

He says California is “a failed state” because:

In local government, where I serve, things are bad. In Santa Monica, our redevelopment agency had a budget this year of $30 million—the state took $22 million of that. How can you work on that basis?

The last time I was in Santa Monica, the wealthy beach community didn’t exactly look like it needed “redevelopment” paid for by tax money taken from impoverished people in Compton and Watts. According to Zillow.com, the median home sale value there is $833,000 (as of today) — even after the recent real estate crash.

Moreover, “redevelopment” is just a code word for abusing eminent domain to seize private property and give it to a well-connected developer. Check out the Coalition of Redevelopment Reform.

Then there’s Gray Davis‘ comments. Whether or not California is a “failed state,” he certainly was a failed governor, being recalled by voters in 2003. He says, sensibly:

Let me acknowledge there are problems in Sacramento. But the shortcomings of our elected officials should not detract from the creative contributions of our 37 million citizens…. With all of its problems it still managed to nurture some of the most innovative companies in the world: Google, Apple, Hewlett-Packard, MySpace, Facebook, Twitter, YouTube, Cisco, Intel, Disney, eBay, and many others.

Too bad he didn’t stop there. Next:

California is all about change: it likes to get there first, and it frequently does. It was the first state to regulate greenhouse gases, to allow full-scale stem-cell research, to establish renewable energy portfolio standards. Our electricity growth has been nada, zero, over 30 years as we became the largest state in America.

Actually, on greenhouse gases, AB32 is a massive jobs killer, as I wrote about on CalWatchDog.com. On stem-cell research, he omitted the word “embryonic,” which many objected to because of abortions; it already was “allowed,” because abortion is legal; it just wasn’t funded by federal tax dollars. State funding was a massive pork waste product, as I wrote about on this blog. And electricity use hasn’t grown because, as governor, he panicked during the electricity crisis a decade ago, leading to much higher prices that killed industry and sparked his recall.

Andreas Kluth, the California correspondent for The Economist, says California is a “failed state” because…loud drum roll, por favor … “Calfornia has been undressing since the 1970s…since the infamous Proposition 13,” which cut property taxes  back in 1978. He doesn’t care that taxes were so high elderly widows were being evicted from their homes.

Nor does he even seem to know that in fiscal year 1977-78 (beginning on July 1, 1977), the year  Prop. 13 passed, general fund spending was 6.10% of personal income, almost double the 3.67% in 1962-63, during California’s “golden age,” when massive infrastructure projects were built — roads, schools, waterways — under Gov. Pat Brown. In fiscal 2007-, the number was 6.55%. For 2008-09, 5.67. For 2009-10, the current budget, it’s estimated at 5.52. Obviously, today the problem isn’t the lack of tax money, but that so much of it is wasted.

The discussion should have featured some better folks, such as historian and State Librarian Emeritus Kevin Starr, author of a eight-volume (so far) history of California. Or the always interesting Joel Kotkin. Or Rep. Tom McClintock, who warned for decades that the state was spending itself into bankruptcy.

Here’s Kotkin’s review of Starr’s latest volume, “Golden Dreams: California in an Age of Abundance 1950-1963.”

(For the budget data, see Appendix Schedule 6, Appendix Page 13,  on .pdf page 124 here.)

— John Seiler

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  1. stevefromsacto
    stevefromsacto 31 January, 2010, 11:11

    “…general fund spending was 6.10% of personal income, almost double the 3.67% in 1962-63, during California’s “golden age,” when massive infrastructure projects were built — roads, schools, waterways — under Gov. Pat Brown. In fiscal 2007-, the number was 6.55%. For 2008-09, 5.67. For 2009-10, the current budget, it’s estimated at 5.52. Obviously, today the problem isn’t the lack of tax money, but that so much of it is wasted…”

    Gee, you kind of forgot to mention how much the population has increased since 1962-63. You didn’t mention the enormous growth in the elderly population. You forgot to mention that all those massive infrastructure projects have to be repaired or replaced after more than 40 years.

    You are correct that Prop. 13 was designed to keep elderly widows from being evicted from their homes. But it was not designed to pad the profit margins of corporations. We could split the rolls so that residential homeowners could still be protected while corporations pay their fair share… This would bring millions in needed revenue to the state. But NO, we can’t do that when our real goal is to shrink the size of state government “so we can drown it in the bathtub.”

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