The Slow Death of California

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Status: Finished  |  Genre: Editorial and Opinion  |  House: Booksie Classic

California, once the most desired state to live in, is now a failed state. This essay explains how that happened.

The Slow Death of California

I was born in New York City and moved to California in 1956 after being discharged from the Marine Corp. I was twenty years old when I arrived in Los Angeles. I had five dollars in my pocket. I wanted to live “The California Dream”, and I have. Unfortunately, that dream is now dying, it has been for many years. It should be a lesson for the rest of the country. Why is it, that a state with all the natural resources, beauty and climate of California now has people leaving it by the thousands?  One million left from 2007 to 2016. Another 157 thousand left in 2020. Polls show that more than one half of Californians are considering leaving the state. I will try to answer that question, so that people in other states can learn from our mistakes.

California politics has been ruled by the public's political impulses. Liberals have won their campaign for bigger government and runaway spending, and conservatives have tried to keep tax raises limited. For decades governors and legislators have indulged key interest groups at the expense of California's financial future.

The overall cost of living here is 50% higher than the average cost in the United States. Housing is 2.4 times higher! High taxes are one of the reasons for this.  Our sales tax is 8.5%, income tax 9.3% (more than twice the national average). Californians practically live in their cars because there is no convenient and reliable source of transportation. We pay 50.5 cents per gallon for state excise taxes in addition to the Federal excise tax of 8.4 cents per gallon. With other state taxes and fees the total comes to 82.2 cents per gallon.

Why do we have these high taxes? The answer is simple, a population that has an insatiable appetite for government projects and a government that has an insatiable appetite for power. We are a one party state. The Democratic party has an overwhelming influence here. In the six presidential elections starting in 2000 they received 54%, 54%, 61%,60%, 62% and 63% of the vote.

California’s decline happened gradually over a period of about forty two years. I believe it started with Proposition 13 in 1978. Our constitution allows for propositions that qualify to be put on the ballot for a popular vote. If passed they become law. We have a two-thirds requirement for tax increases as a result of it.  It also capped the state's property taxes at 1% of assessed value and ensured that the assessed value cannot increase by more than 2% per year. Its limitations on property-tax revenues led the state to rely far more on income and sales taxes.

In 1988 voters approved Proposition 98, guaranteeing that about 40% of every year's budget would be dedicated to K-12 and community-college spending.

In 1990 voters passed Proposition 111, weakening a requirement which had imposed a spending cap on state government subject to adjustments for inflation and population growth. Spending subsequently exploded, and governors Gray Davis and Arnold Schwarzenegger each oversaw increases in the state's general fund of more than 30%.

In 1992, the California Teachers' Association, the most powerful teacher’s union in the state, blocked a ballot initiative to promote school choice in California.  In 2005, the organization spent nearly $60 million to defeat ballot measures aimed at bringing more accountability to California schools. California's teachers are the highest paid in the nation

In 1999, the state legislature passed a financial plan allowing the state's public-safety workers to retire with a pension equal to 90% of their salaries if they had served at least 30 years. As a result, more than 5,000 former state employees have taxpayer-supported retirement packages of more than $100,000 per year.  In November of that year the Governor estimated a $2.3 billion budget shortfall. State government spending nearly doubled in a decade when the state's population increased by only 10%.

Public high-speed rail received nearly $10 billion on a ballot measure that did not address the fact that more than 80% of the state's urban interstates are congested. In California's Central Valley farmers lost access to more than 150 billion gallons of water because of environmentalist efforts to protect a local species of fish.

California has an estimated 10.5 billion barrels of untapped oil reserves off its coast, but new offshore drilling leases have not been issued since 1969. The California State Lands Commission halted leasing of state offshore tracts after the Santa Barbara oil spill that year. In 1994 the California legislature codified the ban on new leases by passing the California Coastal Sanctuary Act, which prohibited new leasing of state offshore tracts.

In 2000 voters passsed Proposition 111, diluting a spending cap on state government subject to adjusments for inflation.and population growth. Meaningful fiscal restratints were removed. California's state general fund increased by more than 30%

­In 2003 Schwartzenegger was elected governor as an outsider. He repealed a nearly $4 billion increase in the state's car tax and overhauled California's workers' compensation system.

In 2005 he called for a special election focused on four ballot initiatives that were necessary to clean up state government: Proposition 74, lengthening the period necessary for teachers to get tenure and making it easier to fire underperforming educators; Proposition 75, requiring public-employee unions to receive explicit consent from members before using their dues for political purposes; Proposition 76, imposing limits on state spending; and Proposition 77. creating an independent panel to redraw the state's electoral districts. They were all overwhelmingly defeated.

Public transportation projects like high-speed rail received nearly $10 billion from a proposition while doing nothing to address the fact that more than 80% of the state's urban interstates were congested.

In 2006, California passed AB32, the “Global Warming Solutions Act”. It required the state to lower its greenhouse-gas emissions to 1990 levels by 2020. Estimates of the plan's eventual costs to California families have been as high as $3,800 a year. It restricted the ability to build new housing units in the state. This created a huge and unsustainable bubbles that price the middle class out of the housing market. Median California housing prices were twice median family incomes in 1960, four times in 1980, five times in 1990, and eight times in 2006. 

In 2008 California’s Public Utilities Commission released their long term energy plan. These are some of its requirements. All new residential construction to be “zero net energy” (ZNE) staring in 2020, all new commercial construction and 50 percent of all commercial buildings to be ZNE by 2030.

2009 was a years of crisis, the state was broke. The public is largely to blame for this.  A major part of the state's budget is determined by popularly ratified ballot initiatives. The public authorized bond measures to support various public projects. The state's defined-benefit plan for public pensions cost taxpayers $3.3 billion in fiscal year 2009-2010.

 California issued IOUs as payments for goods and services. To address a $42 billion shortfall the legislature enacted a package that included the largest state tax increases in American history, leaving California with the highest sales and personal income-tax rates in the country. When another $26 billion shortfall emerged by summer, lawmakers agreed to more than $16 billion in spending reductions. They projected a deficit of between $7 billion and $8 billion for the next budget cycle. And the state's defined-benefit plan for public pensions cost taxpayers $3.3 billion in fiscal year 2009-2010.

California's short-term ­financial difficulties were minor in comparison to its long-term obligations.  The California Public Employees' Retirement System and the California State Teachers' Retirement System, the state's two largest pension plans, lost a combined total of nearly $100 ­billion, about a quarter of their value, in the market downturn. California's fixed pension obligations were estimated to be $300 billion in the red. The Commonwealth Fund ranked the quality of California's health care the lowest of the 50 states. The state had the highest rate of criminal recidivism in the country.

After his defeat on four propositions governor Schwarzenegger forced the legislature to make up a $26 billion deficit without further tax increases. He targeted waste and fraud, ordering the state to sell off 15% of its auto fleet. He also started efforts to reform California's welfare system, which had 12% of the nation's population, but 30% of the country's welfare.

 In 2011 unions had a great influence in the California Legislature. The Democratic Party controlled every state constitutional office and held strong majorities in both houses of the Legislature. Gov. Jerry Brown had been elected with the help of $30 million in expenditures from the state’s unions.  California sunk under the weight of an unfunded pension liability estimated to be as high as a half-trillion dollars, and cities were on the brink of bankruptcy. There were no major reforms in the state Capitol.

By 2017 California’s infrastructure had been neglected because most public money that might have been spent on infrastructure went instead to government employee pension funds and government payroll departments to pay over-market compensation to unionized public employees.  The total compensation, including benefits, for government employees was extraordinary. The five highest paid employees received $1,031,925, $983,666, $946,289, $805,132, and $804,054. Because new projects had be approved by the environmentalist lobby they were extremely limited.  The labor union lobby’s required approval on projects made them needlessly expensive. The results were congested, inadequate roads and Inadequate water storage capacity.

In 2019 a state law called the Sustainable Groundwater Management Act curbed access to water. Thousands of acres were turned into solar-energy farms and other non-agricultural uses, that took about 85,000 acres of farmland out of production.

The generous public pay scales extended to California’s cities. Police and firefighters pay and benefits were breaking the budgets of cities and counties across California. The average sheriff in a California county in 2019 earned pay and benefits of $158,000. The average police officer in a California city earned pay and benefits of $176,000.  The average firefighter in California’s counties and cities earned, $214,000.

By the year 2020 the payroll was out of control.  California had a $54 billion budget deficit and $1 trillion unfunded pension liability. There were 340,390 government employees bringing home six-figure salary and pension checks. Truck drivers in San Francisco were making $159,000 per year; lifeguards in LA County $365,000; nurses making up to $501,000; the UCLA athletic director earned $1.8 million; and 1,420 city employees out-earned all 50 state governors with$202,000.

2020 was California’s worst year for forest fires. Wildfires claimed millions of acres of forest. The biggest factor causing these wildfires is forest mismanagement, which is caused by environmentalist policies. Between 1950 and 2020, California’s timber industry’s annual harvest declined from 6 billion board feet, which maintained an equilibrium between natural growth and annual removals, to less than 1.5 billion board feet.California’s environmentalists destroyed California’s forests.

California’s public employee unions collect and spend more than $900 million a year. There is no special interest in California that wields more influence over state and local politics than public sector unions. At every level of government, from the office of the governor to a school board managing a district with only a few hundred students, public sector unions are omnipresent. With rare exceptions, to defy their agenda is certain political suicide.

 Governor Newsom’s solution to this disaster was to ask U.S. taxpayers for a bailout. He wrote a letter to Congress requesting $1 trillion in coronavirus aid. Nancy Pelosi obliged by adding $500 billion for the states into the HEROES Act.

More than two million Californians have signed a recall petition against Governor Newsom. The original grievances were unaffordablehousing; record homelessness; rising crime; failing schools and exploding pension debt. Then came the Caronia virus and a locked down population while the prisons were being emptied.

This is the state of California at the end of 2020. Failing schools and crumbling infrastructure. Highest taxes, highest unemployment, and highest cost-of-living.  A hostile business climate. Crippling, punitive regulations and fees. A wide gap between rich and poor. Burning forests, lawless streets. Record numbers of homeless. Unaffordable housing. Water rationing, electricity blackouts. 

California remains a one-party state, with progressive liberals still in absolute control of the state legislature, all higher state offices, and almost every city and county. For the first time in over one hundred years we had a population decline. Increasing taxes, restrictive policies on businesses and ongoing lockdowns have led individuals and Silicon Valley companies to leave California in record numbers over the last two years.

It has long been said, “As California goes, so goes the nation”. That used to be a compliment, now it should be taken as a warning.


Submitted: April 15, 2021

© Copyright 2021 Tuxie. All rights reserved.

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Comments

JE Falcon aka JEF

I'm sorry, you information smacks of republican half-truths and misleading information. The California sales tax rate is 7.5%, not 8.5%, and the population in California grew by several million people during the years you stated, 2007 - 2016. The greatest loss of jobs in California was in the late 1980's, manufacturing went to Asia and to Mexico, closing plants in southern California. Come on, if your gonna sell it, sell it using truths.

Thu, April 15th, 2021 11:00pm

Author
Reply

The combined rate sales tax (state + local) in April 2009 was 8.25%. I did not say the population was not growing during those years, I only commented about the population leaving. I did not state the reasons people were leaving, I only stated the events that were happening at that time, which are factual. If you have factual evidence that anything I wrote was "misleading information" I would like to know what it is.

Fri, April 16th, 2021 11:33am

Stellanotte

You certainly leave out a lot, for instance the effects of The Great Recession, Enron, etc. Silicon Valley waxes and wanes, it has not always been the main employer of the Bay Area, other major employers have come and gone as well. I could go on but who has the time. If you don't care for California, feel free to move to Texas where the governor won't keep energy companies from gouging you when their inadequate power system fails during a blizzard.

Thu, April 15th, 2021 11:04pm

Author
Reply

Apparently you were not in California in 2000, when Gray Daivis was governor. He was recalled mainly because of the way he handled the power problem here. There has been an 800% increase in the wholesale acost of powere since then. As long as we are a one party state, reguardless of wihcih party it is, things will get worse. We need the checks and balances of two parties competing with each other.

Fri, April 16th, 2021 11:21am

88 fingers

I live in New Jersey and we have some of the highest property taxes in the country. Poor infrastructure, public sector unions, teachers, police, etc with control over the state politicians.
No matter where you live, those in power screw those of us who are suppose to be their bosses by the power of the ballot.
But, if we keep electing these politicians over and over again, and still keep getting screwed, then it's only us to blame.
I stopped voting Democrat after'96.
I vote, but not for a Democrat or a Republican. They are both the same.
We the people, it's up to us to change the system by not voting for either of these two and looking at others on the ballot.

Fri, April 16th, 2021 1:05am

Author
Reply

I agree with everything you said. I have voted Republican most of my life and supported them financially. I no longer will, and will support a third party if there is one.

Fri, April 16th, 2021 10:58am

D. Thurmond aka JEF

I have to say that you have a very negative view for someone who has had such a great living experience in California. --- People change, states change, taxes change and always upward. Name one state that sales and property taxes have not gone up. --- As far a Gray Davis, that was another (supposedly conservative) Republican Spend Money foolishly on special election fiasco to the tune of Twenty-Five Million Dollars. And after Schwarzenegger won, he called another special election in 2005, which turned out to be the most costly in California's history, costing voters many millions more. But voters rejected all of the Propositions the Republicans had put on that special election ballot. In other words, all that money was spent out of the state coffers and it did nothing. --- I've been a Democrat and a Republican, and I must say, they both suck in regards to the working stiffs. --- Have California voters learned anything, I doubt it with another recall election in the works. People want State Services, they want nice highways, they want clean water, but they don't want to pay taxes to get them. Some of what you say is true, but it reads like a Republican add. --- But hay, we're both old and will be gone soon, so it really doesn't matter.

Sun, April 18th, 2021 8:39pm

Author
Reply

No one is without blame for the situation we are in today. The only way out is to recognize our mistakes and try to fix them. I believe it is our responsibility to future generation to relieve them of the trillion dollars of debt that we have so selfishly accumulated.

Sun, April 18th, 2021 4:47pm

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