New migration tendencies in California:
The state’s progressive tax-and-spend experiment is broken, threatening basic services, from courts and parks to education and health care for its most vulnerable citizens. Mr. Brown’s tax initiative only exposes the state to an ever more dangerous roller-coaster ride.
No wonder many Silicon Valley CEOs say they won’t expand in California because of high taxes and burdensome regulation. And no wonder net migration has recently reversed, with hundreds of thousands of workers and their families leaving the state in search of better opportunities.
California’s economy, which used to outperform the rest of the country, now substantially underperforms. The unemployment rate, at 10.9%, is higher than every other state except Nevada and Rhode Island. With 12% of America’s population, California has one third of the nation’s welfare recipients.
Partly due to generous union wages and benefits, inflexible work rules and lobbying for more spending, many state programs and institutions spend too much and achieve too little. For example, annual spending on each California prison inmate is equal to an entire middle-income family’s after-tax income. Many of California’s K-12 public schools rank poorly on standardized tests. The unfunded pension and retiree health-care liabilities of workers in the state-run Calpers system, which includes teachers and university personnel, totals around $250 billion.
Many Americans fear the federal fiscal train wreck will turn us into Greece. But, barring major change, they need look no further than California to see what this future portends. Relying on ever-higher taxes to fund payments to an outsized population of benefit recipients is a recipe for exporting prosperity. That is one California trend that other states emulate at their peril.