The Golden State Needs a Course Correction in the New Year

As 2022 draws to a close, despite the positive bleatings of the politicians, this was not a great year for California.

The once-projected $100 billion surplus could have been used to reconfigure the state’s tax system, which is overdependent on the PIT — the personal income tax. It wasn’t. Instead, the state’s nonpartisan Legislative Analyst’s Office is predicting a $25 billion deficit beginning next July 1.

Everybody knows the PIT is like a roller coaster: revenue goes way up in good times, way down in bad times. It’s nosediving now. The latest among many high-tech companies suffering layoffs, from the San Francisco Chronicle, “Thumbtack, the San Francisco online services marketplace, is laying off around 14% of its staff.”

In the Legislature, Republicans not only failed to gain seats, they lost one in the Assembly, to 18 of 80; and another in the Senate, to 8 of 40. In both houses they’re well below the one-third needed to stop a tax increase. Even if you’re not a Republican, you might feel the effects of their impotence if the supermajority Democrats decide to increase your taxes to make up for that $25 billion deficit.

Democrats easily won all the statewide offices, beginning with the governor. Whatever the reasons for the GOP’s failure, one-party states don’t do well. Democracy only exists if there’s competition.

Republicans also lost a majority on the Orange County Board of Supervisors for the first time in five decades. Democrats also picked up a majority on the Riverside County Board of Supervisors The boards’ 3-2 Democratic majority will be entirely in fealty to the public-employee unions at a time when critical fiscal decisions will run against profound economic uncertainty.

Clearly, the party that ran San Francisco and Los Angeles into the ground isn’t doing so well at the state level, either.

Several of my friends have skedaddled out of California this year for the Volunteer State, with several others planning to go in 2023 or ‘24. They’re part of an exodus of another 250,000 this year to other states. That means the Golden State, which lost one House member after the 2020 U.S. Census, probably will lose another — or two — in 2030.

Contrast that with the 1980s, when I came here in 1987. The state gained 6 million in population and six House seats.

Gov. Gavin Newsom calls it the California Way. But for increasing numbers of people, it’s the way out.

The exodus hasn’t helped housing affordability. According to the California Association of Realtors, just 36% of households can afford to buy a home in Q3, compared to 42% a year earlier. Prices have dipped a bit, but of course interest rates have soared, and along with them mortgages.

The median home price in Orange County, where I live, still is $1.03 million. The only people who can afford those kinds of prices are millionaire entrepreneurs who haven’t left yet and tax-stuffed members of the public-employee unions.

One-party rule has also failed California’s kids.

Reports on schools post-pandemic showed test scores dropped sharply due to the excessively severe lockdowns. Approximately 84% of black and 79% of Latino students failed to meet state math standards. Even though the state, according to the June budget document, is spending nearly $24,000 a year per student.

Some of the few bright spots this year were when San Francisco recalled three nutty leftist school board members, then recalled radical District Attorney Chesa Boudin.

Among Republicans, when a litany of problems with California is listed, someone is likely to crack, “Well, the weather still is great!” Indeed it is.

Click here to read the full article in the Orange County Register

Poverty plan offers a wealth of bad ideas

As reported by the San Diego Union-Tribune:

— As legislators return to the Capitol in January, there’s little question the issue of poverty will be high on the agenda. Legislative Democrats have been dismayed that the governor held the line on new social-welfare spending last session and are eager to step up public funding for new and existing programs. And news reports suggest a major new anti-poverty initiative, backed by some charitable organizations, already is garnering serious donations.

Expect poverty to be “big” this year. Even legislative Republicans haven’t resisted too much. They’ve generally been OK with new spending proposals – provided they’re funded without raising taxes. We’ll have to wait and see any specifics from legislators, but we already know the details of the so-called “Lifting Children and Families Out of Poverty Act.” It’s likely to spark a spirited debate during the November 2016 election season given the size of the tax increase it would impose on property owners.

That initiative is one of several possible tax-hike intiatives on the ballot, and proponents appear ready to start collecting signatures. It would impose what supporters call “a sensible and fair surcharge on properties with values of over $3 million” that keeps “all Proposition 13 property tax protections against reassessments … in place.”

The resulting cash flow – between …

Click here to read the full article

Economic Cheer

Economic boost

Nate Beeler, The Columbus Dispatch

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