Texas vs. California Update for February 15, 2017
Welcome to another Texas vs. California Roundup!
California Governor Jerry Brown wants to hike gas taxes by 42% to bail out CalPERS.
Brown’s pension reforms have failed:
And speaking of Brown: Math is hard.
Why California can’t repair its infrastructure: “California’s government, like the federal government and most other state and local governments, spends its money on salaries, benefits, pensions, and other forms of employee compensation. The numbers are contentious — for obvious political reasons — but it is estimated that something between half and 80 percent of California’s state and local spending ultimately goes to employee compensation.”
Put another way: “Governor Moonbeam and the other leftist kooks in charge are flushing a staggering $10 billion down an unneeded high-speed rail project, on top of the still more staggering $25.3 billion per year they spend on the illegal aliens they have gone out of their way to welcome.” (Hat tip: Director Blue.)
California can’t afford green energy:
Since 2012 passage of his much-heralded changes to state retirement laws for public employee, the pension debt foisted on California taxpayers has only grown larger.
The shortfall for California’s three statewide retirement systems has increased about 36 percent. Add in local pension systems and the total debt has reached at least $374 billion. That works out to about $29,000 per household.
It’s actually much worse than that. Those numbers are calculated using the pension systems’ overly optimistic assumptions about future investment earnings.
Using more conservative assumptions, the debt could be more than $1 trillion.
Three of the ten least affordable cities in the World are in California: Los Angeles, San Francisco and San Jose.
Austin named best city to live in the U.S. But wait! San Jose ranks third! I can only assume that “affordability” was not a significant criteria. Dallas/Ft. Worth ranks 15th (one ahead of San Francisco), Houston 20th, San Antonio 23rd (one behind San Diego).
“A sizzling residential real estate market fueled by incoming Californians, low supply, high demand, flat salaries, and local property taxes are pricing people out of homeownership in Austin.” More: “The Texas A&M Real Estate Center examined the Austin local market area (LMA) over five years. In January 2011, the Austin-Georgetown-Round Rock area median home prices were $199,700. By January 2015, that median hovered at $287,000. At the end of 2016, university real estate analysts found the home mid-price point at $332,000.” Of course, in my neck of the woods, $332,000 will buy you a 2,500 square foot house, while in San Francisco, you’d be lucky to find a 500 square foot condo…
“An IGS-UC Berkeley poll shows that 74 percent of Californians want sanctuary cities ended; 65 percent of Hispanics, 70 percent of independents, 73 percent of Democrats and 82 percent of Republicans.”
Of the top 20 cities for illegal aliens, five (Los Angeles, San Francisco, San Jose, San Diego and Riverside) are in California, while three (Houston, Austin and Dallas/Ft. Worth) are in Texas. I’m actually a bit surprised to see that San Antonio isn’t on that list, while Seattle and Boston are. “American citizens who paid into the system don’t receive benefits like long-term medical care because — in part — we’re all subsidizing aliens.”
California pays $25.3 billion in illegal alien benefits, or $2,370 per household. (Hat tip: Director Blue.)
By contrast, Texas pays $12.1 billion in illegal alien benefits, or $1,187 per household. (IBID)
“In testimony provided before the California Senate’s Public Safety Committee, Senate President Pro Tem Kevin De Leon (D-Los Angeles) decided to admit that “half of his family” is residing in the United States illegally and with the possession of falsified Social Security Cards and green cards.”
“California spent on high-speed rail and illegal immigrants, but ignored Oroville Dam.”
Pensions are breaking budgets across San Diego. (Hat tip: Pension Tsunami.)
“Despite California having some of the best recreation spots in the world, we have systematically reduced our business in California by 50%, and I have a moratorium in place on accepting new business (I won’t even look at RFP’s and proposals to avoid being tempted.)”
That same blogger on why his company pulled out of Ventura, California. Like this:
California has the highest taxes overall in the nation, worst roads, underperforming schools, and the recent budget has at least a $1.6 billion shortfall.
Moreover, depending on how the numbers are analyzed California has either a $1.3 or a $2.8 trillion outstanding debt. This is before counting the maintenance work needed for infrastructure, particularly roads, bridges and water systems. Yet tax increases aren’t covering these obligations.
It took years in Ventura County to make even the simplest modifications to the campground we ran. For example, it took 7 separate permits from the County (each requiring a substantial payment) just to remove a wooden deck that the County inspector had condemned. In order to allow us to temporarily park a small concession trailer in the parking lot, we had to (among other steps) take a soil sample of the dirt under the asphalt of the parking lot. It took 3 years to permit a simple 500 gallon fuel tank with CARB and the County equivalent. The entire campground desperately needed a major renovation but the smallest change would have triggered millions of dollars of new facility requirements from the County that we simply could not afford.
California has some of the highest taxes in the nation, but can’t pay for road maintenance:
A local attorney held regular evening meetings with my employees to brainstorm new ways the could sue our company under arcane California law. For example, we went through three iterations of rules and procedures trying to comply with California break law and changing “safe” harbors supposedly provided by California court decisions. We only successfully stopped the suits by implementing a fingerprint timekeeping system and making it an automatic termination offense to work through lunch. This operation has about 25 employees vs. 400 for the rest of the company. 100% of our lawsuits from employees over our entire 10-year history came from this one site. At first we thought it was a manager issue, so we kept sending in our best managers from around the country to run the place, but the suits just continued.
Texas has no state income tax, yet excellent highways and schools that perform above average, way above California’s bottom-dwellers. Yet both states have similar demographics. For example, in the 2010 U.S. Census, Texas was 37% Hispanic, California 37.6%.
Texas is a First World state with no state income tax that enjoys great roads and schools. California is a Third World state restrained from getting worse only by its umbilical-cord attachment to the other 49 states, a cord the Calexit movement wants to cut, but won’t get to.
California is Venezuela on the Pacific, a Third World state and wannabe Third World country; a place with great natural beauty, talented people, natural resources – and a government run by oligarchs and functionaries who treat the rest of us as peons.
(Hat tip: Pension Tsunami.)
“Texas Ends 2016 with 210,200 Jobs Added Over the Year.”
All Houston does economically is win.
The Houston metropolitan area’s population now stands at 6.6 million with the city itself a shade under 2.3 million. At its current rate of growth, Houston could replace Chicago as the nation’s third-largest city by 2030.
Why would anyone move to Houston? Start with the economic record.
Since 2000, no major metro region in America except for archrival Dallas-Fort Worth has created more jobs and attracted more people. Houston’s job base has expanded 36.5%; in comparison, New York employment is up 16.6%, the Bay Area 11.8%, and Chicago a measly 5.1%. Since 2010 alone, a half million jobs have been added.
Some like Paul Krugman have dismissed Texas’ economic expansion, much of it concentrated in its largest cities, as primarily involving low-wage jobs, but employment in the Houston area’s professional and service sector, the largest source of high-wage jobs, has grown 48% since 2000, a rate almost twice that of the San Francisco region, two and half times that of New York or Chicago, and more than four times Los Angeles. In terms of STEM jobs the Bay Area has done slightly better, but Houston, with 22% job growth in STEM fields since 2001, has easily surpassed New York (2%), Los Angeles (flat) and Chicago (-3%).
More important still, Houston, like other Texas cities, has done well in creating middle-class jobs, those paying between 80% and 200% of the median wage. Since 2001 Houston has boosted its middle-class employment by 26% compared to a 6% expansion nationally, according to the forecasting firm EMSI. This easily surpasses the record for all the cities preferred by our media and financial hegemons, including Washington (11%) and San Francisco (6%), and it’s far ahead of Los Angeles (4%), New York (3%) and Chicago, which lost 3% of its middle-class employment.
(Hat tip: Pension Tsunami.)
Texas conservative budget overview vs. the 2018-2019 proposed budget.
On the same subject: how to reduce the footprint of Texas government.
“Berkeley funds the Division of Equity and Inclusion with a cool $20 million annually and staffs it with 150 full-time functionaries: it takes that much money and personnel to drum into students’ heads how horribly Berkeley treats its “othered” students.”
New LA housing initiative to undo previous housing initiative. Frankly all of them sound like market-distorting initiatives guaranteed to backfire…
“California’s bullet train could cost taxpayers 50% more than estimated — as much as $3.6 billion more. And that’s just for the first 118 miles through the Central Valley, which was supposed to be the easiest part of the route between Los Angeles and San Francisco.”
“For the past five months, BART has been staffing its yet-to-open Warm Springs Station full time with five $73,609-a-year station agents and an $89,806-a-year train dispatch supervisor — even though no trains will be running there for at least another two months.” (Hat tip: Pension Tsunami.)
“After studying “tens of thousands of restaurants in the San Francisco area,” researchers Michael Luca of Harvard Business School and Dara Lee Luca of Mathematica Policy Research found that many lower rated restaurants have a unique way of dealing with minimum wage hikes: they simply go out of business.”
Meet Gordon, the robot barista. How’s that $15 an hour minimum wage working out for you, San Francisco?
“Nestle USA announced today that it is moving 300 technical, production and supply chain jobs to the Solon [Ohio] plant as part of the company’s plan to relocate its headquarters to Arlington, Virginia, from Glendale, California.”
Auto dealer AutoAlert is moving it’s headquarters from Irvine, California to Kansas City.
Peter Thiel to run for governor of California?
The Oakland Raiders may not be moving to Las Vegas after all, because billionaire Sheldon Adelson backed out of the stadium deal, accusing Raider owner Mark Davis of trying to screw him.
Now there’s talk the Raiders may rexamine moving to San Antonio.
Or even Dan Diego.
Lawsuits are flying over the Dallas Police and Fire pension fund debacle. (Hat tip: Pension Tsunami.)
Tags: 2018 Election, Austin, AutoAlert, BART, Berkeley, Border Controls, California, CalPERs, Dallas, Democrats, Ft. Worth, Houston, Illegal Aliens, Irvine, Jerry Brown, Kansas City, Kevin De Leon, minimum wage, Nestle USA, Oakland Raiders, Ohio, Peter Thiel, Regulation, Republicans, San Antonio, San Francisco, San Jose, Sheldon Adelson, Texas, unions, Vance Ginn, Ventura County, welfare, Welfare State