Texas vs. California Update for May 22, 2017

We’re in the home stretch of hammering out the Texas biannual state budget, which has to be completed by May 29. Until then, enjoy another Texas vs. California roundup:

  • Stop me if you’ve heard this before: Texas is once again ranked the best state for business, while California is ranked the worst. (Hat tip: Will Franklin’s Twitter feed.)
  • California’s big-government model eats its young:

    In this era of anti-Trump resistance, many progressives see California as a model of enlightenment. The Golden State’s post-2010 recovery has won plaudits in the progressive press from the New York Times’s Paul Krugman, among others. Yet if one looks at the effects of the state’s policies on key Democratic constituencies— millennials, minorities, and the poor—the picture is dismal. A recent United Way study found that close to one-third of state residents can barely pay their bills, largely due to housing costs. When adjusted for these costs, California leads all states—even historically poor Mississippi—in the percentage of its people living in poverty.

    California is home to 77 of the country’s 297 most “economically challenged” cities, based on poverty and unemployment levels. The population of these cities totals more than 12 million. In his new book on the nation’s urban crisis, author Richard Florida ranks three California metropolitan areas—Los Angeles, San Francisco, and San Diego— among the five most unequal in the nation. California, with housing prices 230 percent above the national average, is home to many of the nation’s most unaffordable urban areas, including not only the predictably expensive large metros but also smaller cities such as Santa Cruz, Santa Barbara, and San Luis Obispo. Unsurprisingly, the state’s middle class is disappearing the fastest of any state.

    California’s young population is particularly challenged. As we spell out in our new report from Chapman University and the California Association of Realtors, California has the third-lowest percentage of people aged 25 to 34 who own their own homes—only New York and Hawaii’s are lower. In San Francisco, Los Angeles, and San Diego, the 25-to-34 homeownership rates range from 19.6 percent to 22.6 percent—40 percent or more below the national average.

  • California continues to slouch toward socialized medicine. “California’s current system relies in large part on employer-sponsored insurance, which is still the source of health care coverage for tens of millions of people. That coverage would disappear under SB 562. Instead of receiving coverage financed by their employers, working Californians would see a tax increase of well over $10,000 per year for many middle-income families.” (Hat tip: Legal Insurrection.)
  • “If you live in California, have a job and pay taxes Governor Jerry Brown would like you to know that you’re a freeloader and he’s tired of your complaining.”
  • “Congratulations, California. You keep electing these same Democrats over and over again. and then you act surprised when they make you one of the most heavily taxed populations in the country. And when you finally raise your voices to protest the out of control taxation and spending, the state party’s titular leader is brazen enough to come straight out and tell you what he really thinks of you.”
  • Has the Democrats latest gas tax hike created an actual tax revolt in California? (Hat tip: Ace of Spades HQ.)
  • One lawmaker is the target of a recall petition over the tax hike: “Perceived as the most vulnerable of the legislative Democrats who passed Gov. Jerry Brown’s gas and vehicle tax package by a razor-thin margin, freshman state Sen. Josh Newman, D-Fullerton, faced an intensifying campaign to turn him out of office, potentially depriving his party of the two-thirds majority that allowed them to pass Brown’s infrastructure bill in the first place.”
  • Vance Ginn’s monthly summary of Texas economic data. Lot’s of data, including the fact that all major Texas cities created jobs in 2016 except Houston, which was down just a smidge.
  • San Bernardino could go bankrupt again.
  • Buying a house in Southern California is insane. (Hat tip: Stephen Green at Instapundit.)
  • California starts selling bonds for the doomed “high speed rail.”
  • 40-60 “youth” flash mob robs passengers on Oakland BART train. The complete absence of descriptions or pictures cues the astute modern American reader in to the ethnic makeup of the mob. (Hat tip: Ace of Spades HQ.)
  • “Gov. Jerry Brown and state Treasurer John Chiang have a plan to help cover the state’s soaring pension payments: Borrow money at low interest rates and invest it to make a profit. What could go wrong?” I can see it now: “Come on seven! Baby needs a new High Speed Rail!” Also this: “The problem was exacerbated because Brown’s so-called pension “reform” of 2012 failed to significantly rein in retirement costs. Statewide pension debt has increased 36 percent since his changes took effect.” (Hat tip: Pension Tsunami.)
  • “Riverside utilities dispatcher triples salary to nearly $400,000 with state’s 10th largest overtime payout.” (Hat tip: Pension Tsunami.)
  • And speaking of California public employees working overtime:

    The time cards Oakland city worker Kenny Lau turned in last year paint a stunning, if not improbable, picture of one man’s work ethic.

    Lau, a civil engineer, often started his days at 10 a.m. and clocked out at 4 a.m., only to get back to work at 10 a.m. for another marathon day. He never took a sick day. He worked every weekend and took no vacation days.

    He worked every holiday, including the most popular ones that shut down much of the nation’s businesses: 12 hours on Thanksgiving and eight hours on Christmas.

    In fact, his time cards show he worked all 366 days of the leap year, at times putting in 90-plus-hour workweeks. He worked so much that he quadrupled his salary. His regular compensation and overtime pay — including benefits, $485,275 — made him the city’s highest-paid worker and the fourth-highest overtime earner of California public employees in 2016.

    (Hat tip: Pension Tsunami.)

  • The Los Angeles Unified School District has decided it can break federal immigration laws at will. “No immigration officers will be allowed on campus without clearance from the superintendent of schools, who will consult with district lawyers. Until that happens, they won’t be let in, even if they arrive with a legally valid subpoena.” There’s no way such a genius decision could possibly backfire on them… (Hat tip: Director Blue.)
  • How California hurts the poor by jacking up traffic fines. (Hat tip: Pension Tsunami.)
  • “San Diego using loophole to hand out large raises during pay freeze.” It’s a blatant attempt to evade Proposition B.
  • An auditor funds the University of California President’s office of Janet Napolitano had a secret slush fund:
    • The Office of the President has accumulated more than $175 million in undisclosed restricted and discretionary reserves;
      as of fiscal year 2015–16, it had $83 million in its restricted reserve and $92 million in its discretionary reserve.

    • More than one-third of its discretionary reserve, or $32 million, came from unspent funds from the campus assessment—an annual charge that the Office of the President levies on campuses to fund the majority of its discretionary operations.
    • In certain years, the Office of the President requested and received approval from the Board of Regents (regents) to
      increase the campus assessment even though it had not spent all of the funds it received from campuses in prior years.

    • The Office of the President did not disclose the reserves it had accumulated, nor did it inform the regents of the annual undisclosed budget that it created to spend some of those funds. The undisclosed budget ranged from $77 million to
      $114 million during the four years we reviewed.

    • The Office of the President was unable to provide a complete listing of the systemwide initiatives, their costs, or an assessment of their continued benefit to the university.
    • While it appears that the Office of the President’s administrative spending increased by 28 percent, or $80 million, from fiscal years 2012–13 through 2015–16, the Office of the President continues to lack consistent definitions of and methods for tracking the university’s administrative expenses.

    An Ex-Obama Administration official with a secret slush fund? What are the odds?

  • Texas continues to attract net in-migration from every region.
  • California wants to tax rockets launched from California into orbit, based on miles traveled away from California. I’m sure many of Texas own spaceflight companies will welcome any business California drives out…
  • Speaking of spaceflight, Elon Musk’s Space X, just like Telsa, is more emblematic of subsidies and special favors than the free market:

    Tesla survives on the back of hefty subsidies paid for by hard-working Americans just barely getting by so that a select few can drive flashy, expensive electric sports cars. These subsidies were originally scheduled to expire later this year, and Tesla is lobbying hard to make sure that taxpayers continue to pay $7,500 per car or more to fund their business model. Tesla even tried to force taxpayers to pay for charging stations that would primarily benefit their business. That is not what Musk’s high priced image managers will tell you, but it’s the truth.

    SpaceX is even worse — its business model isn’t to invest its money developing competing space products that meet the same safety and reliability standards as the rest of the industry. Instead, its business model is to get billions in taxpayer money and push, bend, and demand regulatory special favors. Then, it produces a rocket that is more known for failed launches, long delays, and consistently missed deadlines.

  • How California’s air emission rules went to far.
  • “California may end ban on communists in government jobs.” (Hat tip: Ace of Spades HQ.)
  • Bachrach Clothing Stores File for Bankruptcy Protection in Los Angeles.”
  • “California solar installer HelioPower filed for Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court for the District of Nevada.”
  • Hudson Products relocating from Tulsa to Rosenberg, Texas.
  • “Bay Area bookseller Bill Petrocelli is filing a lawsuit against the state of California, hoping to force a repeal of the state’s controversial ‘Autograph Law.’ The law, booksellers claim, threatens to bury bookstore author signings under red tape and potential liabilities. Petrocelli, co-owner of Book Passage, filed Passage v. Becerra in U.S. District Court for the North District of California, pitting the bookstore against California State Attorney General Xavier Becerra.” As a bookseller on the side, I can tell you that California’s law is particularly asinine and is completely ignorant of the signed book trade.
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