Naturally the day after I post my usual Texas vs. California update, I see this five part California in Crisis series by Conn Carroll in The Examiner.
The first part is a general overview.
In his state of the state speech, Brown claimed, “California lost 1.3 million jobs in the Great Recession, but we are coming back at a faster pace than the national average.” The first half of Brown’s statement is true, but the second half is not. California has only gained back 556,000 jobs since the recession ended, or 42 percent of those lost — well below the national average of 60 percent regained. As a result, California’s unemployment rate is still near double-digits at 9.8 percent. By comparison, Texas, which lost 427,000 jobs during the recession, has gained them all back and created an additional 265,000.
California is no longer a model that other states want to or should emulate. It currently has the nation’s third highest unemployment rate, its highest poverty rate and more than one-third of the nation’s welfare recipients.
What happened?
To make a long story short, the same political constituencies that have made Brown’s Democratic Party invincible at the ballot box have also made the state unable to compete economically. California public employees, who are represented by the nation’s most politically powerful government unions, benefit from some of the nation’s most generous compensation packages. These unions have made it nearly impossible to keep spending down, thus making debt and higher taxes inevitable.
These unions also make it impossible to improve how government services are delivered to taxpayers. As a result, while California once had the most admired education system in the nation, it now ranks near the bottom in almost every measured educational category.
The state’s powerful environmental lobby has secured a slew of green energy regulations, including strict clean air rules, the nation’s first carbon cap-and-trade program and an ambitious renewable energy mandate. As a result, energy prices have shot up, consumers now have less to spend on everything else they need to survive, and many manufacturers can’t stay profitable in the state.
Finally, wealthy urban environmentalists have completely inverted the infrastructure spending priorities that once made California an engine of economic and population growth. Endangered species of wildlife are now favored over farmers and food. Highways and suburbs are losing out to mass transit and urban centers. The emerging result is a disappearing middle class, and what’s left of the state is split between a highly educated, landed, wealthy and elderly elite, and a poor, government-dependent, uneducated lower class.
The second part goes into how Jerry Brown’s budget surplus is illusory: “Since the recession began, governors’ budget projections have overestimated revenue by an average of 5.5 percent. Apply that average to Brown’s 2013 projections, and California’s budget would suddenly go from $1 billion in the black to $3.9 billion in the red.”
Also:
California is controlled by the Democratic Party, and the California Democratic Party is controlled by the state’s government employee unions. You can’t win a statewide election there without at least the tacit approval of those unions. And for decades, the cost of their friendship has been protection from spending cuts in lean times and generous retirement package increases in good times.
Further:
Throughout the 1990s and 2000s, government unions at the state level won huge increases in retirement benefits, including a lowered retirement age and more favorable benefit formulas. As a result, the state’s two biggest retirement funds, the California State Teachers’ Retirement System, or CalSTRS, and the California Public Employees’ Retirement System, or CalPERS, are both underfunded by $64 billion and $52 billion respectively. According to a recent report, Brown would need to spend an additional $4.5 billion per year just to make CalSTRS solvent.
The third part focuses on California’s expensive-yet-failing education system, while the fourth and fifth parts deal with green delusions. Including this gem: “fewer than 2,500 green jobs have been created in California since 2010.”
There’s not a whole lot that will be unfamiliar if you’ve been following my Texas vs. California updates, but it’s a very solid overview series. And yes, Texas gets a mention.
Read the whole thing.