It wasn’t Jarvis and Proposition 13
It took some amazing incompetence to toss this best-endowed of places down into the dustbin of history. Yet conventional wisdom views the crisis largely as a legacy of Proposition 13, which in effect capped only taxes.
This lets too many malefactors off the hook. I covered the Proposition 13 campaign for the Washington Post and examined its aftermath up close. It passed because California was running huge surpluses at the time, even as soaring property taxes were driving people from their homes.
Admittedly it was a crude instrument, but by limiting those property taxes Proposition 13 managed to save people’s houses. To the surprise of many prognosticators, the state government did not go out of business. It has continued to expand faster than either its income or population. Between 2003 and 2007, spending grew 31%, compared with a 5% population increase. Today the overall tax burden as percent of state income, according to the Tax Foundation, has risen to the sixth-highest in the nation.
But the fundamental problem remains. California’s economy–once wondrously diverse with aerospace, high-tech, agriculture and international trade–has run aground. Burdened by taxes and ever-growing regulation, the state is routinely rated by executives as having among the worst business climates in the nation. No surprise, then, that California’s jobs engine has sputtered, and it may be heading toward 15% unemployment.
Read the whole thing (h/t, Instapundit)
CA’s issues aren’t very different from those of NYC or NY or NJ (or Detroit)
NYC is home of world’s financial industry; Silicon Valley is home of world’s tech industry. Both NYC and SV would benefit from millions of economic underachievers leaving these high-cost, high-tax places and for companies to relocate low-wage, low-skill jobs to cheaper locales
LA wants stimulus funds for the Michael Jackson memorial service – they consider it a “shovel ready” project.
Chris,
Looks like one of Walt’s daughter’s worked extra hard to sell her townhouse, eh?
http://cityfile.com/dailyfile/6417
http://www.observer.com/2009/real-estate/marisa-noel-browns-madoff-tainted-townhouse-gets-deal-975-m
CA had a balanced budget in 1996 with a Republican Governor. A Democrat Governor took office in 1998 and noticed HUGE tax receipts from the stock market tech boom. They raised spending as if it would never end. It did. But spending continued. Spending on schools, jails, and healthcare for illegal aliens didn’t help the economy. When Arnold took over he inherited the largest debt out of all 50 states (in fact it was larger than 49 other states combined). He’s put band aids on the problems but now it’s “Judgement Day”. CT has enjoyed a large boom of its own with finance – Hedge Funds, Private Equity, and Investment Banks. Word to the people in Hartford…. Avoid your own “Judgement Day”
Dude -
Turn on CNN and watch the MJ tribute. I am second row, left center, right behind Al. I will wave to you, home boy.
Your Pal,
Walt
I just read that 50% more people watched MJ’s funeral than watched BHO’s inauguration.
Kinda says it all – eh?
A Democrat Governor took office in 1998 and noticed HUGE tax receipts PowerBall from the stock market tech boom.