I hope legislators taking this week off are reading the newspapers. A number of articles serve as a barometer to California budget troubles. Simply stated, California taxes a lot, spends a lot, doesn’t seem to have much to show for it and jobs and taxpayers are leaving the state.
California gets much of its revenue from allowing business to flourish and to provide good jobs. But by making California an expensive place to do business we are driving the job makers away.
This Oakland Tribune article reports on the Auto Club closing three call centers in Northern and Southern California eliminating 900 jobs. Why? Because according to a spokeswoman from the California State Automobile Association: "It costs more to do business in California than in other states. Moving our call center operations to states outside of California gives us an opportunity to reduce our operating costs."
And with those jobs go the taxes that would have ended up in California government coffers.
Its not just 900 jobs that are leaving. Today’s Wall Street Journal editorial states that between 1996 and 2005, "1.3 million more Americans left than came to California. And the people who are leaving are disproportionately those with higher incomes…"
And with those higher-income citizens go the taxes that would have ended up in California government coffers.
The Journal concludes that the driving force behind this migration is out-of-control taxation.
Despite that loss of taxpayers the state has increased revenue and spending at a tremendous clip, a 40% spending increase in just four years, as USC professor John Matsusaka points out in his op-ed in the Los Angeles Times.
Professor Matsusaka asks an excellent question: Where has the money gone? California doesn’t feel 40% better off than four years ago.
Perhaps, if we controlled spending, reduced taxes, and encouraged business, taxpayers and jobs would remain in California and spur the economy to new heights supplying the revenue that California needs. It’s worth a try. Evidence indicates the high tax; big spending; job-killing formula is not working.