If anyone needs further evidence that we are in the midst of a historic economic downturn in California, please consider the following charts. The fundamental drivers of the economy – employment, income and sales – are trending far, far below previous recessions. It’s no coincidence that these are also the economic engines driving state revenues, and provide another compelling reason why California residents and businesses simply cannot be asked to shoulder additional tax burdens to address the state budget deficit.
1. Since 1980, industry employment has never fallen more than five percent below previous employment peaks – until last month.
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2. Since 1980, per capita personal income in California has never declined year-over-year for two consecutive years – until this year.
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3. Quarterly taxable sales have declined in previous recessions, but have never crashed like they have this past quarter.
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This is the perspective lawmakers must keep in mind as they consider how to resolve the latest cash and budget crises.