Proposition 13 and Milton Friedman
Yesterday on this site, Joe Mathews argued that conservatives and Republicans were not adhering to the philosophy of one of their guiding lights, Nobel prize-winning economist Milton Friedman, by resisting any change to Proposition 13. Mathews stated that Friedman would prefer cuts in income or sales taxes rather than property taxes.
It is true that Friedman believed that property taxes would be reflected in the housing cost and that the cost of the house would be adjusted according to the amount of property tax that had to be paid on the property. However, this economic theory did not take into effect uncontrolled property taxes on property that was not on the market.
L.A. Has Work to Do on Jobs
A few weeks ago I had lunch with an acquaintance whose business is tied to the entertainment industry. He lamented that he knows of many companies that have left Los Angeles in recent years or were thinking of doing so now.
A look of disgust came over his face. “If I didn’t have to be here, I’d leave, too,” he said.
His complaints were the usual ones: high costs, high taxes, lots of rules and regulations, and what he viewed as feckless local political stewardship.
Those are the kinds of comments you hear but you kind of brush off. Like the weather, everyone complains about taxes and weak-kneed leaders, but no one really does anything. On net, not that many businesses leave. Do they?
What’s Going On with California Public Works Projects and Job Creation
The state Employment Development Department’s Labor Market Information Division (LMID) has a wealth of data on employment in California (www.labormarketinfo.edd.ca.gov) . LMID is a starting point for most employment issues, including the current construction employment meltdown, and the impacts of transportation, infrastructure and other public works projects.
The numbers on construction employment are striking. In December 2006 California had 937,000 construction jobs. Over the past 30 months that number has steadily declined, so that the state was down to 642.000 construction jobs in June 2009.
The more revealing LMID numbers are in the sub-sectors. LMID divides construction employment into three main subsectors: (i) “Construction of Buildings” (residential and commercial buildings) (ii)“Specialty Trade Contractors” (building equipment contractors, building foundation, finishing and exterior contractors) and (iii) “Heavy and Civil Engineering Construction” (the public works jobs). Although it is often thought that most construction jobs are in public works, this is the smallest of the three sub-sectors by wide margin.