The Beholden State: How public sector unions broke California
city-journal.org
city-journal.org
This is not an impartial source when it comes to California's problems, not that they are wrong, unions are part of the problem, but there's also the 2/3 rule for raising taxes, corrupt and ineffective politicians who have constructed non-competitive districts for themselves, the initiative system and ultimately California voters who apparently don't give a rats ass about anything unless it is approving more services and lower taxes for themselves.
California has the highest state taxes in almost every tax category, from personal income, to corporate income, to minimum corporate tax ($800 corporate taxes payable if you broke even or lost money, ouch), highest vehicle registration costs, vehicle re-sale taxes, high sales tax, high hotel taxes, etc, etc.
It doesn't matter how much money you bring in if you consistently spend more than it.
California should be studied as what not to do because the fact that it has become so screwed up is almost beyond belief
Edit: I forgot shipping. One whole side of the state is along the pacific and we're the closest landlocked state to Asia where all the cheap goods are made
WA's government is better, but not vastly; TX seems like the most solvent state with a viable startup nexus (I don't see Alaska becoming a startup center unless global warming vastly improves things :).
Most California voters apparently want it both ways: spend a lot on services, public employees, prisons and the rest without raising enough money to pay for them. Almost nobody seems to care that this is completely unsustainable.
Oh, and our next governor? Yeah, it either Jerry "Moonbeam" Brown, who already proved how ineffectual he is a governor, not to mention as mayor of Oakland, which has now gone completely to crap, or Meg Whitman who may have her heart in the right place but seems completely unprepared.
Sorry, as someone who has lived my entire life in California, I find this situation extremely frustrating.
Or, if they are not factually wrong but misleading and biased in their presentation, could you point to an alternative analysis that shows California's union obligations to be reasonable?
http://www.educationworld.net/salaries_us.html
"Average teacher salaries. California had the nation's highest average salary in 2002-03, at $55,693. States joining California in the top tier were Michigan, at $54,020; Connecticut, at $53,962; New Jersey, at $53,872; and the District of Columbia, at $53,194."
55000/year average for the people teaching children doesn't seem the slightest bit unreasonable to me given the amount of work they are required to do.
The statement 'highest salaries in the country' makes things sound awful, into you take into account that many teachers in many places are (IMO) woefully under paid.
The same applies in most of the other industries.
Do some research and try to get some perspective on the problem - there are some big problems in california but laying them all at the feet of the unions is just ridiculous and lacks a true sense of perspective.
not that they are wrong, unions are part of the problem
Caveat emptor. When a traditional foe of unions pens an article blaming all of California's problems on unions and nobody else, yes, I think it's wise to take their words with several grains of salt, don't you?
Hasn't produced much in the way of spending as a fraction of CA govt expenditures. (High speed rail may.) Seriously - total up all the initiative driven spending and compare it to what CA spends. (And no, you don't get to count initiatives that the legislature put on the ballot.) Yes, there are billions of dollars of initiative-driven spending, but it's a cup or two in the bucket.
The shift to bonds isn't the voters' idea either.
Unions are just one of the many special interests that win from that silly constitutional issue.
Supermajorities to do normal things are bad.
If they had a normal budgetary process, then they'd have more normal repubs cut taxes/services vs dems add them sort of dynamic that the rest of the country does.
The people of California are well intentioned. So they tried a very liberal approach to their public employees pensions. This quickly got out of control. But the fact that they need 2/3rds of the vote to get anything done combined with special interest money has made it impossible to repeal this well intentioned system that simply doesn't work. Because doing so would require a cut in the budget for said program. So we're being bankrupted.
This is true of many of California's problems. Our State Government lacks the ability to even pass a budget on time so repealing the public sector mess that has been created is far beyond what they are able to accomplish
And is the 2/3rds vote on everything, just budget related items, or taxes? I hear the complaint about how hard it is to raise taxes in California alot, but California has a high tax burden.
Repubs are just under 40% of the CA legislature.
The stereotype is that repubs would cut any budget, so you're most of the way to a cut without any Dems.
The 2/3 req means that around a third of the Dems have to agree to a cut.
A majority reqt means that around one sixth of the Dems have to agree to a cut.
In other words, the reason that CA doesn't cut things is that so few Dems are unwilling to do so.
The reason that CA's spending goes up is that all of the Dems want it to go up and they manage to find a Repub or two to go along.
Do you really think that letting Dems pass a budget without any Repub votes (and losing some Dem votes) would result in lower spending?
Raise Taxes
OR
Cut Services
If you strip the 2/3rds rule at the moment, you'll see taxes go up. And you know what party high taxes are great for, republicans. You'll get a more active republican party and you'll be able to win more seats, especially after the taxes go up.
Most importantly, you'll get fiscal republicans running for office, instead of social republicans, and independent and some dems are much more likely to defect to social republicans than moral republicans.
So if you ditch the 2/3rds rule, you'll get 4 years of democratic rule, and you'll have a good shot at gaining republican control of the house after that.
Remember, California is not the liberal mecca people portray it as in the East Coast media. It's a very purple state which has some very republican ideas widely popular in the state along with some very relaxed republicans which have wide voter approval. It's the state of Regan, that keeps hiring republican governors for some reason. While right now, most of the legislators are democrats, if the 2/3rds rule ended, republicans could actually win the legislature.
And more importantly, BOTH parties could get working budgets that don't leave the state doing wacky things with furloghs, random shutdowns, and paying people in scrip.
Remember, killing the 2/3rds rule also allows repubs to be repubs. The teachers unions and prisons unions in Cali will support republicans as well as long as they're on board with cuts. Republicans now are in the tenuous position of having to support organized labor to get elected. That's a very odd message to support in today's republican party.
It's just people who are terrified of the other side rather than terrified of broken government who keep the state locked up in the status quo instead of in the 2 stable working states it could be in.
Since neither the teachers' nor prison guards' unions are on board with cuts....
If you really think that either one will change, please supply supporting evidence beyond "they need to do it" and "It must be true because I need it to support my conclusion".
I don't expect either union to support cuts in their budgets.
The people get control over this process by booting state legislators of the wrong party when the state runs to excess in one or the other area.
Now in California, with this bonehead 2/3 rule, one party can get a majority (50% +1) for sure, but rarely a supermajority. That's where horsetrading comes in. People have to give things to the other side of the isle to get them to vote for this. And one of the things they can give to the other side of the isle would be votes to stay in office and money to run for re-election. And that's where the magic of special interests come in. They can cause their interested members to vote for these people who only will vote for the budget if they get something out of it. They're now getting votes/campaign contributions, so they get to keep their legislator job longer.
If you got rid of the 2/3rds requirement, when repubs got in office, they'd cut services, when dems got in office, you'd get new ones, and you'd match the rest of the states in the union.
While it turns out voter amendments turn out to often be hijacked by the special interest groups as well, that is not the huge problem. The property tax freeze is not the problem.
The fact that 1/2 the legislature has to give away the farm to get the remaining 1/6 of the legislature to pass a budget is the issue. Get rid of that, and public unions, and every other special interest in California will feel its powers go down greatly.
As well as:
* The initiative ballot propositions system (especially combined with the 2/3rds rule)
* Proposition 13 (1978) in particular which completely broke taxation in California.
It's the bad part, however.
I think whoever and however things are decided, spending with debt ought to be as hard as spending with tax money.
And this practice where you work tons of overtime in your last year and get paid extra for those hours for the rest of your life is simple thievery. Who in their right mind would agree to pay for such a thing?
1995: 19.7%
2000: 18.2%
2005: 20.8%
2008: 22.3%
2010 (est): 24.8%
For example, Google's growth doesn't cause a proportional growth in the demand for govt services. If anything, Google's grown decreases said demand through the economic activity multiplier. (Folks who benefit from that growth spend money, which employs people and so on.)
You can't just use inflation, because if, say, median wages rise faster than inflation, then the cost to the government of the same amount of labor will typically rise faster than inflation as well. (This is one reason Alabama has low spending, because cost of living, land, and prevailing wages in Alabama are low.)
What people expect out of government services also rises roughly with GDP: a spectrum from poor countries, where not having A/C in government offices is fine, as are overburdened slow trains and pot-hole-filled roads, to advanced countries, where people start wanting things like internet-enabled services, high-speed rail, and modern freeways.
> You can't just use inflation, because if, say, median wages rise faster than inflation, then the cost to the government of the same amount of labor will typically rise faster than inflation as well.
You can, however, look at spending on existing programs and new programs separately. On existing programs, you look at why you spent more - was to maintain the same level of service, to pay more, or to expand. With new programs, you can ask similar questions.
While true, that's not a factor over a short period of time. Seriously - do you really think that our expectations of state govt changed by 20% over a couple of years?
CA's govt spending exploded with the economy because it could. We're now in trouble because we don't seem to be able to contract it the same way.
State spending looks great compared to GDP when enormous amounts of money are being borrowed and spent in the state on Internet and housing bubbles.
But why should such a measure be used to decide whether we are getting good value for our money? If anything, the state should be getting leaner with the application of technology that is cutting costs everywhere else.
For example, you might say, "if anything, the financial sector should be getting leaner with the application of technology that is cutting costs everywhere else", but the financial sector has massively grown as a percentage of GDP (much faster than government has).
Over time, the number of sectors in the economy has grown. This can only happen because on average each takes a smaller percentage of the total economy. Yes, they produce more now than when they began. But that is BECAUSE of the application of technology.
The financial sector grew fat with cheap money supplied by the Federal Reserve. Its risks have been passed on to people with have no choice in the matter, the future taxpayer. And government is currently helping to hide the bad news.
Both government and finance have grown fat on other people's money, people have not yet gotten the total bill.
Is it just that Texas is less doomed overall? Or that the economy and government of Texas are more able to benefit from immigrants? Or something else?
Unfortunately it’s both sides of the aisle: one of Senator Feinstein’s more shameful episodes was her support of stupid immigration policy (with back-up from the Clinton white house) in the 1990s, which she thought would help her politically.
While undocumented workers pay more into FICA-funded programs than they take out in services, those are generally federal.
Illegals probably consume higher per-capita services than legal immigrants or citizens, if for no other reason than being lower income. Lower income people consume roughly comparable amounts of some services, and consume higher per capita police, locally-funded health clinic, etc. resources. As well, they're unlikely to pay as much per capita property tax (via rentals). If they have children, their education would cost more (due to ESL programs), although I'm not sure what the rate of having children is among this class.
Even more for children born in the states - many won't ever properly learn Spanish, even when their parents mostly speak it in the home.
On the rest of your points, undocumented workers primarily rely on charity, not on the government. They don't want to run the risk more often that they need to. They're not going to go to any free clinics that accept tax dollars, and they're not going to want to attract the attention of the police.
I tried to find stats on the net costs of illegal immigrants resident in the US, and really couldn't find anything conclusive. The best information seems to be that they could impose slight net costs on some communities, but that it's a relatively minor amount relative to the size of budgets.
I definitely wouldn't say California's problems are mainly due to illegal immigration. I'm just curious why it is so much more of a political issue in some states than others.