Are Things Really “Fine” in California?
PRI’s coverage of California’s poverty problem through various op-eds and a policy brief have drawn considerable attention. Most of it has been positive, but one California writer for the hard-left Mother Jones claimed that despite the point we made, “California is doing just fine, thank you very much.” Rather than deal with the poverty data, he employed various charts to show how golden things are in the state.
We won’t attempt to argue with data that isn’t relevant to our argument that there should not be 8 million Californians living in poverty. But we will take a look at one of the writer’s talking points. It’s the same one that the political left, especially in this state, clings to when trying to justify burdensome taxes: The magnificence of government services.
So without a discussion about the legitimate functions of government, and no debate about what the constraints on the state should be in a nation founded on limited government, let’s take a quick look at the state of “government services” in California.
Costs: Many of California’s public employees, those who perform the government services that are supposedly so much more dynamic and advantageous here than elsewhere, are breaking treasuries from the Mexican border to Oregon. The retirement benefits owed to public employees total nearly $1 trillion. As much as 60 percent of that liability has no funding. The pensions being provided are far too expensive relative to their costs. David Crane of Govern for California told us on PRI’s podcast recently that spending more for pensions crowds out funding for education, colleges and universities, and other critical priorities.
Streets and highways: Even before last year’s $52 billion fuel tax hike, which we’re told will buy better roads in the future, became law, California had the second-highest highest fuel taxes in the nation. What have we received in return for the steep tax? Some of the worst roads in the country, a bloated CalTrans staff, and highway spending that is far out of proportion to the quality of our roads.
Public schools: Once the state’s public education had a glowing reputation. Not so much now. Education Week’s most recent “Quality Counts” report gives the California system a “C-” and ranks it ahead of only nine states. WalletHub ranks it 39th in quality. Lance Izumi, PRI’s senior director of education studies, says that “Californians understand that traditional public schools are failing to improve the achievement of poor kids.”
Higher education: Tuition at the University of California and the California State University systems should be reasonable to the point of being cheap. But, according to Urban Institute research, in-state four-year tuition in California schools is the 22nd highest in the nation. Given that this “service” is supported by California’s high taxes, shouldn’t tuition be much less expensive and shouldn’t the state be ranked closer to 50th?
Poor and homeless: California has the highest poverty rate in the nation, 20.4 percent according to the Census Bureau’s Supplemental Poverty Measure. Yet no state spends more on anti-poverty programs. Only New York spends more per capita on cash assistance and no state has a higher percentage of households receiving cash assistance. Meanwhile, nearly one-third of the chronically homeless in this country live in California, which has about 12 percent of the entire nation’s population.
The Mother Jones writer cited California’s relatively strong economy as evidence that all is well here. The prosperity, and the massive size of the economy though, can in large part be attributed to the state’s natural amenities. The wealthy and productive who can afford to live here and enjoy what for them is a giant playground are willing to pay a premium to do so.
But government policy did not create the beaches, mountains, warm sunny days, lush forests and stunning views that attract people to California. These are “exploitable asymmetries” which, in the words of PRI senior fellow Steven Hayward in Powerline, enable the California’s left-leaning lawmakers “to get away with more idiotic stuff than interior states, because people are willing — up to a point — to pay more and tolerate more bad government to live here.”
California is also buoyed by Hollywood and Silicon Valley. No other state has such a lockdown on two industries that are as historically profitable and influential as these. Their ecosystems are so deeply embedded in California that moving is not an option, leaving them vulnerable to the state’s high taxes, as well as other costs that are comparatively higher in California. Because of these circumstances, lawmakers are free to exploit the industries, charging them rents — in essence payments that exceed the value of what is being purchased — that no other state could.
Mother Jones might think that California is doing just fine, and in some corners it is. But the 8 million living in poverty, and those of us who pay far too much of our incomes for poor services aren’t likely to agree.
Kerry Jackson is a fellow with the Center for California Reform at the Pacific Research Institute.