Does California Have a Future? – Pacific Research Institute

Does California Have a Future?

Republican California State Assemblyman Vince Fong recently tweeted about California’s 19 percent poverty rate, which he said “is driven by the extreme high cost of living here.”

“Yet,” said Fong, “Sacramento continues to pass policies that make it even more expensive.”

In a story illustrated by an artist’s rendering of a family in a moving van fleeing a congested, costly, and hopeless state of affairs, the Mercury News asked if the Bay Area was “pushing people to the breaking point?”

The paper pointed out, “Despite a booming economy, pleasant climate and natural treasures, nearly two-thirds of Bay Area residents say the quality of life here has gotten worse in the last five years, according to a new poll.”

When asked which problems were “extremely serious” or “very serious,” 83 percent in the Silicon Valley Leadership Group poll cited housing costs, 81 percent the cost of living, 79 percent homelessness, and 76 percent traffic.

The Bay Area might be the epicenter of California discontent. But the shock waves spread across the state from there. According to the federal Bureau of Economic Analysis, it takes more money to live in California than it does all but two states, New York and Hawaii. Golden State residents spend $114.40 to buy the same amount of goods and services that $100 would buy elsewhere,  based on the U.S. average.

Put another way,  the relative value of $100 in California is only $87.41, according to the Tax Foundation.

MIT says 10 of the country’s 15 most expensive zip codes are found in California, the most expensive state to live in overall. San Francisco is at the heart of what Fong calls the state’s “affordability crisis.” The Council for Community and Economic Research Cost of Living Index ranks San Francisco as the second-most expensive U.S. city to live in.

When asked which policies will make it “even more expensive” to live in this state, Fong mentioned: the split roll initiative, a 2020 constitutional amendment that removes Proposition 13’s tax protections for commercial and industrial properties that would raise taxes as much as $10.5 billion a year; the proposed $140 million a year water tax; a new $55 million annual tire tax; and a soda tax that might add $2 billion in new taxes, and fall disproportionately hard on the poor.

Also tumbling around in the capitol’s proposal machine is a $900 million a year oil-and-gas severance tax intended to impose a “tax upon any operator for the privilege of severing oil or gas from the earth or water in this state,” and newly-introduced legislation that would place on the 2020 ballot a steep — as much as $1 billion a year — estate tax to fund wealth inequality programs.

“Sacramento wants Californians to pay more and get less,” Fong says. “That would never work in other situations” outside of government. He believes California’s path is unsustainable. Unless there’s change, the middle class “is going to disappear,” the poor will endure “worse poverty,” and upward mobility will continue to be inhibited.

One wonders, as well, about the extended effects of the commercial exodus that’s been draining the state for some time.

How long can government’s hostility toward business, and everyday Californians, continue before there’s a painful reckoning? Silicon Valley and Hollywood drive California, but there’s much more to this state.

We’re farmers, oil field roughnecks, store clerks, loggers, plant employees, gig workers, middle managers, young professionals, and entrepreneurs struggling against the tide of taxation and regulation. Until lawmakers remember there’s life outside the Los Angeles, Bay Area, and Sacramento bubbles, this state’s future is in question.

Nothing contained in this blog is to be construed as necessarily reflecting the views of the Pacific Research Institute or as an attempt to thwart or aid the passage of any legislation.

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