San Francisco— California government can do more with fewer taxpayer dollars, according to a new study released today by the Pacific Research Institute (PRI), a free-market think tank based in San Francisco. No Bang for the Taxpayer’s Buck: Why California Must Reform Spending and Trim Government finds that California is a bottom performer in delivering value-for-money in government services like education, health care, and infrastructure. The study was authored by Jason Clemens, director of research at PRI, Niels Veldhuis, vice president of research and the director of fiscal studies at the Canada-based Fraser Institute, and Julie Kaszton, a PRI policy fellow.
“As of 2008 California had the 10th-largest state and local government sector in the country,” said Mr. Clemens. “If Californians had the 10th best educational achievement, 10th best transportation system, and the 10th best social safety program, then the size and scope of government might be justified, but this isn’t the case. With the current level of government spending, California’s government is only delivering 72 percent of what it could be if it were providing services as efficiently as other countries.”
To evaluate California’s value-for-money, No Bang for Taxpayer’s Buck compares California spending to all other states, and government performance and efficiency to 23 industrialized countries. The study found:
- In 2008, California ranked 41st among the 50 states with state and local government spending 22.3 percent of state GDP (GSP).
- California ranked 22nd among 24 industrialized countries on overall government performance—referring to the ability of government to achieve outcomes in areas like education and health care.
- California was 12-percentage points below average in government performance.
- California ranked 15th among 24 industrialized countries on government efficiency, which combines performance (previous measure) with the money spent.
A Roadmap to Recover 2011
Accompanying the release of No Bang for Taxpayer’s Buck, PRI provided a “Roadmap to Recovery 2011: Ten Steps to Return California to Prosperity,” with concrete recommendations for getting more value for taxpayers’ dollars and restoring California’s economic prosperity. A summary of the ten steps is provided below.
Ten Steps to Return California to Prosperity
- Reduce the size and scope of government.
- Balance the budget and begin reducing taxes.
- Reform taxes to encourage work effort, savings, investment, and entrepreneurship.
- Adopt meaningful spending limits to avoid repeating the current crisis in the future.
- Reform California’s public pension system.
- Repeal AB 32, California’s carbon emissions legislation.
- Enact regulatory budgets, disclosure laws, and mandatory sunset provisions.
- Reform Medi-Cal through successful patient-focused changes used in other states.
- Reform K-12 school financing by attaching funding to students.
- Reform California’s tort liability system by abolishing punitive awards, capping all awards for non-economic damages, and adopting “loser pays“ rules.
“California’s government has grown too large and inefficient, but the solution is not just to reduce government spending,” concluded Mr. Clemens. “Other states and countries are able to deliver comparable services and programs at lower costs or more effective programs at similar costs. Those programs and services that survive in California need to be reformed in a way to better ensure value for money for citizens and taxpayers alike.”
ABOUT CALIFORNIA PROSPERITY
No Bang for the Taxpayer’s Buck and “A Roadmap to Recovery 2011” are the third and fourth installments of the California Prosperity project launched by the Pacific Research Institute in 2009. The project is designed to educate Californians about their state’s economic performance and the government policies affecting it. The previous installments, Assessing the State of the Golden State and Taxifornia, are available at www.pacificresearch.org.
For 31 years, the Pacific Research Institute (PRI) has championed freedom, opportunity, and individual responsibility through free-market policy solutions. PRI is a non-profit, non-partisan organization. For more information, please visit our web site at www.pacificresearch.org