George Rebane
[This is the transcript of my regular KVMR commentary which was broadcast on 27 April 2012. I have annotated it with notes and links as appropriate.]
One of the nation’s premier demographers Democrat Joel Kotkin was recently interviewed by the WSJ on his study of ‘The Great California Exodus’, that has been vehemently denied by the state’s progressive pundits and local leftists. Kotkin reviewed the grand history of the golden state and its downward spiral that is now entering its third decade. This demographer has been busy for a number of years studying and publishing on our economic and demographic decline. (for more google ‘joel kotkin, california exodus’)
Among the more recent developments is that the great exodus which started with corporations – no one wants to expand in California – grew to include the well-to-do, and now includes middle class workers who are priced out its real estate markets, and taxed out of their income and ability to save. Kotkin points out that California ranks at or near the bottom on every important comparison of the states ranging from ‘ease of doing business’ through cost of living to individual liberties. Along with states like Illinois and New Jersey, we have become the poster child of how not to govern a state.
Where California used to invite the founding of innovative companies such as those which gave us Silicon Valley, today the main product of California, according to Kotkin, is red tape. He goes on to explain that “part of California's dysfunction … stems from state and local government restrictions on development.”
That “local government” part hits home here in Nevada County. Our county’s population has been stagnant for the last decade. Both businesses and developers have been taking a pass on the county for some years now claiming that it is just too hard to get anything done in these foothills. The leftwing activists, of course, celebrate this as an achievement in their eternal quest for a sustainable stasis. And our local municipal and county governments have long had a bi-partisan effort to support these prohibitions and delays. The cynical part of all this is the expressed denial by our electeds as they give lip service to promote yet another business development workshop or public meeting.
But the latest corroboration of Joel Kotkin’s documented downfall is what our Governor is now setting us up for. The state is broke and has unfunded liabilities that total way north of a half a trillion dollars (that’s trillion like with twelve zeros). The road to our insolvency is paved with public employee pension agreements that are both underfunded and already taking wrenching bites out of local government budgets, putting more cities and counties on the brink of Chapter 9 bankruptcy. This situation is so well known internationally that it is even familiar to the man on the street in Athens, while at the same time being denied by every progressive worth his salt in California.
So what is Moonbeam doing? He promoting a new tax hike – yes, our plan is to tax ourselves back to prosperity – a tax hike that we are told will go to help our underfunded schools. But as newspapers like the Wall Street Journal report, “The dirty little secret is that the new revenues are needed to backfill the insolvent teachers pension fund.”, which means that the tax hike is a fraud. This was made clear to the board of CalSTRS, the California State Teachers Retirement System, a sister pension fund manager to the catastrophically underfunded CalPERS which manages pension funds for other public employees at all levels of government in California.
According to an actuarial report, none of the new tax hike monies will go to education in the sense that we citizens understand and expect. The anticipated $3-5B annually will go to shore up the large deficits in the teachers’ pension funds and health benefits so that the teachers won’t have to increase their contributions from existing salaries to an already lavish retirement program. Today a teacher can retire at age 60 and receive $54,000 a year for life.
The big lie foisted by Democrats in Sacramento is that the tax hike will benefit education and education-related services. In reality it will do none of that, and accomplish only the postponement of “critical pension reforms that might otherwise take place”. And that may be the plan from the party that owes so much to the public service employee unions.
Please consider this exit question – how long will California’s liberal voter majority continue to elect representatives who have nothing to show for their accomplishments over the last decades except a looming bankruptcy and ‘The Great California Exodus’?
My name is Rebane, and I also expand on these and other themes in my Union columns, and on georgerebane.com where this transcript appears. These opinions are not necessarily shared by KVMR. Thank you for listening.
[28apr12 update] Today Russ Steele posted ‘Prop 23 update …' on NC2012, a sister piece to the above, and lit off a lively debate between Mr Steven Frisch, head of the Sierra Business Council and a leading progressive voice in the region. Mr Frisch, whose comments also appear in these pages, is a strong proponent of AB32, California’s gonzo green blast into the gut now ravaging the state’s economy, and promising to soon kick into high gear under the implementation programs and tender mercies of CARB. It’s a lively debate in which Mr Frisch sees nothing but happy dancing in the streets for Californians once AB32 really gets rolling, and seems totally blind to the catastrophe that drives the California exodus. The phalanx of opposition has left him completely unfazed.
However, the fine back-and-forth arguments presented there are somewhat moot and overshadowed by the facts grounded by available data – people and businesses are leaving California, and that’s that. And it isn’t only the rich leaving the state. Kotkin has shown that in the last 20 years, a NET of 4 million middle class Californians have departed for greener pastures as the exodus grows.
rebanesruminations.com 
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