Posted on 03/19/2014 6:37:10 AM PDT by amnestynone
The New York Times ran a Timothy Egan editorial on California on March 6. The essay entitled Jerry Brown's Revenge was reverential towards our venerable Governor. It did, however, fall short of declaring Brown a miracle worker, as the Rolling Stone did last August. These and other articles are part of an adoring press's celebratory spasm occasioned by the facts that California has a budget surplus and has had a run of strong job growth.
Egan at least pauses in his panegyrical prose to mention that all is not perfect in California:
Without doubt, California has serious structural problems, well beyond the byzantine hydraulic system that allows the state to flourish. For all the job growth, the unemployment rate is one of the highest in the nation. It has unsustainable pension obligations, a bloated public-employee sector led by the prison guard union. And it is so expensive to live here that clashes over the class divide are threatening to get nasty.
That's not the worst of it. Before going there, though, let's consider Brown's most celebrated achievement, a budget surplus.
California has a budget surplus because of a temporary income tax on its highest earning citizens and because of large capital gains reaped during an amazing year for stocks. The S&P 500 was up almost 30 percent last year, an event unlikely to be repeated. California's tax revenues are excessively dependent on a relatively few wealthy tax payers. This makes revenues extremely volatile. When these tax payers do well, Sacramento is flush with cash. When the high end tax payers don't do well, Sacramento has very serious problems.
By increasing California's reliance on a few wealthy tax payers, Brown's tax increase made California's revenues more volatile. The ongoing bull stock market would have generated higher tax revenues for California without the tax increase. It generated even more with the tax increase. When a bear market comes, the state will again face deficits. This is one reason that Standard and Poors ranks California's credit as second worst in the country, only above Illinois.
So far, to his credit and in stark contrast to what we saw in the dot-com boom under Gray Davis, Jerry Brown has, with the exception of his pet project, the high-speed train, effectively resisted the legislature's knee-jerk impulse to increase long-term spending commitments. What he has not done is perhaps more important: addressing California's other financial issues, the ones that are contributing to California's dismal credit rating.
Great article - thanks for posting.
Tax the rich, what a novel approach. Wonder why they didn’t think of this sooner?
While Brown cultivates the independent maverick image the state
employee unions and enviro regulation whackos continue to pull
his strings. Lefty newspapers and low info voters brought him to
and keep him in power. His successor will get the blame for what
he will bring in the long run.
Considering that the rich in silicon Valley, Hollywood and others are behind this mess I would think it would be hypocrisy to move to another state because of the taxes that they create. On the other hand maybe there are still some non Rino Republican rich that are just now getting ready to leave. But, then again that is what they get for letting the Dem rich run the media.
Good post. Very true.
Notice that the libtard Hollywood moguls shoot their movies
where they get the best $ terms......out of state.
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