California sings the Blue State Blues
by Jeff O'Bryant
Dec 06, 2010 | 3005 views | 0 0 comments | 18 18 recommendations | email to a friend | print
Jeff O Bryant
Jeff O'Bryant
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The Washington Post recently ran a piece entitled “California’s ailing Republicans: A dying breed?” It notes that despite the national humiliation of Democrats in the recent mid-term elections, Republicans nevertheless failed to make any statewide or national headway in California. The piece continues by noting there are less Republicans now than in 1988 despite the state’s population increase of about 10 million. Further, Republicans can count only one victory out of 21 contests since 2002. And over 20 years have passed since a Republican presidential candidate carried California. Democrats have essentially run the state since the early 1990s. How has that worked out for Californians?

By virtually any measure, not very well. First, though, let’s get one thing straight. Much the way frozen food manufacturers call their processed sludge nuggets “chicken,” Schwarzenegger calls himself a “Republican.” His election was an aberration, more, without question, thanks to his fame than his party affiliation.

So what’s it like in California? According to Chief Executive Magazine, in surveying over 600 CEOs on such criteria as taxes, business regulations and workforce quality, California ranked as the worst state for business in 2010. One might think Sacramento isn’t aware of this as its rank has remained in last place ever since Chief Executive started the annual survey in 2005. It seems, rather, that they just don’t care. That is the sense one gets from the comments of the CEOs in response to the survey: California is actually hostile to business.

But its troubles go deeper than that. From its willingness to boycott Arizona (even when it is not economically prudent to do so) to its $15 billion budget deficit (a deficit expected to nearly triple) the Golden State isn’t golden anymore — it’s in trouble and needs cash. So why isn’t the state pursuing its past solution to such shortfalls by simply borrowing the money and going even deeper into debt? It could be that, according to Standard & Poor’s recent credit ratings, countries like South Korea, Kuwait, and Chile all have stronger credit scores (i.e., the ability to pay back debts both in full and on time) than California.

One would think California would be rolling in the dough. Per the U.S. Census Bureau, California collects more money in taxes than any other state. Almost double the taxes, in fact, of the next highest ranked state (New York). Granted, California (at just under 37 million) has nearly double the population of New York (19 million), but that really isn’t a good indicator. Texas, on the other hand, is. The Lone Star State’s population, the second highest behind California, is almost 25 million and its tax rates are much lower. Per the Tax Foundation, California ranks third highest for its tax on gas (35.3 cents) whereas the Texas tax is only 20 cents. California’s sales tax is among the highest in the nation at 7.25 percent compared to Texas’ 6.25 percent. Granted, that’s just a single percent difference. But there is a reason for that. Whereas California ranks third highest for individual income tax rates (it has seven tax brackets in all which are among the most highly progressive) Texas has no state income tax at all.

Perhaps these are among the reasons why Chief Executive found Texas to be the very best place to run a business and California the very worst.

Indeed, by virtually every business measure conceivable Texas is better than California. Texas has a lower unemployment rate (8.1 to California’s 12.4), it exports more than any other state in the union (a record previously held by California), and it has a lower home foreclosure rate (California is fourth highest in the nation compared to Texas’s ranking of 29th). Texas also imposes fewer regulations on its businesses than does California. Apparently, being friendly to business rather than hostile to it has its advantages.

But this isn’t just Chief Executive Magazine’s opinion. Even the liberal online magazine Slate ran a piece entitled “Why Texas is doing so much better economically than the rest of the nation” earlier this year. Of course, it neglected to mention that since 1995, the state has been led by Republican governors, since 2003 Republicans have controlled the Texas House of Representatives, and since 1997 they have controlled the Texas Senate. Indeed, Republicans also control all statewide Texas offices and have a majority in the Texas congressional delegation, making The Lone Star state one of most Republican states in the whole country. Can it be just a coincidence that the most economically healthy state in the Union is also one of the most Republican?

Republicans are marginalized in California so perhaps it’s also just a coincidence that one of the most economically troubled states in the Union is also one of the most liberal. California ranked 31st out of the states for standard of living (according to a February 2010 Gallup poll), and even worse for cost of living (almost the worst at 49th place according to ACCRA). According to Forbes, only three other states are deeper in debt than California. The Golden State is also one of the worst in the Union for how heavily it regulates its businesses.

Such hostility to business doesn’t make sense. The fact remains that free market capitalism is the only engine that can generate the vast sums of money necessary to allow “sanctuary cities” to aid illegal aliens and to pay (according to Business Insider) 5,355 California State employees a salary greater than $200,000 per year. Rick Perry, who by the way holds the top job in the Texas government, earns by contrast a salary of $115,345 a year as governor.

Republicans are obviously not saints. Nor do they have all the answers. But based on the evidence it seems they have some of them. And while California isn’t a scene out of Dante’s Inferno or a charred landscape of desolation and hopelessness or like some third world country, it clearly does have major problems that negatively impacts numerous aspects of its citizens’ lives. Were I a registered voter in California, I would keep that in mind come the next election.

Jeff O’Bryant is the author of “Up into the Hills – A Brief History of Catoosa County” and holds two degrees: a bachelor’s in education and a bachelor’s with honors in history. He can be contacted at jeffobryant@catt.com.
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