Unveiling the Light

Another year, another budget crisis and all is normal in the late great state of California. Our great leaders pontificate and position themselves, make speeches and take their junkets. They do everything, except the job they are paid to do! They are highly paid, highly pandered to, highly spoiled with perks and pleasures and think highly of their status but are among the most ineffectual politicians in the country. They actually should rank right up there with third world despots who launch their own uprising against the evil regime ahead of them, only so they too can take advantage of the people; we who seem only too happy to allow some other crook to take their turn at raiding the people's treasury.

Our state used to be first among states in this great nation. Now itis quickly becoming a hollow shell that cannot take care of itself. The citizens are voting with their feet. They are leaving! If you happen to be out of the state and want to get back to California, U Haul will gladly give you a great deal. They have all kinds of equipment leaving the state but very little coming into it. People are moving out of California and few are moving into it. If it wasn’t for immigration from foreign lands and their need to stay near family and previously established ethnic communities, the state would be shrinking. Unfortunately, most of those leaving are the high income earners, the business people, the millionaires and the retired wealthy who refuse to stay in a state which offers them little other than confiscatory tax rates, high fees, low services and ineffective government. Consider the following.

• The state of California has the highest Workers Compensation costs in the nation. Employers pay the higher premiums for these Workers Compensation costs.

• Only Michigan and Mississippi have a higher unemployment rate than California and 39 states have substantially lower rates. Employers’ unemployment insurance rates are directly affected by the rate of usage of unemployment insurance.

• California has the highest marginal tax rate for personal income on the state level, maxing out at a whopping 10.3 percent. People do consider this when they have wealth and decide where to live.

• California has the highest state sales tax at 7.25 percent and among the most inclusive of all sales taxes. This adds over $2,100 to the cost of a $30,000 car before licensing fees! New Jersey is second at 7 percent. Again, if given a choice, why not live where less of the money you spend is grabbed by the state.

• California has the highest gas prices in the continental United States due to overbearing state regulations and poor decision making by government officials, including their mandating additives that actually poisoned our public water ways, then reversing course with the costs of the refining changes being passed on to the California consumer.

• California ranks 23rd in spending on public schools but this is severely under reported as it does not include school construction costs and interest on bonds which voters regularly vote in throughout the state. Bond costs are typically added onto the cost of real estate.

• Only 66 percent of California students graduate, ranking us 29th in the nation. This affects both employers looking for a skilled work force and families worried about the environment in which they raise their family.

• We are the 10th most dangerous state in the nation to live.

This is why our neighbors in Nevada and Arizona are booming. Most of their population growth is Californians fleeing a state that has largely been without effective leadership for over twenty years. Now we find ourselves in yet another budget crisis and the first words out of the mouths of our so called leaders are “revenue enhancements” which is a polite way of saying ‘raise their taxes and increase their fees.’ It is akin to the Queen being told, “The people have no bread,” and responding, “Well then, let them eat cake.” They simply have no idea of the problem and no desire to face up to that problem.

We are already the most taxed state in the nation. Many of those taxes are hidden in fees and higher costs. When gas costs 50 cents more in California because of burdensome regulations; that is a tax on consumers. When houses costs $50,000 to $100,000 more because of government fees and regulations, that is a tax on consumers. When cars costs $1,500 more because of stricter emissions standards, that too is a tax on consumers. When you include the extra costs we incur because of government regulation, our tax rates become absolutely burdensome and confiscatory. Add the extra costs of liability insurance because we seem to all be suing each other hoping to win a chance at the “good life” that perhaps we now feel is out of our reach and the problem become worse than ever.

The City of Vallejo is a prime example of what is to come. We are becoming a nation of those with very good jobs with large firms, those who work for the government and then the lower class who fall below the radar and live in a sort of sub-culture. Those with the very good jobs or who work for government and thus can negotiate increasingly lucrative contracts do well. Those others soon realize that to have a chance to make good, they must leave the state. When the holders of good jobs have made their wealth, often including those that made it in government jobs by holding the tax payer as hostage to the services they offer, they often end up retiring out of state so as to hang on to the wealth they have acquired. (Many police and firemen regular make over $100,000 per year when the average income in California is $43,000.)

In Vallejo this outflow of productive people and wealth resulted in declining revenue until they could no longer afford the lucrative government union contracts. The result is the first major city to file bankruptcy so as to avoid unreasonable retirement payments. Nobody wins, not the worker, not the tax payer and certainly not the people depending on their retirement which no longer is what they expected. The immorality is the lack of real action by government leaders. They still don’t have a budget and the ideas they have spoken are nothing more than patches to help us limp through another year. It also lies in the, ‘Get what I can now and worry bout consequence later,’ often taken in labor negotiation, especially when negotiating with politicians more worried about the labor vote than the entity’s financial stability.

The real problem is that the tax base is eroding and that it cannot support the level of payment burden being thrust upon it. When times are good the state can tax the income of corporations and the rich to provide income but any slowdown means that this slim tax base has a sharp reduction in income and the state has an even sharper reduction in tax income. Too many Californians are in the subculture, not paying taxes because they don’t really have a piece of the pie being negotiated by the elite and the elite can’t support the benefits they elect for themselves. This cycle will not end until the fundamentals change and there seems to be no hint of real change coming out of Sacramento.

What will happen when the tax base becomes so slim and the numbers with their hands out becomes so large that the system will no longer work? Will we become the next Mississippi? When I studied Economics there was one steadfast rule. The state with the worst of anything economically was Mississippi. Perhaps California will fill that role in the future. Who has the worst unemployment rate? Why California, of course. Who has the highest poverty rate (Even while having among the highest per capita income … a sign of the inequity of the system.)? Why California, of course! Who has the highest welfare numbers? Why California of Course. Who has the most corrupt and inefficient government? We don’t have to wait for the future to answer that one! It’s California, of course!

Our governor, legislators, large city mayors and council members think that they can solve global warming, provide sanctuary for illegal immigrants, bring peace to the world and solve the world’s energy crisis but the one thing they can’t do is their job! They can’t get electricity to their citizens, build dams to provide water to our homes, provide services at reasonable rates, they can’t build roads that work without congestion, provide access roads to the forests or cut away dangerous undergrowth. They can’t provide much needed evacuation routes to save lives; they can’t give us schools that work or even a budget that makes sense or is anywhere near on time. Yet they think that only they can save the world! They just have no idea as to how it works or what their job entails. The sad part is that we keep on sending them back to that job. What kind of fool does that make us or are we part of this unholy alliance?