More California Dreaming

by Victor Davis Hanson

NRO’s The Corner

One of the strangest things about the current California meltdown is how no one in state government here ever pauses to ask simple questions like: Why do we have the largest annual deficit with one of the highest sales tax and income tax rates in the country? 

Anyone who charted the annual state budget increases over the last 10 years and adjusted for population and inflation rises would conclude that the state has decided to take over all sorts of previously private responsibilities and to ensure state employees and various dependents a level of compensation that is not sustainable.

It is not as if California decided about 10 years ago to invest to ensure we had state of the art freeways, university campuses, ports, airports, dams, canals, and power infrastructure. Instead, it was too often redistribution rather than investment. It is not like we can get out of the mess by simply stopping all construction when a vast public work force with pension and salary claims, along with entitlements and welfare, take the lion’s share of the budget.

Meanwhile, tens of thousands whom we used to count on to pay our nearly 10% state income rates continue to flee the state. All the past sleight-of-hand borrowing, reliance on inflated real estate, lotteries, bonds, etc. have already been tried. Now we hit the wall of reality, whose iron-clad law — when you have no money, you really have no money — cannot be so easily demagogued away.

California — by negative example

I think the wretched state of California, now looking at a fiscal disaster of roughly a $20-30 billion annual shortfall, should be a wake-up call for the Obama administration. Whatever California is doing — please don’t follow suit!

With proposed increases, we will have the highest sales taxes (ca. 9%) in the nation, the highest state income taxes (10+%), and probably the lowest thresholds to get into those top brackets — and yet only about 380,000 Californians pay 40% of the aggregate income tax revenue.

In exchange, our schools, roads, airports, hospitals, and police are, to use a euphemism, not competitive. The CSU campuses make up the largest university system in the world, with the largest unionized faculty, and yet nearly 50% of entering freshman must take mandatory remedial math and English courses. We don’t utilize our ample energy, mineral, and timber resources, but instead depend on other states that do. Such an odd mix — we have sermons on our own greenness, but stealthy dependence on other less liberal producers to satisfy our insatiable appetites. (Thank god for moose-hunting Sarah Palin’s Alaska and an assortment of Middle East authoritarians).

We have an enormously expensive, but incompetent government at all levels. It has a horrendously expensive bicameral Legislature, hundreds of boards and bureaus that serve as $100,000+ sinecures for political insiders and term-limited ex-politicians. Those with advanced degrees fly to our low- or no-income tax neighboring states, coupled with an influx of tens of thousands without high school diplomas. We have a political discourse that is polarized, self-censored, and completely framed by race, class, and gender agendas — reflecting the curricula of our high-schools, colleges, and universities. The electorate is as volatile as it is unhinged. One day it will vote billions of dollars in new bonds for massive new projects, the next it will vote to fund massive prison complexes for “3-strikes and you’re out” prisoners, and on yet another it will vote to pass liberal feel-good nostrums that nullify what came before.

In short, the state is the left-wing version of Lehman Brothers.

©2008 Victor Davis Hanson

Share This