Troubling Numbers for California’s Future
04/28/2012 7 Comments
There are growing signs that California, the once Golden State, is in serious trouble. Tax revenues are in decline and the educated middle class is fleeing the state for more job friendly locals. The Governor’s solution is to double down on green energy projects which are raising energy prices, which will push more manufacturing and other blue-collar energy users out of the state. Here are some of the scary numbers culled from my morning reading:
- Franchise Tax Board collections are a couple of billion short.
- Employment Development Department is $250 million short.
- Personal Income tax is over $2 billion short.
- Corporation taxes are $150 million short or 10% below predictions.=
Joel Kotkin writing in the Daily Beast
- California energy costs are 50 percent above the national average, and expected to rise
- Middle-skilled jobs (those that require two years or more of post-secondary education) increased by a mere 2 percent compared to a 5.3 percent increase nationwide, and almost 15 percent in Texas over last ten years.
- In the science-technology-engineering and mathematics field the state has lost its edge, growing just 1.7 percent over the past 10 years compared to 5.4 percent nationally and 14 percent in Texas.
- The middle class is proportionately smaller and has shrunk more than elsewhere. Adjusted for cost of living, it stands at 47.9 percent in California compared to nearly 55 percent for the rest of the country.
- Nearly two-in-five Californians pay no income tax, and one in four receive Medicaid.
The Governor solution to these growing problems is to increase income and sales taxes, increase energy costs at the pump by mandating low carbon fuels, mandate more unreliable high cost renewable energy for the manufacturing sector, and implement cap and trade to raise the cost doing business in the state.
It is clear that California economy is not going anywhere but down, and the fall will be accelerating with the next round of housing foreclosures already in the pipeline.
How do we get out of this economic death spiral?