In an editorial in today’s Los Angeles Times, Bill Lockyer and Stephen Levy make the case that the state of California isn’t broken.Â I know that’s bound to rile up the John-and-Ken crowd, but the duo make a compelling case.
From the opinion: “During the current fiscal year, general fund revenues are expected to total $89.4 billion. Education spending under Proposition 98 will total $36 billion. That leaves $53.4 billion available to pay debt service on bonds â€” more than eight times the $6.6 billion the state will need.
Our critics say we are addicted to spending. But the numbers show that isn’t true. Thirty years ago, general fund expenditures totaled about $7.43 for every $100 of personal income. In the 2009-10 fiscal year, that ratio was almost $2 less, at $5.52 for every $100 of personal income. In the current fiscal year, per capita general fund expenditures will total $2,246, less than the $2,289 spent 10 years ago and roughly equal to the inflation-adjusted level of 15 years ago.
Moreover, state and local government has grown slimmer relative to California’s population. In 2009, the state had 107 state employees per 10,000 residents, the fourth-lowest proportion in the nation and 25% below the national average. California also has the sixth-lowest combined number of state and local government employees relative to population, 12% below the national average and 16% below Texas.
California’s current budget woes have been caused by the devastation visited on our revenue base by the recession, not a failure to curb spending. In the three fiscal years preceding this one, general fund expenditures fell by $16 billion.
And what about the claim that we have a hostile business climate? Companies build new facilities, and move or close other facilities, all the time. If you compile anecdotes and look only at the folks who leave, it is easy to buy the “business is fleeing” mantra. But the Public Policy Institute of California reports that from 1992 to 2006, business relocations to other states accounted for just 1.7% of California’s job losses. Nationally, an average of about 2% of job loss in states was due to businesses moving out.
From 2000 to 2009, the number of businesses per capita in California held steady, while the number dropped slightly in Texas, Arizona and Nevada.
California’s manufacturing and film sectors supposedly are suffering a job exodus. And it’s true that California has seen huge manufacturing job losses â€” 600,000 jobs, or nearly 33% of the total since 2000, were lost. But the nation overall has not fared any better. And in some traditional manufacturing powerhouses, the job disappearance has been worse. Massachusetts lost 37% of its manufacturing jobs; North Carolina lost 44% and New York 39%. Meanwhile, California’s share of the nation’s film industry jobs grew slightly from 2000 to 2010, from 44% to 45%.”
Bill Lockyer is the state treasurer of California. Stephen Levy is director of the Center for Continuing Study of the California Economy.
So what do you think?Â Is California no longer golden?