LA Times: Myths and Facts about California Taxes, Spending and Government

LA Times columnist George Skleton lays it all out for us with his column in Monday’s newspaper.  There’s a perception of runnaway government, massive overspending and sky-high taxes and then, there’s reality.  Things are about the same as they were when Ronald Reagan was government.  Things are different, certainly, but in dollars and cents (not sense), they are about the same.

From Skelton’s column:

Myth No. 1: There’s no such thing as a temporary tax increase. They all become permanent.

Fact: That’s just talk-show spiel. Temporary state taxes almost never become permanent.

There’s only one exception that I can recall. A temporary half-cent sales tax turned into essentially a permanent local tax in 1993 with the voters’ approval. All the revenue was dedicated to local law enforcement and fire protection.

Myth No. 2: Taxes have gone through the roof in California.

Fact: They’ve been held down. Even if Brown’s tax hikes are approved by voters, the state tax burden will be basically what it was back when Ronald Reagan was governor in the 1970s.

In Reagan’s last year in Sacramento, state taxes amounted to $6.89 per $100 of personal income. Currently, the level is $6.45. With the hikes, it would be $6.67, according to the State Department of Finance, which charts such data. The high tax point was $7.96 in 1999.

Also, according to the finance department, California ranks 19th nationally in state and local taxes and fees, at $16.42 per $100 of personal income. The highest-taxing states relative to income are Alaska, Wyoming and New York.

Myth No. 3: California’s spending has been out of control.

Fact: It’s on a relatively tight rein. The deficit-ridden state General Fund has been cut by 16% in the last four years, the overall state budget by 2%.

One example: Welfare, the poster child of waste for many on the right, has been slashed to the grant levels of 25 years ago: $638 monthly for a family of three.

But let’s go back to that conservative icon Reagan. General Fund spending per $100 of income is lower today, $5.14, than it was in his final year, $5.89.

Historically, what really bumped up state spending was Proposition 13 in 1978. That property tax cut prompted the state to begin doling out money to revenue-robbed local governments and schools.

Myth No. 4: California suffers from an exceptionally bloated bureaucracy.

Fact: That’s baloney. Again, the Reagan era puts it in perspective. State government employs roughly the same number of workers per 1,000 population today as then, nine.

Moreover, we have the fifth-lowest number of state employees relative to population in the nation, according to Steve Levy, executive director of the Center for the Continuing Study of the California Economy. We’re 23% below the national average.

Make that also the fifth-lowest nationally when state and local government employees are combined.

Texas’ bureaucracy is bigger relatively, both state and local.

“We’re understaffed compared to the national average,” Levy says. “We’re providing services with far fewer employees. It’s pretty dramatic.”

Myth No. 5: California teachers are pampered and overpaid.

Fact: My wife is a retired teacher, so I’m biased. But it’s blarney.

Yes, the average salary for California teachers, $69,400, is the second-highest in the nation, behind New York’s. But California’s cost of living also is very high; resale housing prices here are 75% steeper than the national average.

Moreover, California teachers may have to work harder. We have the nation’s fourth-lowest ratio of K-12 educators to population, Levy says. California is 20% below the national average; Texas is 25% above. Meanwhile, our proportion of students to population is above average.

California also ranks 46th in K-12 spending per pupil and 47th as a percentage of income.

Funding for elementary schools through community colleges has been chopped by $9 billion in the last four years, from $56.6 billion to $47.6 billion. Brown says he’ll need to whack $4.8 billion more if his taxes aren’t approved.

 

Skelton readily admits, there is waste in government and there is bureaucracy.  But that existing during the administration of Republican governors too.  When you consider the pending tax windfall that will hit California when the Facebook IPO hits the market, the state’s coffers are bound to improve further.

Governor Brown has made some remarkable progress in righting the state’s financial ship.  It’s high time our conservative friends give him credit for doing what our previous governor could not.

 

  3 comments for “LA Times: Myths and Facts about California Taxes, Spending and Government

  1. Rampant Corruption
    January 17, 2012 at 9:38 am

    Interesting article on taxes, spending, and government bloat.

    The bottom line is that most conservative people are unrealistic because they want to have the services available to them but do not want to pay for them. This plays into the hands of the conservative leaders who want government employment to go the way of private employment. If the conservative leaders can convince the public that public employee unions are a corrupt drain on the economy, the public will bust the unions. Once the unions are busted, government will have even fewer resources to regulate the corporations. Do away with regulation and the corporations can get away with just about anything.

    I am not in a union, but I see the real value they bring to workers and to the economy in general. If anything, we need to increase spending on worthwhile programs in California like infrastructure and education so this state is returned to the status of having the best roads, schools, and commerce in the country.

  2. cook
    January 17, 2012 at 3:01 pm

    What is not said is:

    Even tho relative spending is about the same now as it was in the 60’s.

    It the 60’s the freeway were built and the water projects were built, and dams, roads airports, all kinds of infractures.

    Now we spend the same per capita and only get low level retired civil servants making hundreds of thousand of dollars to do nothing of any value.

    • threebeers
      January 19, 2012 at 11:01 pm

      Today, new freeways are in fact built. Then, all the freeways that already exist are maintained, which when you think about it is really quite amazing considering how overused and utilized they are. Other infrastructure is also replaced and fixed so frequently and expertly that the rest of us can go on living our lives completely ignorant to the fact that all of this is happening while we are watching the 1 billionth season of American Idol.

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