Adios, California - A fifth-generation Californian laments his state’s ongoing economic collapse.

By Steve Baldwin

(American Spectator)  -  It’s not easy watching California self-destruct. After all, my four sons are 6th generation Californians. One relative of ours journeyed here prior to the Gold Rush when the state population was just a handful of people. Family lore has it he was a gunslinger who, victorious in a gun duel, headed to California to avoid the law. He ended up ranching on what is now known as Mammoth Mountain. Other family members took part in the gold rush and one ended up discovering gold in 1895 in the Mojave Desert. My grandparents arrived in Kern County in the 1930s and worked as teachers educating the children of oil workers shortly after the discovery of oil in that region.

Proud of my heritage, I had this urge to run for the state legislature, so I did and I won. I was hoping I could do something in Sacramento to slow the decline of the Golden State. But it was not to be. I quickly discovered that the legislature was so dominated by far left ideologues, there was nothing that could be done to reverse course. My Democrat colleagues were not concerned one bit about how their policies were destroying the economic golden goose that made California so famous worldwide. Indeed, they actually believe their big government and nanny state policies have made California the model of how progressives can succeed in governing. Seriously.

The entire time I served in Sacramento, the Democrats were focused almost exclusively on legislation which either had to do with wealth redistribution or creating new “rights” for alleged victims such as illegal aliens, criminals, union members, homosexuals, transgenders and other “oppressed” groups. And it’s no different today. The reality is that the average middle class Californian hasn’t had representation in the halls of Sacramento for decades. Indeed, I predict the destruction of California will, unfortunately, be one of the great legacies of the progressive movement.

Indeed, the Democrats hold supermajorities in both legislative chambers. The Assembly has been in Democratic hands since the 1970 election, except for 1995-1996. The Senate has been controlled by the Democrats continuously since 1970. As for the Governor, well, the last semi-real Republican Governor was Pete Wilson, who ended his term in 1999. However, action superstar and former champion body builder Arnold Schwarzenegger, a Republican, did serve as Governor from 2003-2011 but essentially governed as a Democrat, even to the point of hiring leftists to be his key staff. So much for his tough guy image. Progressive hero Jerry Brown has served as Governor since 2011.

Sure, the liberals like to claim California socialism is working by pointing to the much heralded statistic that “California’s economy is the 6th largest in the world” as calculated by the state’s Department of Finance. Indeed, California’s $2.62 trillion economy is larger than that of France, Canada, Brazil, Russia, and Italy. However, that GDP stat does not factor in California’s cost of living, which is 36.2% higher than the national cost of living. As Carson Bruno writes in Real Clear Markets, “using the cost of living adjusted data from the International Monetary Fund and adjusting California’s GDP data provides a better snapshot of California’s economic standing in the world. Doing so shows that California is actually the 12th largest economy — a drop of 6 spots — and actually puts the state below Mexico.”

Moreover, as Bruno points out, Silicon Valley “accounted for 50% of California’s private industry real GDP growth.” In other words, without a few dozen mega profitable high-tech Silicon Valley firms such as Apple, Google, and Facebook, California’s GDP would be significantly smaller.

However, as economic blogger Richard Rider points out, the aggregate GDP statistic is really not a good indicator of a state’s economic health, especially since one industry appears to be propping up the “6thlargest economy” myth. California has over 39 million people, more than any other state, so a far more accurate assessment of its economy, Rider writes, would be per capita GDP as compared to the rest of the country. After adjusting the GDP figures to account for the cost of living (COL), the Golden State ends up with a paltry 37th place ranking within the U.S.A., with a $45,696 per capital GDP. Even rustbelt states, such as Michigan and Ohio, have a higher adjusted per capita GDP. Despite Silicon Valley’s high-tech giants, California barely squeezes past impoverished New Mexico. Rider also reports that when one looks at per capita GDP stats for the rest of the world, California ranks 19th, but those stats don’t factor in the COL data; if they did, California would be even further down the rankings internationally.

"Arnold Schwarzenegger, a Republican, did serve as Governor from 2003-2011 but essentially governed as a Democrat, even to the point of hiring leftists to be his key staff."

One should not also assume that high-tech companies are a permanent feature of California’s economy. Already, the extremely high cost of living in Silicon Valley has, since 2016, caused more Silicon Valley employees to leave the state than it has attracted. With a few high-tech companies having left California for other states such as Virginia, Texas and North Carolina, it’s only a matter of time before this turns into a flood.

But it’s not just Silicon Valley employees fleeing California; it’s productive — and job-creating — citizens from all over the state. As Joel Kotkin and Wendell Cox wrote in the Mercury News last April, “the largest group of outmigrants tends to be middle-aged people making between $100,000 and $200,000 annually.”

Indeed, California has done everything possible to make it difficult for businesses and employers to produce goods and services. California now has the highest state income tax rate and the highest state sales tax rate in the country. Our gas tax rate is fourth-highest, but if you add in the 10-12 cent “cap and trade” cost per gallon, we have the highest gas tax in the country. Based on 2014 numbers, California’s single-family residence property tax is the eighth highest in the country with the median homeowner property tax bill 93% higher than the average property tax bill for the other 49 states. As for the state’s corporate income tax rate, it is also eighth in the country. And let’s not forget our small business tax, a minimum of $800, even if no profit is earned.

Overall, the Tax Foundation ranks California as fifth worse in overall tax burden, but the state is especially hostile to its high earners who start businesses and create most of the jobs. Indeed, the top 1% pays 50% of all state income taxes. Moreover, the Small Business and Entrepreneurship Council ranked California as having the worst anti-business climate in the country; the American Tort Reform Foundation ranks the state as the “worst state judicial hellhole” in the U.S. and the national Chamber of Commerce rates California as having the fourth-worst business climate.

If California is such a prosperous state as liberals claim, why does it have the highest poverty rate in the nation? According to the Census Bureau, the poverty rate is 23.4%, which is 17% higher than second place Nevada. Indeed, while California has 12% of the nation’s population, it is home to 33% of the nation’s TANF (Temporary Assistance for Needy Families) welfare recipients, more than the next seven states combined.

What’s clear is that the producers are leaving the state and the takers are coming in. Many of the takers are illegal aliens, now estimated to number over 2.6 million. The Federation for American Immigration Reform estimates that California spends $22 billion on government services for illegal aliens, including welfare, education, Medicaid, and criminal justice system costs. Liberals claim they more than make that up with taxes paid, but that’s simply not true. It’s not even close. FAIR estimates illegal aliens in California contribute only $1.21 billion in tax revenue, which means they cost California $20.6 billion, or at least $1,800 per household.

Nonetheless, open border advocates, such as Facebook Chairman Mark Zuckerberg, claim illegal aliens are a net benefit to California with little evidence to support such an assertion. As the Center for Immigration Studies has documented, the vast majority of illegals are poor, uneducated, and with few skills. How does accepting millions of illegal aliens and then granting them access to dozens of welfare programs benefit California’s economy? If illegal aliens were contributing to the economy in any meaningful way, California, with its 2.6 million illegal aliens, would be booming.

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