Pushing Back Against Anti-California Lies

By now we’re all familiar with the right-wing story of California: we overspend, risking bankruptcy; we overtax and over-regulate, driving jobs away to places like Texas.

That story is bullshit, lacking any basis in evidence whatsoever. If our political culture prized truth and accuracy it would have been dead and buried a long time ago. Unfortunately, as we all know, our political culture, fueled by a gullible media, is one where lies and myths flourish. And that’s why Treasurer Bill Lockyer and Steven Levy of the Center for Continuing Study of the California Economy published an excellent op-ed in the LA Times earlier this week debunking three anti-California lies: that we’re on the risk of default, that we overspend, and that we drive jobs away with our taxes and our regulations:

Payment of debt service is constitutionally protected, with bond payments required even when the state is operating without a budget. Debt service has second call on general fund dollars, right behind education. Under the California Constitution, making sure bond investors get their money is a higher priority than providing healthcare to kids, protecting the environment and keeping our communities safe.

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 – more than eight times the $6.6 billion the state will need.

Personally I think we should look at changing this – why exactly should bondholders have such a priority over other important uses of our funds? But the rules are the rules, and there is no doubt at all that California faces no chance at all of default. Well, unless there’s a total economic collapse that drives revenues below $6.6 billion. Even if that happened, we’d have bigger problems to worry about.

That $6.6 billion figure should also be a spur to creation of a California state bank. Why should that money be going to Wall Street? Let’s plow it back into our services and our state.

Lockyer and Levy then turned to the “overspending” argument:

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.

The truth is that over the last few decades, especially starting with the 1991-92 budget cuts but even before then, we have seen a steady decline in public services and state spending in California. You’ll often hear Republicans whining about how California shows the flaws of liberal policies, but in fact we have had thoroughly conservative, even right-wing policies on taxes and spending since the passage of Prop 13 in 1978 – and they have totally failed us, bringing our economy and our public services to verge of collapse. Arnold Schwarzenegger was fond of this particular lie, as was Meg Whitman. Thankfully Arnold is almost out of power, and Whitman has been kept far from power.

Finally, they turn to the lies about California losing jobs to other states:

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.

They go on to note that California’s loss of manufacturing jobs tracks those of other states, indicating that the problem is jobs are going overseas, not across state lines. Here again Californians have already rejected this lie, denying Carly Fiorina her bid for the US Senate in anger at her role in sending tens of thousands of California jobs overseas during her time as CEO of HP.

The facts are clear. California isn’t at risk of default. We don’t overspend. We don’t overtax, we don’t over-regulate, and we aren’t losing jobs to other states. If you’ve been reading Calitics for any length of time you’d have known that, since we’ve repeatedly made those points. But it is good that our state Treasurer knows it too, and took to the pages of the LA Times to tell the truth.

Hopefully the next time a Republican or right-winger repeats one of those claims, the media will report it for the outright lie that it is. I’m not holding my breath, though, so we’re going to have to spread that truth ourselves.

52 thoughts on “Pushing Back Against Anti-California Lies”

  1. I couldn’t have put it better than you did–the Republican narrative is bullshit; dangerous bullshit. Just yesterday Senator Harman tweeted this:

    “CA population flat. Census shows movement to GOP controlled states FL and TX. Better business climate=jobs.”

    Textbook non sequitur, and that’s the way a lot of people think. I agree with you that the media won’t report on most of these lies, but disagree with your reasoning. I don’t think the few journalists who cover California politics are gullible so much as terrified of coming across as partisan–they avoid explicitly targeting the Republican narrative and prefer even-handedness, even at the cost of letting facts go unchallenged.

    Either way, it’s not a fight that can be won for us. Thanks for the post.

  2. There are a couple of things I didn’t quite follow.

    For example

    They go on to note that California’s loss of manufacturing jobs tracks those of other states, indicating that the problem is jobs are going overseas, not across state lines. Here again Californians have already rejected this lie, denying Carly Fiorina her bid for the US Senate in anger at her role in sending tens of thousands of California jobs overseas during her time as CEO of HP.

    Certainly it is true that jobs are going overseas.  And Carly Fiorina played a role in sending some of HP’s jobs overseas.  I don’t quite understand what lie Californians rejected by re-electing Barbara Boxer.  Maybe they didn’t like what Carly did, but I don’t understand what lie was rejected with Carly’s defeat.

    In addition, We have the highest income tax rate in the nation.  That is undeniable.  Vermont has a slightly higher rate (9.5%)for those making over $350,000 per year, but our upper income rate of 9.3% begins at $44,815.

    We are #1 in terms of sales tax rate and #10 in terms of corporate tax rate.  Our property tax rate is 45th in the nation, but because our property values are so much higher than most of the rest of the country, the median property tax payments ranks #10 in the nation.  A great deal of corporate property is taxed at a lower assessed valuation because it was purchased prior to 1978.

    Looking at the totality of the taxes, including the highest income tax, highest sales tax and top 10 in everything else, I don’t think that the term “overtaxed” could be called a lie.  

    I have run a business and faces a long list of regulatory restrictions from various state agencies, various city departments and various county departments.  I felt over-regulated.  But if there is someone here who has run a business who feels otherwise, please say so.  Some may think that our regulations are wise and necessary but to call someone who feels over-regulated a liar is a bit strong.

  3. Our ability to call BS is complicated by the right’s depicting our state as the poster boy for liberalism gone wrong, not only statewide but to the entire nation.  Local talk radio nonsense is amplified and reinforced by their parent networks and its not like we should expect non-idiots in other states to rally to our defense.   As the recent Federal tax debate revealed yet again, there is precious little accountability expected from the statements and assumptions made in the national discourse.  Overcoming this AND the CA specific crap is daunting, particularly when state-level concerns are given zero space within the corporate media.  Even though we may be in the majority, I don’t hear our values expressed in any public forum, except in person.

    Our elected representatives remain the strongest potential speakers of the truth, as they’re the only ones that can be heard above the din.  But I’m not holding my breath they’ll suddenly invest the capital necessary to do so.   Maybe Brown will actually do what leaders are supposed to do, despite the mountain of lies.  We need to continually remind our elected representatives that we, unlike many of our neighbors, actually have half a clue.  I wish I had an answer beyond that.  

  4. Conservatives sling a lot of nonsense, but there’s no doubt expanding a business in California is very expensive, very difficult, and very unpredictable thanks to CEQA. Few companies uproot themselves wholesale — they are sunk costs, after all — but the question is where do they expand when they have a choice? It ain’t California.

  5. Bill Lockyer is right that California is not broke or will go bankrupt but he avoided the biggest question – Why is California facing higher unemployment and a bigger budget crisis?  Why are potential homeowners and professionals (non-biotech obviously) leaving California?  The rich will stay no matter what we tax them because they’ll pay for the nice climate (they even live in France which taxes far worse) and the poor will come because California offers the most generous benefits (NY Times reported that with 15% of the US population, CAL has 30% of Welfare recipients). The middle class (potential families that seek owner-occupied housing and are professionals) are leaving. I’ve heard a lot of people wanting to go to Texas, no statistics can change that.

    I venture its a few issues –

    1) Despite the crisis and budget issue California still disproportionately donates more to federal taxes. Texas for all its growth and low taxes contributes far less and was even a recipient more than a donor through most of the decade – Why don’t CAL democrats make a case for that? Is it because it undermines the whole “tax more” philosophy?

    2) California is flat out expensive. I hate to say it, but even if we drop taxes to zero it won’t move businesses in droves here because our wages are very high (on the coast at least) as well as housing. For companies looking for specific skill sets they can be found in other states and its cheaper. GOPers don’t recognize that the housing inflation contributed and Democrats don’t recognize that their push for higher wages in services and other sectors has priced us out of employment competitiveness.

    3) And Taxes. When you have a sunk cost of high wages and housing throwing taxes just don’t help. They make things worse. We do have low wage, low housing areas of the state in the east. Its the fast growing part of the state, and its conservative by the way. But its still not competiting with Texas or Arizona. If we want growth we would allow those areas to compete.  

  6. Yes, the weather is nice in California. The scenery is spectacular. But the reason businesses are here is plain: it’s our university system. One other poster mentioned the educated workforce he needs for his business. That workforce has drawn companies for decades. You’ll see similar effects in other areas where there are multiple universities. The Research Triangle in North Carolina comes to mind. And the Boston area has drawn biotech companies because of Ivy League universities and the research hospitals associated with them.

    I used to work in recruitment and know cost of living has some impact for companies. It means they have to pay more to recruit people so they can afford to live here. I’m sure taxes have some effect too. So do government regulations. That’s why so many companies incorporate in states other than the ones they have their actual headquarters in. And why credit card companies pick certain states to be “from.”

    That said, I think that, by gutting our higher education budgets, we are decimating our main draw for businesses–that educated workforce. It is a big mistake that will cripple our economy for decades to come.

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