Golden State a flop

posted at 2:00 pm on November 2, 2009 by Ed Morrissey
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William Voegeli wrote yesterday about the collapse of California’s political class, and the end of the competition between the Golden State model of expansive benefits and taxes and red-state models of low taxes and spending.  Voegeli concludes that the high-spending model isn’t worth the expense, and that he’s not the only one who has drawn that conclusion.  Migration patterns show that Americans have voted with their feet in this competition between political models, and for good reason:

California and Texas are not perfect representatives of the alternative deals, but they come close. Overall, the Census Bureau’s latest data show that state and local government expenditures for all purposes in 2005-06 were 46.8% higher in California than in Texas: $10,070 per person compared with $6,858. Only three states and the District of Columbia saw higher per capita government outlays than California, while those expenditures in Texas were lower than in all but seven states. California ranked 10th in overall taxes levied by state and local governments, on a per capita basis, while Texas, one of only seven states with no individual income tax, was 38th.

One way to assess how Americans feel about the different tax and benefit packages the states offer is by examining internal U.S. migration patterns. Between April 1, 2000, and June 30, 2007, an average of 3,247 more people moved out of California than into it every week, according to the Census Bureau. Over the same period, Texas had a net weekly population increase of 1,544 as a result of people moving in from other states. During these years, more generally, 16 of the 17 states with the lowest tax levels had positive “net internal migration,” in the Census Bureau’s language, while 14 of the 17 states with the highest taxes had negative net internal migration.

These folks pulling up stakes and driving U-Haul trucks across state lines understand a reality the defenders of the high-benefit/high-tax model must confront: All things being equal, everyone would rather pay low taxes than high ones. The high-benefit/high-tax model can work only if things are demonstrably not equal — if the public goods purchased by the high taxes far surpass the quality, quantity and impact of those available to people who live in states with low taxes.

Today’s public benefits fail that test, as urban scholar Joel Kotkin of NewGeography.com and Chapman University told the Los Angeles Times in March: “Twenty years ago, you could go to Texas, where they had very low taxes, and you would see the difference between there and California. Today, you go to Texas, the roads are no worse, the public schools are not great but are better than or equal to ours, and their universities are good. The bargain between California’s government and the middle class is constantly being renegotiated to the disadvantage of the middle class.”

This only would seem counter-intuitive to people who have not lived in California.  At one time, decades ago, the state had one of the nation’s best education systems, both in compulsory levels and at colleges and universities.  It also had economic dynamism, thanks to a climate that attracted people from all over the country and bountiful natural resources.  Public benefits were nowhere near as extensive as they are now, and they were aimed at the public rather than special interests.

All of that began to change in the 1960s and 1970s.  As the state expanded the reach of these special interests in public affairs, government grew expansively — and expensively.  Proposition 13, which progressives blame for the state of California’s government, grew 31 years ago into a nationwide tax-reform movement because California tried hiking property taxes unrealistically in order to pay for its nanny-state tendencies, even then.  Instead of getting the message — a message diluted by Californians consistently voting for nanny-state political class, it should be pointed out — the state hiked every other fee and tax it could.

This started the migration of Californians to other states, but their new neighbors were not always thrilled to see them arrive.  While decrying the heavy tax burden of their home state, they often agitated for similar nanny-state policies that they left behind, not connecting one with the other intellectually.

The failure of the California model shows that people can usually do for themselves better than a nanny state, mainly because people are motivated to look after their own interests, especially when they can keep their resources to themselves.  Can California realize this and reform itself?  Voegeli  issues an Eisenhower-like warning about the “self-serving governmental-industrial complex,” which will resist the changes as long as possible.  Until Californians experience complete collapse, it’s doubtful that they will take the drastic action of giving the boot to the entire current political class, which is what it will take to rescue the Golden State.

Note: Front-page image is our friend Steven Crowder; it’s just too perfect not to use for this story.

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