California by the numbers

posted at 4:04 pm on April 30, 2012 by J.E. Dyer

The weekend produced a spate of dang-this-is-bad articles on the economic situation in California.  Steven Greenhut’s for the Orange County Register is entitled “California to middle class: drop dead.”  At The Daily Beast, Joel Kotkin laments that “As California Collapses, Obama Follows its Lead.”  (H/t – and a “Read it, people!” shout-out – to Ed Driscoll at PJM.)

But what does all this look like in terms of numbers?  What’s the how much and where and whom of the Golden State collapse?  Perhaps the most interesting and telling thing is that it really is as bad as it looks.  And the reasons are pretty much what you’d expect.  Here’s the California story, in numbers.

According to a March 2012 report, 855,000 is how many private-sector jobs California has lost since the recession started four years ago. (H/t: California Political News & Views.)  The state today enjoys an unemployment rate of 11%, compared with the official national average of 8.3%

Texas, by contrast, has added 139,800 jobs, posting the biggest absolute gain among the 50 states.  (California’s is the biggest absolute loss.)  Texas’ unemployment rate is 7.1%.  Number 3 on the job-growth list? The District of Columbia, with 21,000 added private-sector jobs.  Government is big business.

But we were talking about California.  How does California rank in terms of the average state and local tax burden? According to the Tax Foundation, in 2009, California had the 6th heaviest tax burden in the nation, at 10.6%.   (New Jersey was #1, followed by New York at #2.)  That’s the in-state tax burden, of course.  Federal taxes are on top of that.

Of course, business climate comprises more than the average individual tax burden.  The Tax Foundation looks at five forms of taxation – corporate tax, individual income tax, sales tax, property tax, and unemployment insurance tax – to index the business climates of the 50 states.  By this combined measure, the Tax Foundation ranks California 48th in business climate.  (New York is 49th, and New Jersey 50th.)

State regulatory environment? George Mason University’s Mercatus Center ranks the Golden State 48th in the nation.  New Jersey and New York are numbers 49 and 50, respectively.

How about other business costs?  California had the 5th highest state premium ranking for worker compensation insurance costs in 2010 (although the state’s position improved slightly in 2011 due to other states raising their state premiums).

California ranks 7th highest in electric utility costs, with Hawaii being the highest, followed by Connecticut and Alaska.

According to the Small Business & Entrepreneurship Council, California has the third-highest per-gallon gasoline tax (Connecticut and New York are #1 and #2) and by far the highest tax on diesel, at 52.5 cents per gallon. (Some numbers below also come from the SB&EC report.)

California perennially has the second-highest gasoline prices at the pump (Hawaii is #1), although the state has regularly been ranked 3rd or 4th in oil production in recent years.  (In the past week the statewide average was $4.15 for a gallon of regular, down from $4.36 a month ago.)  In spite of having the third largest oil and gas reserves of any state in the nation, California is ranked dead last among all US jurisdictions for global oil investment.  The fact that California hasn’t issued a new offshore drilling permit for over 30 years is undoubtedly a factor, as is the fact that the Monterey Shale Oil Field, which holds 64% of all the recoverable shale oil in the United States, is hamstrung by lawsuits, a typical condition in the state for both drilling and refining operations.

In spite of the state’s natural bounty, California produces only 37% of its statewide oil consumption.  The rest comes from other states and countries, at added expense.

In terms of the employer burden of health-insurance mandates, California is 9th among the 50 states and the District of Columbia.  (Rhode Island, Maryland, and Minnesota have the highest burdens.)

Meanwhile, California ranks 4th highest in state and local government spending per capita.  The District of Columbia is the highest, followed by Alaska, Wyoming, and New York.

Ah, yes, state spending.  California has by far the largest debt of any US state, at around $612 billion with state and local debt and pension liabilities included.  In terms of raw numbers, New York posts a pathetic second place with only $305 billion.  The size of California’s population allows the Golden State to slip to only 7th place in terms of per capita state and local debt.  The District of Columbia walks off with another prize in this category, having on the books 85% more debt per capita than the 50-state average.

The California debt spiral is due in part to the steep decline in state tax revenues.  The 22% year-on-year decline observed in February 2012 doesn’t tell the whole story either; California had already posted dramatic revenue losses in business and property taxes between 2007 and 2010.  Business-tax revenues dropped 18% in that period, and property-tax revenues fell 30% due to the real estate market crash.

Let’s talk population trends.  Many readers are familiar with the arresting Golden State statistics cited by a Wall Street Journal article in March:

From the mid-1980s to 2005, California’s population grew by 10 million, while Medicaid recipients soared by seven million; tax filers paying income taxes rose by just 150,000; and the prison population swelled by 115,000.

The net gain in tax filers includes the author:  I was added as a tax-paying filer to the California income tax rolls in 2004.  Apparently there are another 149,999 of us, and I’m thinking we need a T-shirt.  (And yes, alert readers, I understand that this was a net gain, reflecting both additions to and subtractions from the tax rolls over time.  Just having some fun with these sad little numbers.)

California also has the distinction of having 12% of the US population and 33% of the nation’s welfare recipients.  Governor Jerry’s Brown’s 2012-13 budget proposal includes $100 billion for health and human services, which, on an annualized basis, is more than all the state and local spending in 27 of the 50 states.

In California, meanwhile, the tax code is steeply progressive.  Prior to the recession, the state got 45% of its income tax revenues from the top 1% of filers.  As the Wall Street Journal pointed out last year, the incomes of filers in that top 1% — which in California starts at $490,000 – are more volatile than the incomes of other filers.  California, New York, Connecticut, and Illinois are some of the states most dependent for revenue on the top 1%, and they have opened up the biggest state deficits during the recession.

How many businesses are leaving California?  In 2011, 254 businesses left California, or an average of 5 per week.  202 left in 2010, 51 in 2009.  Even “green” businesses are leaving California.  The business environment is that overregulated, and costs are that high.  A business saves, on average, between 20% and 40% on costs by moving out of California.  (Even the lower figure is astounding for a move within the same nation.)

But according to a 2011 report, 2500 employers ceased operations in California between 2007 and 2011.  The great majority of them simply went out of business.  (I can certainly vouch for the observability of that trend in my area of Southern California.  Besides small businesses closing – I can’t seem to keep a dry cleaner for longer than 6 months – we’ve had a number of big chain businesses pull out, leaving gigantic empty stores and parking lots.  The last time I stocked up on household supplies at the local Wal-Mart, there were no greeters at the doors.  An ominous portent.)  How did California’s real GDP growth rank in 2011?  34th in the United States.

As of January 2012, which state had the highest average mortgage debt per household?  California, with $313,000.   California has had the second highest foreclosure rate of any state throughout the recession (Nevada has the highest).  In terms of the state’s percentage of underwater mortgages, California ranks only 6th (Nevada, again, is #1).  But that’s a little deceiving, since the value of the underwater mortgages in California is over $544 billion. That sum represents nearly 30% of total mortgage debt in California, which is $1.94 trillion – or 22% of all mortgage debt in the United States.

Well, but which state had the highest tuition hike for its state university system in 2011?  That would be California, with a tuition jump of 21%.  (This hike mitigated somewhat the advantage of in-state tuition for those here illegally, which California offers along with 11 other states.)

Oh, and California has far and away the most endangered animal species, with 111.  No other state comes close.  Hawaii has California beat on endangered plant species, however, with 273 to the Golden State’s 178.

J.E. Dyer’s articles have appeared at The Green Room, Commentary’s “contentions,Patheos, The Weekly Standard online, and her own blog, The Optimistic Conservative.

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Yeah, Cali sucks blah, blah. I’ve lived all over this country and have concluded there are a lot worse places to live than California. Despite it’s problems, I’m a conservative Californian for the long haul.

jbh45 on April 30, 2012 at 8:20 PM

These numbers are the reason I was resistant to lionizing Perry for Texas’ economy. Texas’ biggest competition is not competition at all. If you ran a race and the next 3 fastest guys decided to run the race backwards how big of an accomplishment is your win?

Don’t get me wrong I’d still move there but if California just moved to the middle of the pack in these statistics they would have a much better economy.

I used to think that California’s move to the right was inevitable: As the public sector collapses people will want jobs so they’ll have to vote more conservative regardless of party. But I can see that not happening. With USC paying Los Angeles to put more cops in their area the model has been set. Wealthy liberals might just stop predtending to care about the poor and build a fence around there communities. The rich will simply move the police resources closer to themselves as the buffer of the middle class erodes and the poor masses are drawn ever closer…

Theworldisnotenough on April 30, 2012 at 8:30 PM

Yeah, Cali sucks blah, blah. I’ve lived all over this country and have concluded there are a lot worse places to live than California. Despite it’s problems, I’m a conservative Californian for the long haul.

jbh45 on April 30, 2012 at 8:20 PM

I too want to stay but I am driving across the country over the summer and I will spend a few days in Houston going on interviews and checking out the city.

The politicians dont want me here. What is a wannbe hot rodder to do? They got Fontana closed and building a street/strip car built after 1975 is damn near impossible.

Theworldisnotenough on April 30, 2012 at 8:33 PM

As much as I love California, I’m glad I left that state. However, I don’t think I’ll ever come back to California.

Conservative Samizdat on April 30, 2012 at 8:48 PM

Sadly, its their own doing and now many of them are moving and infecting the rest of the country to bring other states down like they did Cali.

watertown on April 30, 2012 at 8:51 PM

I’m one of those businesses that left in 2011. Small potatoes, I just put 3 people on the California unemployment rolls. Some of my reasons:
–taxes, personal and business. Local, State, Federal taxes combined were about 60% of my personal income. Taxes for the business, of which I was the sole proprietor, ate close to 30% of my gross revenues. This was untenable.
–Energy costs. My PG&E Bill for my 2600 square foot home averaged $1500 per month! My small 1800 square foot office contributed another $1200 per month to them. This was untenable.
–I’m not even in the most highly regulated business, but my compliance costs were set to rise over 200% with the new California environmental laws. This would have amounted to almost 7% of gross revenue. Untenable again.

I’m now happy and maybe getting fat in Texas. Much more reasonable and taxpayer friendly. I was born in California, but I am very glad to have left. Let the libtards have it, and pay for it.

NOMOBO on April 30, 2012 at 8:59 PM

Actually I am gratified to see such a socialist failure at the hands of all those left coast liberals. Morons!

ultracon on April 30, 2012 at 9:33 PM

Burke on April 30, 2012 at 4:54 PM

You’re not alone. But I bet you live close to, or on, the coast.

Our political contributions go to conservatives in other states because contributing to Republicans here is generally a waste of money.

GaltBlvnAtty on April 30, 2012 at 7:52 PM

Same here. I call the California GOP the “Feckless Boys,” because they’re so worthless. They’re scared of their own shadow.

There are lots of good people in California, and they come from all ethnicities and backgrounds. If you look at a red-blue map, the coastal counties are generally blue (San Diego and Orange are usually red; Ventura often is), and the inland counties are reliably red. But 95% of the population is in the coastal counties. The unions and special-interest lobbies have their hooks in LA, in most of the Bay area, and in Sacramento.

One funny thing about the “green” lobby in LA and SF is that most of its vocal members have never even heard of most of California, much less been there. They think Big Bear and Tahoe are the edge of nowhere. I’ve lived in a lot of USA, and I’ve never lived in a state as unaware as most coastal Californians seem to be of the totality of its heritage.

J.E. Dyer on April 30, 2012 at 9:45 PM

is it true that if California declares bankruptcy, it reverts to territorial status & loses its Congressional representation?

8 weight on April 30, 2012 at 10:21 PM

A classic by Victor Davis Hanson: “Two Californias”

and a more recent essay “Welcome to the California Outback”

Telling it like it is by a veteran conservative writer.

AesopFan on April 30, 2012 at 11:28 PM

“Californication” wasn’t just the name of a TV show. It’s the State policy toward business owners!

Art on April 30, 2012 at 11:42 PM

For what it’s worth riddick, in 2000, GW won actually won more counties than Gore did—it was cool to see 90% of the state RED. Of course we all know that LA and SF control the total state electorate.

Rovin on April 30, 2012 at 6:05 PM

That was a long time ago. After RINO muscle man did a con job on the entire state, GOP in GULAG won’t recover for a long, long time. I cringe every time I hear “but your Republican governor…”, no one married into Kennedy’s clan can ever be Republican, let alone a conservative.

I lived in Bay Area for 18 years, then 3 in Sacramento before moving out of GULAG altogether this past January. Even previously reliable GOP Orange County is now nothing more than liberal, save for a few enclaves areas here and there, I know since I traveled a lot and met many of our customers. I met just a few true conservatives, sadly so.

Sadly, the majority of people fleeing California are taking their failed voting patterns with them. They’re destroying Texas. Personally, I think they should be required to live in their new state for 4 years before they are allowed to vote in any state or local election.

lonestar1 on April 30, 2012 at 8:02 PM

You are making a big mistake by lumping us together with those same morons who destroyed GULAG. It is the IT morons who first moved to GULAG in early to late ’90s who only strengthened liberalism in GULAG and then migrated to Austin and other parts of TX and CO and took their liberal desease along with them. They are a virus, a deadly virus at that… I moved out of GULAG, but I will be the last one to promote liberal “values”, I hate these morons with passion.

riddick on May 1, 2012 at 1:59 AM

Actually, WA State’s wine country is growing by leaps and bounds and is producing some of the best wine in the country.

Voter from WA State on April 30, 2012 at 10:50 PM

Why move from one liberal place and into another?

riddick on May 1, 2012 at 2:00 AM

What I don’t understand is why people fleeing California continue their liberal voting habits. Don’t they realize that liberalism caused the damage that necessitated flight in the first place? And that ,in sufficient numbers, ex-Californians can create the exact same havoc elsewhere? Even an amoeba, as dumb as a piece of plaster, in scientific tests, rarely makes the same mistake twice.

MaiDee on May 1, 2012 at 4:43 AM

Funny. I always thought an earthquake would take California down, but thanks primarily to Democrats, Mother Nature has been taken off the hook.

insidiator on May 1, 2012 at 7:45 AM

I’m speaking up as a resident of NY and the grooming process is in full swing to get Andrew Cuomo slotted to run for the White House. The bureaucracy here mirrors California and some day it will topple down. Our NYS Thruway was suppose to be a freeway when it finally paid for its self, it is not. The top heavy bureaucracy was so bad the State trimmed it back and made a new bureaucracy in charge of the canals and rivers and water ways here in the State. Unbelievable entitlement programs keep the tax payer in slavery. We too will follow California down the drain.

mixplix on May 1, 2012 at 8:23 AM

About the only businesses to to grow in my central California city are tattoo parlors. Appears everyone under 30 of every ethnic identity has them from head (and neck) to toe(s).

FireBlogger on May 1, 2012 at 8:42 AM

The politicians dont want me here.

Theworldisnotenough on April 30, 2012 at 8:33 PM

The Northridge quake was the straw that broke my camel’s back. It was made very clear to me that no one in cali wanted me there. The politicians were just the most vocal about it.

Alabama, on the other hand, has been most welcoming. Given everything I heard (and, to my shame, believed) about this state before I got here, I gotta say it was a breath of fresh air.

But I no longer defend my adopted home state of Alabama from the bogus claims of racism and rampant stupidity. Let the bigoted californians think what they like, as long as it keeps them from coming here.

runawayyyy on May 1, 2012 at 2:28 PM

What I don’t understand is why people fleeing California continue their liberal voting habits. Don’t they realize that liberalism caused the damage that necessitated flight in the first place? And that ,in sufficient numbers, ex-Californians can create the exact same havoc elsewhere? Even an amoeba, as dumb as a piece of plaster, in scientific tests, rarely makes the same mistake twice.

MaiDee on May 1, 2012 at 4:43 AM

As already pointed out above, the “Californians” you are speaking of, as do others as well, are not “Californians”, they are transients who invaded California back in mid ’90s in the internet boom and bust from liberal New England and East Coast states. Destroyed California, as if local liberals weren’t doing a fine job of that already, and then moved on to other states.

riddick on May 1, 2012 at 3:08 PM

I was stationed out in California for a couple of years, and while I got to see my fair share of cool things that make every other state look like a third-world country in comparison, the high price of everything from movie tickets and gasoline to property horrified me.

I miss wine country, but I always felt this creeping financial dread while driving around out in CA, like money was slowly draining through a hole in my pocket for every second I merely existed there.

mintycrys on May 2, 2012 at 10:42 AM

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