Friday, November 18, 2016

The Illusion of California

I'm told--often by people whose paychecks come from a government entity--that California is doing fine.  The economy is great, Governor Brown has Made California Golden Again, and unicorns are farting gold dust again.  You'll pardon me if I'm somewhat skeptical.

I came across these two articles today, the juxtaposition of which shows you just how far down the track to Crazytown my home state has gone.

First, utopia:
Democrats have dominated all branches of California’s government since 2011, when Jerry Brown succeeded Arnold Schwarzenegger as governor. With the largest economy in the U.S. and the sixth-largest in the world, the state enjoys greater independence from Washington than most. It was the first state to adopt its own vehicle emissions standards, in 2002. In 2012, California created the only state-level cap-and-trade system for limiting greenhouse gas emissions after Republicans in Congress rejected a national model. California, which has more undocumented immigrants than any other state, offers them driver’s licenses as well as financial aid for college. It has imposed some of the country’s strictest background checks on firearms purchases. It’s one of three states to provide paid family and medical leave and one of five that require employers to offer paid sick leave. “This is unlike anything we’ve seen in modern political history,” says de León. “We’re going to do everything in our power to protect our people and our values as Californians.”

Hillary Clinton won more than 61 percent of the state’s vote, a higher share than President Obama won in 2012. Voters approved ballot measures decriminalizing recreational marijuana use, restricting ammunition purchases, and increasing taxes on the rich. The national election triggered a resurgence of California secession fantasies, this time under the hashtag #Calexit—a reference to Brexit, Britain’s vote to leave the European Union...

From January 2014 to September 2015, California released immigrants considered deportable under federal law in more than 11,000 instances, rather than keeping them in custody for federal agents, according to U.S. Immigration and Customs Enforcement data obtained by the Texas Tribune. The next state on the list, New York, released people in fewer than 2,000 cases...

Governor Brown has devoted himself to strengthening California’s carbon pollution rules, already the nation’s toughest. “We will protect the precious rights of our people and continue to confront the existential threat of our time—devastating climate change,” Brown said in a statement that also referred to finding common ground with Trump and the GOP where possible. Oakland Mayor Libby Schaaf says cities should be willing to uphold the Paris commitments at the local level. “You have 70 percent of the world’s greenhouse gas emissions coming from cities,” she says. “If all mayors agree to take action, we can actually render federal action irrelevant.”

California’s Democrats are also exploring ways to ensure continued access to health care. The Affordable Care Act guarantees federal subsidies for 90 percent of the 1.4 million residents insured by Covered California, the statewide health exchange, and about 5.5 million more Californians now have insurance via the Medicaid expansion made possible by the 2010 law. A repeal, as Trump and Republicans have pledged, would cost the state more than $15 billion in federal subsidies a year, according to the nonprofit Urban Institute. “In theory, California could implement its own universal health-care program,” says California’s insurance commissioner, Dave Jones—though doing so, he warns, would require significant state tax increases.
If you think all this is free, think again.  Californians already pay some of the highest taxes in the country.  We also make promises to people that we're probably not going to be able to keep:
In 2015, California tried to reform CalPERS to address its shortfalls, but they didn’t do nearly enough. The system currently assumes annual returns of 7.5 percent, which is still far too optimistic. So CalPERS plans to revise its expectations downward, which would force governments to kick in more money to meet liabilities. Local government budgets, of course, are already stretched. It isn’t long before they’ll have to ask the state and, potentially, the federal government for a bailout. And with Republicans in control in Washington, it’s hard to imagine California getting any sympathy.

California’s state government has enjoyed finally being back in the black. But with all these pension liabilities coming due, it’s unclear how long the good times will last.
I don't pay into PERS (Public Employees Retirement System), but STRS (State Teachers Retirement System).  Same idea, different agency.  To keep STRS afloat we teachers are having to pay more into our retirement fund just to get what we've already been promised, and more increases are coming.   That may keep it afloat for awhile, but as Instapundit always says, "Something that can't go on forever, won't."  Eventually, after jumping off that balcony, you're going to hit the sidewalk.

1 comment:

Ellen K said...

My sister in laws husband gets a hefty pension as the result of years working for the power grid company in the state. They live in a million dollars seaside house near the former Lakers coach. They publicly expressed they would be moving to Canada upon Trump being elected. Strangely enough, that hasn't happened. In fact,'we've heard nothing from them since before the election. During the summer they playfully visited Canada, finding out that northern arms are not nearly as open as they though. Ditto Australia and New Zealand. On top of that due to the current flat real estate industry in Cali (their words, not mine) they can't sell their mid-century, three story, two bedroom seaside loft. But it's sill worth a million bucks and rising. Which means that every time taxes rise, they get dinged. That they can't seem to see cause and effect on this is worrisome. That they may show up on our doorstep, penniless and aging is alarming. Like the rest of the nation, California is not doing nearly as well as the government elites would have us believe. That is part of the reason Clinton lost.