- On the surface, California seems to be doing well. The economy has been growing, and we have avoided the budget crises that used to plague the state. But there are big problems.
- The first is inequality. By the Census Bureau's supplemental poverty measure, California has the highest poverty rate of the fifty states. https://www.census.gov/content/dam/Census/library/publications/2017/demo/p60-261.pdf This measure accounts for housing costs, which are extremely high in this state. The contrast of rich and poor is particularly jarring in Los Angeles and the Bay Area, where limousines routinely pass by homeless people.
- The second is the long-term budget picture. The unfunded liabilities of pension systems will create ever-larger taxpayer burdens. And the mild budget season will come to an abrupt end when the next recession hits. The top one percent of taxpayers account for nearly half of state personal income tax revenue. The healthy stock market of recent years has been a boon to them and to the state's treasury. When stocks go down, the revenues will dry up.
Thursday, June 7, 2018
State of the State
In Defying the Odds, we discuss state and congressional politics as well as the presidential race.