Crossposted from Calitics
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 California State 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.