California trends not looking golden

Published 9:00 am Monday, June 11, 2018

We have previously mentioned our belief that a strength of our nation is that different states with different political and economic philosophies go their own ways, serving as laboratories for the rest of us. To that end, we continue to be fascinated by scenarios playing out in some of the nation’s most liberal states on the West Coast.

Seattle in Washington state has been a focus most recently. First was the city’s $15-an-hour minimum wage experiment that didn’t go so well. More recently came its decision to impose a $250 per worker “head tax” on the city’s largest employers, an extraction of $47 million the city says it will use to build cheap housing for homeless people.

But when it comes to grand social experiments, California has always been the champion. Already several of its cities have gone bankrupt beneath the weight of astonishingly rich public worker benefit programs. One of those cities – Stockton – nonetheless recently decided to experiment with universal guaranteed income. City leaders plan to give away $500 a month to a to-be-determined group of citizens to do with as they wish. Why is unclear.

California has announced it will abide by the Paris climate accord even if President Donald Trump won’t. The state already has emissions standards that require refiners to make special blends solely for California, resulting in some of the highest fuel prices in the U.S. The Legislature seriously considered providing universal health care coverage for residents but lost resolve when confronted with the tax increase that would require.

So how are these unique policies playing with the local population these days? Not so well, if an annual survey by a San Francisco business group is any indication.

Email newsletter signup

The Bay Area Council is a public policy advocacy organization sponsored by businesses. Its latest survey of 1,000 residents finds that 46 percent plan to move out of the Bay Area in the next few years. Of that group, 24 percent say they will move to another part of the state. Sixty-one percent plan to leave California altogether.

Texas was the most popular destination, with 10 percent of those fleeing the Bay Area saying that is their state of choice. Oregon, Nevada and Arizona were other popular destinations. And as the council’s report put it, “Another 6 percent said they would go just about anywhere that was more affordable and has lower taxes.”

Unaffordable housing was the reason cited by 42 percent of those who intend to leave. Taxes, traffic and rampant homelessness are other top reasons cited.

What is truly telling about these numbers is that a majority of the 1,000 people interviewed have lived in the Bay Area more than 20 years. The same survey two years ago showed 34 percent of residents planned to move out. Last year it was 40 percent. It is not a good trend from an economist’s point of view and it is accelerating.

We have often wondered how California could continue to prosper amid ever-higher taxes, spiraling, regulation-driven utility costs and housing prices unimaginable in the rest of the lower forty-eight.

Closer to home, Illinois already stands as testament to what can happen when population flight collides with the problem of financing runaway state government. Slow-motion train wreck is an overused cliche, but it sure seems to fit what appears to be brewing in California.

Kentucky has its problems, to be sure. But when we look west and see things like this, we are inspired to count our blessings.