Welcome to the October Law and Business issue of NorthBay biz magazine. This month’s cover story focuses on The Affordable Care Act. There’s also a special report on health and medicine, plus dozens of columnists and special features, in the area’s only locally owned business publication. You can rely on NorthBay biz as your source for exclusive local business news and information.
I’ve touched on this subject in previous columns, but want to return to it now because California has done nothing to stem the exodus of its most valuable resource. In fact, things have only gotten worse. Between 2000 and 2009, a net 1.5 million people left California for other states. Of those 1.5 million, 875,000 left between 2006 and 2009. That means productive people are leaving the state in droves and taking their companies and jobs with them. What’s chasing them away? Why leave the unbelievably great physical environment that is California?
Obvious to most of us, but not on the radar of our elected officials, the reasons are exorbitantly high taxes, stifling regulations and myriad fees. According to Standard & Poor’s, California also has the lowest credit rating in the nation on top of the third highest unemployment rate in the country. In the face of all this, the people of California are facing a plethora of new tax measures, including a higher sales tax, income tax, soda tax (yes, really—a soda tax) and dozens of fee increases on this November’s ballot.
What’s chasing people away? That’s just the opening salvo. How about $500 billion in unfunded public employee pension liability? Our state is home to 11 percent of the nation’s population, but it’s also the home of a staggering 34 percent of the nation’s welfare recipients! Oh yeah, can’t forget about the $16 billion, and rising, budget deficit.
And it’s not just the “how many” leaving that’s hurting the state and eroding its tax base, it’s also the “who many.” The current estimate is that more than 2,000 upper-income Californians are escaping weekly to avoid the ever-worsening business climate. In every business climate survey conducted, California ranks last or in the bottom three. And tellingly, in a state where the teachers are among the highest paid in the nation, students’ test results are among the worst in the country.
Here are some stats from Spectrum Locations Consultants that concisely paint a picture of California’s plight. The company noted that 254 California companies moved some or all of their work and jobs out of the state in 2011. That was 26 percent more than in 2010 and five times as many as in 2009. According to SLC President Joe Vranich, the top 10 reasons companies are leaving the state are: “Poor rankings in surveys; more adversarial toward business; uncontrolled public spending; unfriendly business climate; provable savings elsewhere; most expensive business locations; unfriendly legal environment for business; worst regulatory burden; severe tax treatment; and unprecedented energy costs.”
It seems impossible that politicians continue their tax-and-spend policies in light of the results they’ve produced. Yet with every election cycle, even when some of the players change, this doomed path isn’t only followed, it’s expanded. I don’t know how our politicians can rationalize the results of these policies. They have us well down the road to ruin. And, at some point, the journey will pass the point of no return.
Let’s conclude with this paraphrased offering of anonymous Internet wisdom that critically captures a major part of the current administration’s reelection strategy. I’ve never heard this said as simply or as well. Class warfare at its best.
The folks who are getting the free stuff don’t like the folks who are paying for the freestuff, because the folks who are paying for the free stuff can no longer afford to pay for both the free stuff and their own stuff.
And, the folks who are paying for the free stuff want the free stuff to stop.
And the folks who are getting the free stuff want even more free stuff on top of the free stuff they’re already getting!
Now… the politicians who are forcing the people who pay for the free stuff have told the people who are receiving the free stuff that the people who are paying for the free stuff are just mean, prejudiced, racist and selfish.
So… the people who are getting the free stuff have been convinced they need to hate the people who are paying for the free stuff by the politicians who are forcing some people to pay for their free stuff and giving them the free stuff in the first place.
We have let the free stuff giving go on for so long that there are now more people getting free stuff than paying for the free stuff.
Now understand this: All great democracies have committed financial suicide somewhere between 200and 250 years after being founded. The reason? Voters figured out they could vote themselves money from the treasury by electing politicians who promised to give them money from the treasury in exchange for electing them.
The United States officially became a Republic in 1776, 236 years ago. The number of people now getting free stuff outnumbers the people paying for the free stuff. We have a chance to defy history and change our fate in 2012.
That’s it for now. Enjoy this month’s magazine.
