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May 14, 2012
11, 16, 735
Those numbers aren't some trick to help you fall asleep, those are the numbers that show the stark reality facing California and the fiscal peril posed by Prop 29.
11: As in 11 percent unemployment, far above the national average of 8.2 percent. City Journal eloquently laid out the decades long policy trends that have driven job creators out of the state.
A more familiar statistic signaling California’s problems is its unemployment rate, which is now the nation’s second-highest, right after Nevada’s. Of the eight American metropolitan areas where the joblessness rate exceeds 15 percent, seven are in California, and most of them have substantial minority and working-class populations.
However, unemployment is the system, not the ailment. California’s economic woes are due to punitively high tax rates and an anti-business regulatory system. Tax Foundation ranks the state 48th in its Business Tax Climate Survey. Chief Executive, in their poll of Fortune 500 Company CEOs placed the state dead last. It is impossible to create jobs if the job creators face such disincentives for investment.
16: As in $16 billion. Governor Brown’s office released an update on the projected annual deficit numbers. Monday’s revision almost doubles the previous estimate of $9 billion. GOP legislators are spot on saying last year’s budget was a fraud from the moment it was signed. Governor Brown and his allies were counting on $4 billion in additional revenue through highly optimistic economic forecasts.
Additionally, the state spent $2 billion more than anticipated. Moreover, Governor Brown’s proposed budget would further increase spending. Of course, none of this has deterred the Governor from pitching his multi-billion dollar tax increase on the November ballot.
735: As in $735 million, the potential tax increase if Prop 29 is passed. None of the money will go towards paying down the $16 billion deficit. Instead it will go towards propping up a new unaccountable spending bureaucracy.
California cannot pay its current bills, much less the programs found in Prop 29. None of this touches on the over $2.5 billion in local bonding and tax increases found elsewhere on next month's ballot.
Today’s revenue numbers should be a call to action on spending reform and right-sizing government, not raising taxes.
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