California Gov. Brown Faces Reality Check

June 14, 2018 | Joe Guzzardi

A few weeks ago, I turned down an all-expenses-paid invitation to attend a late summer conference in San Francisco. After my 2016 visit to the Bay City, I vowed never to return. San Francisco is, to put it gently, an undesirable destination. Since most of California’s major cities are as unpleasant as San Francisco, I’ll likely never return to my native state. I left California in 2008 because of acute overcrowding and a state government determined to make living conditions worse for its residents, especially those already struggling in the lower economic bracket.

A comprehensive listing of all California’s failures would be an 800-page treatise. But a brief summary of the financial consequences of Sacramento-induced woes follows. For eight years, Gov. Jerry Brown has ignored multiple red flags that a responsible leader would recognize as a call for immediate directional change.

While Brown is taking bows for leaving his as yet unelected successor with a $6.1 billion surplus, nonpartisan analysts view California’s finances more pessimistically. Last year, a California Policy Center report found that state and local debt totals $1.3 trillion. Another study pegs California’s debt at $2.3 trillion, while the Capital Research Center calculated that the state has $1 trillion in pension liability alone, an average $77,000 per household. The CRC report’s subtitle accurately stated: “Governments Continue to Understate Massive Unfunded Liabilities on Public Employee Pensions.”

Brown’s math on California’s infrastructure upgrading requirement is equally flawed. Brown claims that California needs $187 billion to repair dam and road damage. Again, nonpartisan analysts came up with more overwhelming totals. The Bay Area Economic Council put California’s unfunded infrastructure requirements at $737 billion or possibly as high as $765 billion.

Meanwhile, low and middle income taxpayers fed up with expensive housing and too few good jobs can’t leave California fast enough. The exiting masses doubtlessly anticipate that California’s recently elected and its 2018 candidates will usher in an era of fiscal and public policy that will further work against the state’s poorest. Exhibit A: when SB1, the California gas tax, goes into effect next year, motorists will pay 76.7 cents per gallon in total taxes and fees. Diesel fuel will cost more.

Finally, Exhibit B, Brown’s pet project, the California bullet train, which some won’t live long enough to ride and others have no interest in traveling on, is still on the drawing board. Assuming it’s eventually completed – a huge leap of faith – initial service is projected to begin in 2029, and the Los Angeles to San Francisco route, 2033. The current cost estimate, revised upward three times since 2012, could reach more than $98 billion.

An affordable housing crisis, homelessness, poverty and a raging drug epidemic should encourage California to perform a reality check. With California teetering on the brink, the state can’t risk adding more people to its nearly 40 million population, a goal California’s leadership promotes. California Attorney General Xavier Becerra, U.S. Senator Kamala Harris, 2016 winners and most of the 2018 candidates like Gavin Newsom for governor and Kevin de Leon for U.S. Senate favor much higher immigration levels which will mean more job competition for the lower-skilled, underemployed or unemployed Californians already residing in the state. Becerra has filed 35 lawsuits against the Trump administration including some aimed at thwarting White House efforts to limit refugee resettlement and to remove convicted criminal aliens.

With its massive debt, California’s first priority should be to stabilize its population. More people means more financial obligations, a recipe for more trouble ahead.

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