2009 November 02 Monday
Texans Get More For Their Tax Dollars Than Californians

In a piece written for City Journal William Voegeli argues that Californians get less per tax dollar and that high tax states fail to deliver higher quality services.

State and local government expenditures as a whole were 46.8 percent higher in California than in Texas in 2005–06—$10,070 per person compared with $6,858. And Texas not only spends its citizens’ dollars more effectively; it emphasizes priorities that are more broadly beneficial. In 2005–06, per-capita spending on transportation was 5.9 percent lower in California than in Texas, and highway expenditures in particular were 9.5 percent lower, a discovery both plausible and infuriating to any Los Angeles commuter losing the will to live while sitting in yet another freeway traffic jam. With tax revenues scarce and voters strongly opposed to surrendering more of their income, Texas officials devote a large share of their expenditures to basic services that benefit the most people. In California, by contrast, more and more spending consists of either transfer payments to government dependents (as in welfare, health, housing, and community development programs) or generous payments to government employees and contractors (reflected in administrative costs, pensions, and general expenditures). Both kinds of spending weaken California’s appeal to consumer-voters, the first because redistributive transfer payments are the least publicly beneficial type of public good, and the second because the dues paid to Club California purchase benefits that, increasingly, are enjoyed by the staff instead of the members.

Spending is up even after adjusted for population growth and inflation. Most Californians have nothing to show for it.

Californians have the best possible reason to believe that the state’s public sector is not holding up its end of the bargain: clear evidence that it used to do a better job. Bill Watkins, executive director of the Economic Forecast Project at the University of California at Santa Barbara, has calculated that once you adjust for population growth and inflation, the state government spent 26 percent more in 2007–08 than in 1997–98. Back then, “California had teachers. Prisoners were in jail. Health care was provided for those with the least resources.” Today, Watkins asks, “Are the roads 26 percent better? Are schools 26 percent better? What is 26 percent better?”

See the graph on that web page that shows the proportion of total revenue that goes to each of several categories in Texas and California. More money goes to government administration and public employee retirement in California than in Texas. But curiously, a larger fraction of the total budget in California goes to public safety. I assume that means prisons, police, and judiciaries. I'd like to see the ratio of police to population as well as prisoners and prison guards to population. Are Californians jusy paying more for the same (or lower) level of public safety services?

California has lots of obsolete commissions and boards that exist so that politicians can parachute into them after their legislative careers come to an end.

The resistance comes from the blob of interest groups, inside and outside government, that like California’s public sector just fine the way it is and see reform as a threat to their comfortable, lucrative arrangements. It turns out, for example, that all the pointless boards and commissions are bulletproof because they provide golden parachutes to politicians turned out of the state legislature by California’s strict term limits. In the middle of the state’s most recent budget crisis, State Senator Tony Strickland proposed a bill to eliminate salaries paid to members of boards and commissions who, despite holding fewer than two formal hearings or official meetings per month, had received annual compensation in excess of $100,000. The bill died in committee.

We pay for some awesome retirement packages.

Take entitlements and public-employee pensions, which are, Watkins says, “the real source of the state’s fiscal distress.” A 2005 study by the Legislative Analyst’s Office (California’s version of the Congressional Budget Office) found that pensions for California’s government employees “surpassed the other states—often significantly—at all retirement ages.” California government workers retiring at age 55 received larger pensions than their counterparts in any other state (leaving aside the many states where retirement as early as 55 isn’t even possible). The California Foundation for Fiscal Responsibility periodically posts a list of retired city managers, state administrators, public university deans, and police chiefs who receive pensions of at least $100,000 per year. The latest report shows 5,115 lucky members in this six-figure club. The state’s annual bill for polishing their gold watches is $610 million.

I don't see how California gets better. The taxes and other problems drive out the people who are most eager to vote against out-of-control parasitism. California's demographic trends don't hold out hope for a more responsible electorate.

The optimistic assessment is that things are going to get worse in California before they get better. The pessimistic assessment is that they’re going to get worse before they get much worse.

Vicious cycle that keeps getting worse? Or will a backlash ever cause needed fixes?

Share |      By Randall Parker at 2009 November 02 09:39 PM  Democracy Failure

Clarium said at November 3, 2009 12:21 AM:

The only thing that will reverse the cycle is the technological singularity.

Anyone a fan of Kurzweil here? Where are my fucking nanobots? Where's my fucking singularity? When is the singularity going to come?

miles said at November 3, 2009 12:32 AM:

Sometimes in my more pessimistic thoughts, I think that in my senescence (30 years from now), I'll live to see America become a second (third?!) world-nation with then-outdated nukes. The boomers will start dying off in earnest about ten years from now, what is left behind them is going to be a damned mess.

Its said that our CIA "threw sand in the gears" of the Soviet Union, and broke it down like a car that threw a rod on the side of the road.

Cultural Marxism has eaten away at the US like a bunch of termites on a house. The twin ideologies of our destruction, multiculturalism (third world immigration) and feminism (the destroyer of birthrates and the nuclear family) are going to make quite a wreck of this place if we dont start reversing some current trends.

Grim said at November 3, 2009 12:44 AM:

CA is royally screwed. Extremely bad governance, a 3ed world population replacing skilled workers and political class that does not give a fuck. I expect CA to be like Detroit writ large in 20 years.

averros said at November 3, 2009 3:12 AM:

I do not get "less per dollar" from CA. I get negative service. I don't need freaking cops whose only purpose in life is to boss people around and rob them on the roads - and who don't have any obligation to protect people. I don't need freaking public schools which do not teach much - but which do a lot of brainwashing. I don't need idiotic Public Utility Commissions (aka "monopoly builders"). I don't need DMV. I don't need zoning commissions, public transportation, HOV lanes, building permits, smoking bans, and endless, endless offices of who-knows-what which only seem to emit a toxic effluva of regulations and prohibitions.

It would be a relief when we start getting NOTHING from the government. I would cheer the day the State of California will close the shop.

miles - "Its said that our CIA "threw sand in the gears" of the Soviet Union,"

Well, it's a myth. The Soviet Union collapsed on its own, for the very same reason the USS of A is now collapsing - namely, the rampant collectivism strangling its economy. This was predicted and explained back in 1920: http://mises.org/books/socialism/contents.aspx (See the explanation of the economic calculation problem in socialist economy in Ch. 11).

(Feminism and the so-called multiculturalism - which is better described as "forced integration", something opposite of true diversity, are merely aspects of the collectivist ideology, which is fundamentally based on seeing people as classes, not as persons.)

Clarium said at November 3, 2009 7:16 AM:

"Sometimes in my more pessimistic thoughts, I think that in my senescence (30 years from now), I'll live to see America become a second (third?!) world-nation with then-outdated nukes. The boomers will start dying off in earnest about ten years from now, what is left behind them is going to be a damned mess. "

What about Europe... the benefical effect of the boomer's deaths would be like the plague... an increased living standard for the survivors due to a contracting labor force. Would the surviving population be Muslim and not European? Not directly related to the post, but does anyone have some sort of insight that I do not have?

Damn, that beneficial outcome doesn't seem likely that will happen in the US.

How much of Detroit's decline was due to free trade. At least the high paying jobs kept the blacks in check.

Mirco said at November 3, 2009 11:16 AM:

The surviving population will be europeans.
The muslims form the most welfare dependent group in Europe.
A large part in the northern coutries is on the dole from their birth.
Take away the dole and they will leave en masse or die.
The surviving europeans (and the integrated immigrants like east europeans and chinese) would be able to defeat any and all muslim take-over in few years at most, as they have the expertise to build and run a complex modern society.
If such civil-war scenario became true, modern weapons will be used to the extend of their power, without consideration of "humanitarian laws".
There will be the famous "rivers of blood" and Europeans will be available to "make a desert and call it peace".

sg said at November 5, 2009 5:42 AM:

Texas has a Sunset Commission to eliminate obsolete state agencies.


There is also a movement to pass legislation to cap state government spending at current per capita levels.

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