By now, everybody has learn the studies of California’s demise. Hewlett Packard, Oracle and even Tesla are transferring their headquarters out of state. Our inhabitants is shrinking for the primary time in 100 years. We have now excessive taxes, homelessness, wildfires and drought. Will locusts be subsequent?
Whereas California has its share of issues, it’s nonetheless the world’s fifth largest economic system and the expertise chief of the world. Germany is the world’s fourth largest economic system with a GDP of $3.8 trillion, however California, with a GDP of $3.1 trillion, will probably move Germany within the subsequent decade. And we’re doing it with lower than half Germany’s inhabitants. Meaning the typical California employee is roughly twice as productive as probably the most environment friendly European nations.
We definitely have excessive taxes, however we’ve typically invested these correctly. The World Financial Discussion board ranks three California colleges among the many world’s high 10 universities. And we now have the nation’s most interesting group faculty system, with 116 campuses offering important entry for a leg up for our immigrant and working-class inhabitants. Our leisure and agricultural sectors additionally lead the world in manufacturing. On high of that, we now have 4 of the ten largest market cap corporations on the planet: Google, Apple, Fb and NVIDIA. Texas, Florida and New York have a mixed whole of 1 with Tesla, which in fact was based in California the place most of its 80,000 workers stay.
However the California Legislature wants to concentrate. Three crucial issues are stopping California from reaching its potential:
• The typical California dwelling worth is $818,260 (twice the nationwide common). Excessive housing prices exacerbate homelessness and make it onerous for lecturers, firefighters and younger individuals to understand the dream of homeownership. It additionally triggers the nation’s highest rental charges. The answer would require a mix of CEQA reform and a carveout of prevailing wage necessities for workforce housing to deliver prices down. The state additionally wants to supply incentives for builders to construct city housing close to transportation corridors and penalties for cities that don’t construct ample workforce housing. None of those options is straightforward, however with out main housing reforms, corporations will relocate and homelessness will worsen.
• California has world-class universities, however our Ok-12 program lags. California’s fourth grade college students rank thirty ninth in English and forty fourth in math. The state must develop a Twenty first-century curriculum to ensure we’re instructing coding and quantitative evaluation beginning in elementary faculty to make sure our college students can be job-ready. And we'd like primary teacher-performance requirements, past years of service, for instructor accountability. We additionally want to seek out equitable methods to hyperlink increased instructor pay to raised scholar efficiency whereas growing faculty funding.
• California has the very best earnings tax within the nation at 13.3%. For this reason a few of our best-known corporations and entrepreneurs — from Oracle to Elon Musk — are leaving. The reply is much less about chopping taxes than it's about spreading the price of California’s $262 billion price range throughout a broader set of high-income earners (the highest 5-10% slightly than simply the highest 1%) and setting apart more cash for our rainy-day fund. The most important downside we now have will not be the dimensions of our present tax fee however the persevering with fee of tax will increase and the “curler coaster” budgeting course of that lead to booming price range will increase adopted by sharp layoffs of important public workers akin to lecturers, firefighters and police.
California’s long-term competitors will not be Texas or Florida; it’s Germany, Japan and China. Our economic system will proceed to develop sooner than any of those international locations as a result of our universities have made us a magnet for the neatest individuals on the planet to come back and settle in a state that values variety. We simply have to be sure that we proceed to make our economic system work for everybody. As former president of the UC system, Richard Atkinson mentioned, the long run tends to reach first in California.
Steve Westly is the previous California State Controller and ran for governor in 2006.