Will California’s Outlier Status Accelerate Exodus?
After recovering from the shock of the presidential race, California pundits began absorbing what all this actually means. There is broad agreement that the rightward movement by the rest of America has only increased the political divide between the nation as a whole and California.
This divide has widened so significantly that Governor Brown joked about building a wall around the state to protect it from nasty conservatives. And a handful of ultra-progressives, distressed at the thought of a Trump presidency, are planning an initiative they hope will lead to California seceding from the United States. (Newsflash for backers of this “Calexit” effort: That a state can’t secede from the Union was resolved in 1865 when General Lee surrendered to General Grant at Appomattox).
Putting the jokes and unrealistic fantasies aside, there are real world implications for the increasing chasm. First, if it were evident prior to the election that California has “go it alone” policies on climate change, it is even clearer now. Sure, Washington will continue to pay lip service to greenhouse gas reductions, but broad, draconian laws and regulations perceived to be damaging to the economy will be shelved.
Second, the High Speed Rail project might have just graduated from being a mere pipedream to a true fantasy. Already Congress had shut the spigot of federal money and the project has been on life support using cap and trade revenue which doesn’t generate a fraction of what it needs for the train to become viable.
Third, perhaps the biggest hit to California will come in the area of healthcare. While other states have resisted full implementation, California has been held up as Obamacare’s shining example of “success.” But a Republican Congress is likely to repeal major parts of the law, including the funding for Medicaid expansion and elimination of the federal tax credits that lower premiums for most California enrollees.
This enormous gap between right America and left California will result in the state no longer being able to rely on the federal government to finance its left-of-center policies. And that’s bad news for taxpayers.
Without federal support and California’s majority party wanting no slowdown in their agenda, the pressure to raise taxes will grow even stronger. So even though California will have the highest income tax rates in the nation until 2030 – thanks to Prop 55 – and the highest state sales tax, expect the alligators of the left to be searching for their next meal. No doubt, they will put Prop 13 on the menu.
The non-stop pursuit of an even higher tax burden has already resulted in millions leaving California. The growing fissure between the rest of nation and the state’s pursuit of destructive progressive policies is giving millions more Californians an excuse to bail out.
It’s not just the hard data from the IRS and the Census Bureau that confirms this. We all know people who have made the choice to escape California’s hostile tax and regulatory environment. A neighbor of mine just left to visit the multi-acre parcel he bought in Texas. When he retires in four years, he will build a home on the property. He is currently an attorney with the state.
A close family relative and her husband left the Bay Area for Oregon in large part for tax reasons. This is especially ironic given that they are both liberals who, as California residents, voted for every tax increase on the state and local ballot.
Another close relative who was visiting her mother on the Gulf Coast of Florida tells of miles and miles of white sand beaches with homes on the ocean that can be purchased for what a 1,200- square-foot condo would cost in San Francisco. Derided as the “Redneck Riviera,” the Gulf Coast is now a favorite of former Californians in large part because there is no income tax.
Can California change course? As long as those interests which rely on government largess own the Legislature, the prognosis is not good. With trillions in public debt of all kinds, an unresponsive and arrogant administrative state and high cost of living, California is bound to see the exodus that has already started to accelerate quickly.
Jon Coupal is president of the Howard Jarvis Taxpayers Association — California’s largest grass-roots taxpayer organization dedicated to the protection of Proposition 13 and the advancement of taxpayers’ rights.