Death, Taxes and Bailouts in Gavin Newsom’s California

Why is the governor traveling out of state so much? Maybe he wants to get out of Dodge. 

By Allysia Finley. Excerpts:

"Unemployment is climbing as hordes of workers and businesses leave. The state faces an estimated $68 billion budget deficit this coming year. Cities are bleeding red ink as their labor costs swell and tax revenue shrinks."

"Employment in the Golden State has fallen by 180,520 since June while its jobless rate has climbed to 5.1% from 4.1% a year ago. The national unemployment rate is 3.7% and even lower in Florida (3%), where employment has grown 111,433 over the last six months."

"manufacturers laboring under the state’s climate regulations [are laying off workers]. Speculative startups are struggling to raise private capital amid higher interest rates, which have also chilled the market for initial public offerings."

"The S&P 500 index closed last year 24% higher than the year before. Yet California’s personal income and corporate tax revenues in December were 3.3% and 21% lower, respectively."

"the state has blown through tens of billions of dollars in federal pandemic largess, expanded Medicaid to undocumented immigrants, and approved new labor agreements with generous pay increases for government workers including prison guards. California spends $132,860 annually per prisoner, up 90% from a decade ago."

"Sacramento’s required pension contribution for a highway-patrol officer now equals nearly 68% of compensation, meaning that this year the state must pay about $68,000 into the pension fund for an officer earning $100,000."

"The city manager in Sacramento recently suggested patching a $50 million budget gap by taking longer to fix potholes and broken street lights."

"San Diego projects a $172 million budget shortfall."

"Although retail spending nationwide continues to grow faster than pre-pandemic levels, Californians have less money to spend at stores and restaurants because they are having to shell out more on gasoline, electricity and home and auto insurance. Blame the state’s progressive policies."

"Los Angeles City Administrator Matthew W. Szabo recently warned of a $400 million deficit owing to rising labor costs and lower-than-expected tax revenue."

"San Francisco faces a nearly $800 million deficit despite having imposed several new taxes in recent years, including one on the gross receipts of businesses whose highest-paid manager earns more than 100 times the median compensation of its San Francisco-based employees."

"This tax is layered on another new gross receipts tax on business revenue in San Francisco above $50 million and a tax on commercial rents."