by Andy Caldwell
California, on the brink of bankruptcy, has amassed debt in excess of $200 billion. No other State faces a problem of this magnitude. I remind you that California’s Legislature began racking up tens of billions of dollars in debt before the current national recession began, with the tacit support of voters who approved tens of billions in bond measures. Gray Davis was recalled, principally because of debt burden, but nothing was gained in the process. The deficit has since soared.
Taxes in the State of California seriously hinder our economy, but another reason the California economy continues to spiral out of control has to do with the regulatory climate in the State. The regulatory climate also serves to explain why the State of California will be the last in the nation to recover, if we recover.
All of the sectors of our economy, including manufacturing, industry, energy, housing, transportation, farming, ranching, fishing, timber and mining have been hemorrhaging jobs as they have suffered the death of a thousand cuts due to regulations imposed upon us by our own government. Less business activity, either due to taxes or regulations, means fewer jobs and that means less revenues to the State. It is a viscous cycle.
A combination of State and Federal Rules, has created a cumulative impact unique to our State. The combination of regulators and regulations including the California Air Resources Board, the State Water Quality Control Board, the State Coastal Commission, the CA. Department of Fish and Game, the California Environmental Quality Act, the Global Warming Reduction Act (AB32), the Diesel Engine Rule and the Endangered Species Act have served to relegate our economy, which was once one of the largest economies in the world, to Third World status. Our debt burden and the regulatory climate are preventing economic recovery.
A report issued recently by Cal State Economists indicates that regulations are costing the California Economy some $500 billion per year! The report indicates that the State of California in essence eliminates 3 million jobs per year by hamstringing the economy with regulations. If the 3 million jobs were allowed to be created they would generate nearly $20 billion in additional tax revenue to the State!
Our elected representatives are hoping in time that the California economy will recover by some unforeseen miracle or that things will get so bad that voters will approve new taxes in order to alleviate our collective misery. I am of the opinion that the economy is not going to recover on its own because of the aforementioned impediments and burdens placed upon the economy by our government. Furthermore, if enough voters can be duped into approving new taxes, things are only going to get worse. No economy has ever taxed itself into prosperity. It is mathematically and economically impossible to do so.
When taxes and regulations threaten the very existence of a business, then the owners are either forced out of business or they get their business out of the State they are in.
Sacramento, get a clue!
Andy Caldwell is the Executive Director of COLAB, the Coalition of Labor, Agriculture and Business of Santa Barbara and San Luis Obispo Counties, and a 41 year resident of the Central Coast. For more information, visit the COLAB website.
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