Golden State Can Be Reinvigorated

Carl DeMaio Carl DeMaio 16 Comments


If you are worried about California’s future, there’s no shortage of disturbing statistics to keep you up at night. California’s unemployment rate was 9.8 percent in November – and, with a host of new regulatory mandates added when the New Year began, our state is becoming even more unattractive for businesses.

California’s three largest pension funds have promised $500 billion in retirement benefits that they don’t have the money to pay for. California’s cities have another $135 billion in unfunded pension liabilities, and a couple of municipalities have already filed for bankruptcy.

California also faces a $765 billion infrastructure deficit over 10 years. Worse, the current paradigm for selecting, financing, maintaining and managing infrastructure is dysfunctional and filled with inefficiency.

And while education costs consume more than half of the state budget, far too many children are trapped in poorly performing schools. California students lag behind national achievement averages in math, science and reading.

Without immediate action, expect state service cuts, along with closures of schools, parks and fire stations in many California cities. It’s time for taxpayers and leaders to step forward: What do we want California to look like in 10 years – and how do we get there?

Hopefully, the budget Gov. Jerry Brown is expected to release Thursday will offer a good starting point. But even though they won tax increases in November, some Democrats say even more tax and fee increases are needed. Many Democrats are also eagerly looking to expand existing government programs that have had to be cut back in recent budget battles.
Republicans, meanwhile, whose ineffectiveness has paved the way for historic Democratic supermajorities in the state Senate and Assembly, say they oppose higher taxes and support smaller government. Far too often, though, the GOP arrives at policies that voters perceive as “smaller government and subsidies for me, but not for thee.”

Both major political parties have failed to address the state’s fundamental problems. You cannot simply pump more tax dollars into a broken system – or, for that matter, starve the system, without offering credible alternatives and choices.

Californians must change the system itself – and that’s the focus of Reason Foundation’s new California Reform Agenda. The project will follow the model we developed with the successful “San Diego Citizens Budget” project, which in 2003 helped uncover that city’s financial problems and produced an ambitious reform agenda that has helped save the city from bankruptcy.

Critics said you could not implement major fiscal reforms in a city as Democratic as San Diego, which boasts a voter registration and demographics that largely mirror California. In the end, we got many reforms through a Democratic-controlled City Council – and voters overwhelmingly approved major reforms to advance the outsourcing of city services and switch city employee pensions to a 401(k) retirement program.

Our critics also said we could not solve the city’s financial woes without tax hikes. Yet, over six years, we defeated three attempts to raise taxes – and balanced budgets without tax hikes or service cuts.

It worked in San Diego. Put simply: reforming California is possible.


Comments 16

  1. Mr. Demaio to your point on education. I have an idea for parents.

    DON’T SEND YOUR KIDS TO COLLEGE!!. By not sending them to college and getting them any job, you give your kids a 4 year head start on their peers. Many employers don’t care if you went to USD, UCSD or SDSU. Furthermore your kids will be less likely to experiment with drugs. They won’t be saddled with enormous student loan debt and become indoctrinated into being a socialist. How does that prepare them for the capitalist world?

    Lower the demand for higher education, it will force colleges to adapt or focus their enrollment out of state. Bringing suckers with their money to California.

  2. Ken,

    I am sorry, but that is very bad advice.

    “…over an adult’s working life, high school graduates can expect, on average, to earn $1.2 million; those with a bachelor’s degree, $2.1 million; and people with a master’s degree, $2.5 million. Persons with doctoral degrees earn an average of $3.4 million during their working life, while those with professional degrees do best at $4.4.million.”


  3. Hypocrisy, better advice would be to pursue more inexpensive ONLINE education — in both K-12 AND college. In many cases, that will provide the needed “learning.”

    Texas is in the process of trying to provide a full 4 year college education mostly online — for $10,000. MIT is offering some free online courses. The best professors can reach tens (heck, HUNDREDS) of thousands of students via online courses.

    This area is growing rapidly. Tweedy, tenured college professors are apoplectic.

  4. Hypocricy

    That study came from the same government that twists unemployment numbers to suit the president’s political agenda. Its nothing more than marketing for a business. And yes education is a business. But this business fails its customers (students) by not prepare them for the real world unless they want a job working the fantasyland rides at disneyland. Why is it that training companies are marketing classes in how to deal with millenials and their artifical sense of self worth? They attend classes that grade on the curve. Should schools teach kids on how to work in an organization and in the real world grading on the curve works the exact opposite where the weakest link brings the group down. College provides kids with a rude awakening and a mountain of debt. But hey I sure had fun getting drunk while there.

  5. Ken,

    Unemployment among college graduates is and always has been significantly lower than for those without a college degree. College graduates also earn more and those with advanced and professional degrees do even better. Those are indisputable facts, but I wouldn’t expect a simple thing like the facts to dissuade you from what you think you know to be true

  6. Politicians like Carl Demaio put us in “mess” not supporting/Ignoring the will of voters. If prop 215 was implemented in 1996 when passed, the medical marijuana issue would be done by now. Regarding policy for revitalizing the state, just the industrialization of the cannabis plant alone would create phenomenal revenue (pharma, paper, plastic, oil, fuel…) Politicians pushing prejudices put USA behind worlds economy; like solar, another advancement America could currently be the worlds leader in! Through prejudicing Medical Marijuana, politicians created this “mess”, if they had done their “Job” not push own prejudices! I believe this issue would have been long over and our state would have revenue from medical marijuana regulations. I want to fulfill the will of people and fix! Carl Demaio had the opportunity to address the issue and he was not present or voted against while in city council! Hurting his own LGBT community as they need relief from AIDS! Politicians like Carl Demaio are the Root of our states problems,Pushing own prejudices rather then do their elected job! As a country lets “grow up” and fix these issues!

  7. Formerly Ken Dagganar


    Do you believe EVERYTHING the government tells you or just the “facts” you want to believe?

    Also do you really think you are going to convince me or the majority of righties who read this blog into agreeing with you by using a snide comment?

  8. Joe (or Ken),

    You can’t actually be saying that most of the conservatives who participate in this blog don’t believe it is advantageous to have a college education and degree. Do you really believe that only liberals strive for higher education?

  9. This is inane. It doesn’t take a government study to look around and know that those with higher levels of education generally achieve better in their careers (and thus financially) than those who don’t. I guess I’m now a liberal.

  10. A “college degree” in itself may not be the gateway to a better life it once was (and yet, it WAS just such a gateway). A lot depends on what KIND of degree one gets.

    For instance, earning a “victim theology” degree (black studies, gender studies, etc.) might be not the ticket to prosperity those students thought. And if the CA and U.S. economy continue to struggle while our welfare giveaways grow (a la Europe), we may end up with a lot of degreed folks unemployeed, or underemployed — just like Europe.

    On the other hand, a STEM degree in the tech/math fields IS likely a worthwhile ticket to punch. If one has the inclination, education foundation and intelligence, this option seems to offer reliable rewards.

    Smarter people will always do better on average than dumb people, but the college degree IN ITSELF may be losing its “purchasing power” in the marketplace. Time will tell.

  11. Agreed, Richard. I also wasn’t even addressing whether higher degreed and/or higher earning folks equates to more happiness for them. Maybe we need a government study to tell us.

  12. Barry

    4 years of sex, drugs, booze and wild parties. Of course college equates to more happiness. Parents need to know that kids who work part time while in school will be better experienced for the work world when they leave school rather than attending full time. The real world has a humbling effect on kids who expect an $100k diploma equates to an instant 100k job. Thank you Richard for pointing out that this belief needs to be reevaluated by parents. They need to maximize the ROI on their kids education. I’d like to know if a diplomas earning power is higher for the more expensive UC schools vs the less expensive Cal state schools,

  13. Actually, Joe, the UC schools can be dirt cheap — for parents and students — compared to other alternative brick and mortar colleges (except for community colleges). That’s because all poor and many middle class California UC students don’t pay the “fees” (our state’s euphemism for tuition). There are no fees for most California families with under $80K income.

    Of course, it’s just one of the MANY reasons the state of CA is broke — and getting more broke every day.

  14. Stop subsidizing college tuitions, be it through grants, taxpayer-funded tuitions, and loans and the cost will drop rapidly. So will demand.

    Moreover, recognize that a 4-year liberal arts education, while extremely beneficial to develop critical thinking skills, ain’t for every kid in the world. Some kids would be better off learning a trade (and so would “the marketplace”).

    Once upon a time, not so too long ago, a college student could work their way through a pretty decent, private college but that was before Claiborne Pell got involved.

  15. Richard thank you for the clarity on that. I wanted to put out a radical idea and see where it led. I like the results. I still think that working at a young age part time or full time is better than attending school full time. One of the first questions HR reps ask any job applicant is. “what kind of experience do you have?”

  16. Actually, Brian, while IDEALLY a liberal arts education enhances one’s critical thinking skills, in reality these days it’s usually pretty much a propaganda mill embedding collectivist dogma in students.

    When I’m occasionally unleased on college students in the classroom (a rare occasion these days), I make the point that during their entire college experience, I’m likely the ONLY conservative/libertarian speaker they will hear on campus. Even the professors usually agree.

    I wonder — how many students take a course in logic? Damn few, I suspect. I did in college, but even in the 60’s, most did not.

    If one wants to develop critical thinking, one must first critically analyze what today’s colleges offer liberal arts students. In most cases, it’s appalling.

    Few schools provide a useful liberal arts education. Hillsdale College does, and stands out as the exception. And that is truly sad.

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