State Watch

State Watch

New England’s Blue-State Blues

By 7.25.14

They call it the “Texas Miracle,” though California doesn’t think there’s anything heavenly about it. Texas’s economic boom, driven by low taxes and a business-friendly regulatory climate under the cocksure leadership of Governor Rick Perry, is the envy of the rest of the country. There’s a running joke that California’s biggest export is its own people, headed straight for the Lone Star State.

But it’s not just California that has the blue-state blues. Outside the West Coast, the most cerulean part of the country is the Northeast, and specifically New England, the six-state region once bound together by Puritan values, now bound together by mandatory sex education classes. But while New England has embraced looser social values, economically it’s a case study in high taxes, obscene spending, and coercive regulations.

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Six Degrees of Separation?

By 7.21.14

If you were a successful venture capitalist with a few million dollars to spare you would probably look around for something worthwhile to do with your money.

That’s what Tim Draper of Silicon Valley did. He came up with an idea no one else had thought of. That is, divide California into six states. He is not the first one to propose dividing California. That distinction goes to a handful of citizens in its northwestern corner who, in 1852 (two years after California became a state) complained about inattention from the capital and wanted to join forces with some neighboring counties in Oregon. Nothing came of it. As for Draper’s plan, he told the Los Angeles Times, “California has become the worst managed state in the country. It is just too big and too ungovernable.”

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Jerry Brown’s Magical Mystery Surplus

By 5.29.14

With California’s primary election next Tuesday, Governor Jerry Brown is likely to capture close to 60 percent of the vote. According to the latest poll, his two closest Republican competitors, between them, will get 25 percent.

Why the high numbers? Unlike the unpredictable days of Governor Jerry the Younger (1975-83), Brown the Elder is quiet, predictable and exudes stability. These days, voters like predictability and stability.

He was so pleased when he announced recently that the state was running a surplus that he followed up by persuading Democratic legislative leaders to sit down with Republicans to work out a bipartisan “rainy day” plan to use part of this and future surpluses to reduce the state’s huge indebtedness.

That’s the good news. The bad news is that the surplus is an illusion. It is true that the state government brought in a gush of cash in April — 2.2 percent more than predicted. This reduced the state’s cash deficit from $16.7 billion to $10 billion. That is an accomplishment, but it’s not a surplus.

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Vermont and the Single-Payer Frontier

By 4.18.14

These days it seems everyone has a grievance with Obamacare. This includes progressives, who are annoyed that the law isn’t communizing the entire American health care system with sufficient alacrity.

Fed up with the feds, activists are now looking north to Vermont, which three years ago passed a law requiring a single-payer health care system to be in place by 2017 (the first year Obamacare allows states to deviate from the federal model). Dubbed Green Mountain Care, the program would take a page from neighboring Canada and insure the state’s 620,000 residents on government rolls.

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California’s Vanishing ‘Surplus’

By 3.28.14

Last year, California’s Governor Jerry Brown proclaimed an end to the state’s worrisome and persistent deficit. How did he do it? In the 2012 election he had fed voters the notion that a proposed income tax increase would be spent on education. California voters treat education as a sacred cow, even though the state ranks near the bottom in test outcomes. They passed the ballot issue.

On January 31 last year, the state’s General Fund had a deficit of $15.7 billion. The higher tax rates brought in new money. This, along with internal and external borrowing, made it look as if the deficit had gone with the wind, but it hadn’t. Brown called it a surplus, amid much cheering by the spendthrift legislature. 

Fast forward to the end of January this year. The deficit had been whittled down to $12.6 billion. Some surplus!

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Two Thumbs Down to Boeing Subsidy

By 12.5.13

It makes your head spin! Two months ago, Gov. Jay Nixon vetoed a bill that would have provided some tax relief for all Missourians. Today he is calling for a gigantic tax cut — amounting to an estimated $150 million a year or $1.5 billion over the course of a decade — for one company.

The governor is hoping that would be enough to entice the Boeing Company to locate its 777X commercial airplane assembly plant in north St. Louis County.

In vetoing House Bill 253 earlier this year, Nixon went around the state arguing that cutting state income taxes for individuals and corporations would harm education and mental health. Where is the same concern today in offering a lavish gift to a single, deep-pocketed company?

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A $15 Minimum Wage

By 11.4.13

A small suburban Washington city of 27,000 has recently taken center stage in the national debate over living wages. Voters in the City of SeaTac will soon decide on Proposition 1, a ballot initiative to establish perhaps the most draconian employment standards in the nation, complete with a $15 minimum wage requirement.

Labor leaders are thrilled, and it’s not hard to see why: Labor support of Prop 1 appears to be part of a growing trend to promote union organizing through local ballot initiatives.

Though small in terms of geography and population, the City of SeaTac is economically significant because it hosts Sea-Tac International Airport and surrounding travel and hospitality businesses.

Prop 1’s roots go back to 2005, when Alaska Airlines replaced unionized baggage handlers with non-union contractors. Six years later, Unite Here Local 8, the hospitality workers union, spent historic amounts of money to successfully finance three city council elections.

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Another IRS Outrage

By 6.20.13

Clinton IRS commissioner: Tax audit of Virginia farmer just "a coincidence."
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