Being reliant on your citizens for tax money means having citizens available to tax; a luxury California seems desperate to do without.
According to a Van Lines moving study, the exodus out of California has not abated much since the pandemic. The state has lost millions of people over the last four years. 53.3% of those who left made over $150,000 per year.
That's a lot of income tax that fled the state: To the tune of a $27.6 billion deficit in the current budget.
Governor Gavin Newsom has recommended using $12.2 billion of California's rainy day fund to cover some of the difference, but the rest needs to be cut or be paid for with an increase in taxes.
What needs to be cut and what stays is so typically Californian, that they're almost sure to lose more citizens over the next few years.
Let's take a look:
Cuts:
$90 million of trial court funding (as if they prosecuted criminals anyway)
$10 million in Department of Justice Division of Law Enforcement funding
$80 million of the Department of Corrections and Rehabilitation's funding (eliminating 4,600 beds across 13 prisons). Department of Finance deputy director for external affairs H.D. Palmer said,
These proposed reductions are unallocated reductions, meaning that it would be up to the department as to how they would be implemented.
Using $6.9 billion allocated for Medi-Cal (California's medical plan for low-income residents) provider payments to pay Medi-Cal bureaucrats. Doctors already said the payments were too low to stay in business.
$100 million to clean up homeless camps
That all sounds utterly awful.
So, what did they want to keep?
Funded:
$1 billion Homeless Housing, Assistance and Prevention grants
$6.7 billion of General Fund solutions in climate-related programs
$4.2 billion more for the high speed rail system that has already cost $128 billion and goes nowhere useful.
$90 million in Outdoor Equity Grants.
Not only that, but the California Democrats are looking at raising lots of taxes on businesses.
Namely, they want to reinstate the unpopular rule that doesn't let businesses write off operating expenses for taxes.
In other words, California businesses will be paying taxes on their gross income and not their net profit.
Loren Kaye an associate to Californian Chamber of Commerce think tank, California Foundation for Commerce and Education, said,
We're all about innovation. It's one of our great competitive advantages and it could be heartbreaking to see people think that we're not supporting innovation the way we have historically.
All that to say, I think the Californian exodus is just getting revved up.
If you're still there, get out quick!
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