Street: California sustainable poverty

California has twelve million people in poverty.  That is more than most States have population.  The cause is simple—government.  High taxes, causing high cost of living, high housing and food costs—highest gas and sales taxes in the nation, along with high income and corporate taxes.  Move to Texas and you get 13% added to your paycheck—by NOT paying California income taxes.

Then you have energy and water costs—all due to government policy.

“But despite spectacular financial rewards last year to some residents in places like Silicon Valley pushing up GDP, California also won America’s booby-prize for highest poverty rate at 20.4 percent.  Of America’s top 25 major metropolitan areas, Los Angeles holds the crown as America’s Poorest Big City, according to the Census Bureau.

By traditional income levels, California would be close to the 13.4-percent average rate of poverty for the United States.  But poverty spikes to over one in five residents when factoring in the higher cost of living for housing, health care, utilities, and other basics.

Sustainability regulations constrain California housing availability with onerous building codes and impact fees that can add $100,000 per unit in cost.  As a result, average rent is $1,300 a month, about 30 percent higher than the national average.

Poverty in California?  Made in Sacramento.

Tent of homeless person on 6th Street Bridge with Los Angeles skyline in the background. California, USA. (Photo By: Education Images/UIG via Getty Images)

California sustainable poverty

By Chriss Street, American Thinker,  12/4/18

California has the highest poverty rate in the nation due to residents paying double for electricity and $1 more per gallon of gas to pay for progressive politicians’ quest for 100 percent sustainable energy by 2045.

If California was a nation last year, its $2.747-trillion economy would have been the fifth largest on the planet, according to the Bureau of Economic Analysis.  The state experienced a five-year boom through 2017 with average annual growth rate of 5.9 percent, almost double the national average of 3.2 percent.

But despite spectacular financial rewards last year to some residents in places like Silicon Valley pushing up GDP, California also won America’s booby-prize for highest poverty rate at 20.4 percent.  Of America’s top 25 major metropolitan areas, Los Angeles holds the crown as America’s Poorest Big City, according to the Census Bureau.

By traditional income levels, California would be close to the 13.4-percent average rate of poverty for the United States.  But poverty spikes to over one in five residents when factoring in the higher cost of living for housing, health care, utilities, and other basics.

Sustainability regulations constrain California housing availability with onerous building codes and impact fees that can add $100,000 per unit in cost.  As a result, average rent is $1,300 a month, about 30 percent higher than the national average.

But Gov. Brown and his allies in the Democrat-majority Legislature financially hammered the state’s middle and lower classes last year by radically inflating taxes, surcharges, and fees levied on gasoline and electricity to fund progressives’ demands for high-speed rail, subsidized electric cars, windmills, and solar farms.

The governor signed Senate Bill 1 in April last year that spiked the tax on gasoline by another $0.12 per gallon to supposedly fix roadway potholes.  But much of the spending has gone to fund hundreds of miles of high-occupancy vehicle lanes, bike paths, and electric-powered busses and light rail to benefit urban neighborhoods.

Combined with existing financial burdens from prior taxes and regulations, Californians are currently paying an average of $3.53 per gallon of gasoline versus $2.47 nationally.  With 17.15 billion gallons of expected consumption in the next 12 months, Californians will pay an extra $18.18 billion, equivalent to $500 for every man, woman, and child.

The governor followed up in September 2017 by signing Senate Bill 100 that mandated that California convert 100 percent of its fossil fuel electrical production to renewable sources by 2045, up from the current 25 percent wind and solar generation.

The move came despite a warning from PG&E that provides electricity and natural gas to 5 million state customers: “If it’s not affordable, it’s not sustainable.”  PG&E added: “We believe customers must be protected from unreasonable rate and bill impacts.”

According to the latest U.S. Energy Information Agency report, California is now ranked as the fifth highest state for residential electric rates at 19.39 cents per kilowatt-hour (KWH).  Alaska, Hawaii, and New England do have higher rates; West Coast residential electric rates are just 11.39 cents KWH for Oregon and only 9.90 for Washington.

California’s tech boom driven by Silicon Valley stock capital gains allowed the state to defy the normal rules of economics that raising taxes kills economic growth.  But Gov. Brown has been warning that after an eight-year expansion, even a “moderate recession” could cause state revenues to plunge by $55 billion over three years.  To put that number in perspective, the annual budget for all state payroll and benefits is only $10 billion.

With Silicon Valley capital gains evaporating as the so-called “FAANG” stocks (Facebook, Apple, Amazon, Netflix, and Google) are down by 15 percent in the last 90 days, the rules of economics might start working with a vengeance and push most Californians into a deep and sustained recession.

 

 

About Stephen Frank

Stephen Frank is the publisher and editor of California Political News and Views. He speaks all over California and appears as a guest on several radio shows each week. He has also served as a guest host on radio talk shows. He is a fulltime political consultant.