CA Decline Continues

Demographer Joel Kotkin writes in the Orange County Register to chronicle California’s slo-mo suicide. Key thoughts:

(California) suffers the greatest income inequality in the nation and the third worst economic environment for middle class families. Worse yet — upwards of one-third of the state population subsists near or in poverty.

To buy a median priced house in Atlanta, Dallas-Fort Worth or Houston is between one-half and one-third the cost in the Bay Area or Los Angeles.

High housing costs — you need to earn over $200,000 annually to buy a median priced house in Silicon Valley — may well explain dropping millennial populations in both Los Angeles and San Francisco. On a per capita basis only four states — Michigan, Ohio, Wisconsin and Illinois — fared worse in bringing in new residents.

Consider the impact of the new GOP tax bill; the now greatly reduced write-offs for local taxes in California were worth some $100 billion in 2014. Some believe these changes will drive more high-income earners out of the state.

California gains half its income tax revenues from its top one percent of earners while the top 10 percent of taxpayers supply nearly 80 percent of all personal income tax revenue, up from 70 percent two decades ago.

How could a state pick Puerto Rico as a role model? Paraphrasing the ancient Templar in Indiana Jones III, they chose poorly.