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Elon Musk gave California Democratic Governor Gavin Newsom some welcome good news when he announced that Tesla would build its engineering headquarters in Palo Alto, the heart of Silicon Valley.
Newsom, who political analysts expect to be about to run for the Democratic presidential nomination, has been plagued by a string of setbacks (more on that below). Mr. Musk’s partial return to California has helped him project the image Newsom so desperately wants. Newsom is the future of the Democratic Party as California is the future of America.
California was a land of contrasts. That’s because the gold rush used to collect treasures in search of wealth in the hills. Meanwhile, a San Francisco merchant got rich selling expensive shovels.
California’s early opulence is evident in the intricate stone, gilded State Capitol. Today, the people working in that Capitol, down in three years from a peak of 39.6 million and representing the interests of 39 million, are increasingly isolated elites and seen as insignificant. It loosely leads a vast and powerful unelected bureaucracy that does not regard regulate or prohibit.
GAVIN NEWSOM predicted a huge budget deficit for California.The Reality Was Worse, Analysis Finds
The result looks more and more like “Elysium” on Earth, a wealthy enclave of beautiful people surrounded by masses and struggling to survive.
California’s supplemental poverty rate is the highest in the US at 13.2%, meaning 5.1 million people live in poverty in the Golden State.
California has just under 12% of the nation’s population and accounts for 34% of all welfare cases in the United States.
Half of the chronically homeless Americans (117,000 out of 234,000) suffer from mental illness and substance abuse and call California home.
Meanwhile, California’s energy costs skyrocketed under a regime of deliberate shortages designed to cut greenhouse gas emissions. Electricity rates in California are second only to Hawaii. Similarly, its gas prices are among the highest outside of Hawaii, and both elected and non-elected policymakers are pushing for the elimination of internal combustion engines and natural gas-powered appliances, which are For those who cannot afford the extra cost, the impact is significant.
And despite soaring electricity prices, California is diverting funds that would otherwise be spent on basic infrastructure and powerline maintenance to wind, solar and battery projects (many of which are in China), they are increasingly struggling with blackouts.
California and its municipalities have the fifth-highest tax burden in the nation, consuming 13.5% of the state’s economic output. As a share of the state economy, California has about 21% more government than the national average and about 60% more than Texas, and is the state where most immigrants from California emigrate.
Given all the taxes California collects, you might think residents would enjoy great roads and a strong public education system. Slightly better, 40 out of 50.
In addition, due to California’s heavy regulatory burden, residents’ cost of living is the third highest in the nation, behind only Hawaii and Massachusetts.
Since 2001, California has lost more residents to other states than people moving to California. However, due to natural growth and international migration, both legal and illegal, California continued to grow, albeit at a slower pace.
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Still, California’s elite consoled themselves with the fact that (on the net) it was only the working and middle class who had stepped out. California still attracted the rich and smart. However, this stopped being the case about eight years ago. Since 2016, California has also lost high-income residents to other states. And it’s no surprise, given that he has the highest marginal personal income tax rate in the country at 13.3%.
All of this has resulted in a stunning reversal of the state’s literal fortunes, shifting California’s budget from last year’s massive $100 billion surplus to the $22.5 deficit announced by Governor Newsom in January. Did. But now, the California Office of Legal Analysts has delivered the bad news that the projected deficit has increased by another $7 billion.
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Governor Newsom should issue a revised budget in May. This revised budget includes painful cuts and tax increases. If Newsom remains loyal, look out for him as he drums denunciations against the imaginary culprits of state troubles pending the release of his budget.
Hundreds of thousands of Californians try to move out of the state each year, but as we head east across the border, Newsom’s whimsical denunciations may be the last to be heard.
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