Not surprising in the least, and I’m a Californian:
Eleven states made Forbes’ list of danger spots for investors including California, New York, Illinois, and Ohio. They warned (and with the cliff it is even more critical), if you have muni bonds in these states – clean up your portfolio; if your career takes you there – rent, don’t buy! Two factors determine their list of ‘fiscal hellholes’. The first is whether there are more takers (someone who draws money from the government) than makers (the gainfully employed). The second is a state credit-worthiness score (via Conning) based on large debts, uncompetitive business climates, weak home prices, and bad trends in employment. Conning rates North Dakota the safest state to lend money to, Connecticut the most hazardous. A state qualifies for the Forbes’ death spiral list if its taker/maker ratio exceeds 1.0 and it resides in the bottom half of Conning’s ranking. See below for the 11 states to avoid…no matter what Bob Toll, Larry Yun, Bob Pisani, or Alexandra Lebenthal tells you..
The report goes on to detail how these eleven states have more residents who get money from the government rather then from the public sector.
This means that roughly one-third of Americans live in states where more people receive tax dollars than pay taxes on non-government income.
And Victor Davis Hanson writes about California, probably the worst of the worst:
Meanwhile, business surveys perennially rank California among the most hostile states to private enterprise, largely because of overregulation, stifling coastal zoning laws, inflated housing costs, and high tax rates. Environmental extremism has cost the state dearly: oil production has plunged 45 percent over the last 25 years, even though California’s Monterey Shale formation has an estimated 15.4 billion barrels of recoverable oil, according to the U.S. Energy Information Administration.
…Between the mid-1980s and 2005, the state’s aggregate population increased by 10 million Californians, including immigrants. But that isn’t the good economic news that you might think. For one thing, 7 million of the new Californians were low-income Medicaid recipients. Further, as economist Arthur Laffer recently noted in Investor’s Business Daily, between 1992 and 2008, the number of tax-paying Californians entering California was smaller than the number leaving—3.5 million versus 4.4 million, for a net loss of 869,000 tax filers. Those who left were wealthier than those who arrived, with average adjusted gross incomes of $44,700, versus $38,600. Losing those 869,000 filers cost California $44 billion in tax revenue over two decades, Laffer calculated.
Worst of all is that neither the legislature nor the governor has offered a serious plan to address any of these problems. Soaring public-employee costs, unfunded pensions, foundering schools, millions of illegal aliens, regulations that prevent wealth creation, an onerous tax code: the story of all the ways in which today’s Californians have squandered a rich natural and human inheritance is infuriating.
California State Controller John Chiang has announced that total state revenue for the month of November 2012 fell $806.8 million, or 10.8%, below budget.
Democrats thought they could hammer “the rich” by convincing voters to pass Proposition 30 to create the highest state income tax in the nation. But it now appears that high income earners have already “voted with their feet” by moving themselves and their businesses out of state, resulting in over $1 billion shortfall in corporate and income taxes last month and the beginning of a new financial crisis.
And what do the liberals want to do at the federal level? Raise taxes. This will solve all our problems.
Give me a break.