In January, California governor Jerry Brown, responding to one of the worst droughts in the state’s history, declared a state of emergency. The state legislature, though, didn’t get around to passing an emergency drought-relief bill until the end of February. But California’s lower house, the state assembly, did find time to pass a bill in January sponsored by Assemblyman Rob Bonta, an Alameda Democrat, directing the Department of Corrections to provide condoms to prison inmates. A virtually identical bill passed the state senate last year, which Brown vetoed. The governor apparently thought it logically perverse to provide free condoms to inmates when sex between prisoners remains a felony under state law.
Bonta’s efforts are characteristic of today’s hyperactive California legislature, which has developed a bad habit of passing laws (and lots of them) that ignore the state’s crises and sometimes make them worse—or even cause problems in the first place. Other early 2014 legislation was just as ridiculous as Bonta’s bill. With no rain in sight, and a state economy struggling with high unemployment and entrenched poverty, lawmakers passed one measure that required chefs and bartenders to wear gloves and another that regulated the appearance of toy guns. State Senator Mark Leno and Assemblywoman Nancy Skinner, Democrats both, are coauthoring a bill to demand mandatory “kill switches” on all smartphones sold in the state.
Last year, as public pension costs continued to grow, putting increased pressure on California localities, legislators seemed more interested in passing a bill—eventually signed by Brown—that allowed self-identified transgendered students in public schools to choose which bathroom they prefer to use. Brown also put his signature on laws allowing nurse practitioners, physician assistants, and midwives to terminate first-trimester pregnancies; making it illegal for homeowners confronting mountain lions in their backyards to shoot the ferocious animals; and saying that kids can legally have more than two parents. And that’s just a few of many questionable new measures.
California’s legislature wasn’t always so loopy—in fact, a few decades back, many considered it one of the most professional and forward-looking lawmaking bodies in the nation. Its decline has been a principal cause of the problems besetting the Golden State.
California lawmakers once worked hard to attract business and encourage development. Throughout the 1960s, the legislature—a politically diverse bicameral system of 40 upper-house senators and 80 lower-house assembly members—pursued a pro-growth agenda, building a vast new infrastructure for a rapidly growing state (it became America’s most populous in 1963) and ensuring inexpensive but high-quality primary and secondary education for millions. Partnering with flexible governors such as Democrat Edmund G. “Pat” Brown and Republican Ronald Reagan, state lawmakers managed to do this while also fostering a first-class public workforce, balancing budgets, and keeping taxes moderate. New industries—from the wineries of Napa Valley to the high-tech innovators of Silicon Valley—expanded ex nihilo into global prominence. The legislature was widely viewed as one of America’s most serious political bodies.
If the state’s good governance, however, had created unmatched prosperity, its success also misled a majority of Californians into thinking that their newfound bounty was a birthright rather than the dividend of a rare partnership between gifted leaders in private industry and skilled public servants. Even as the state grew, energized by eager new immigrants, it shorted the very investments that had once made it great—a complex system of water storage and transference, a model freeway system, a blue-chip tripartite educational system, and encouragement of the oil, natural-gas, timber, and hydroelectric industries—and began to impose regulations and higher taxes on the private sector. The thinking was that wealth was now so assured that Californians needed no longer to create it. So a flurry of regulations and higher taxes followed, designed to consume and redistribute prior riches, while nurturing the dream of a return to a preindustrial paradise—as if nature alone, not California’s visionaries, had made the state so livable and affluent.
By the 1970s, the state legislature reflected California’s new collective mentality and thus became increasingly dominated by the Democratic Party. For most of that time, no credible opposition existed to check ideological excess. Indulgence became more rule than exception—and that certainly remains the case today. Busy enacting countless new laws—some 800 passed in 2013 and took effect this year—the liberal legislature has lost sight of at least one fundamental law: that of supply and demand. Lawmakers seem determined to do permanent harm to the Golden State economy. California’s unemployment rate is currently the fifth-highest in the United States—hovering around 8.5 percent, versus 7 percent nationally—but in September 2013, Governor Brown signed legislation that will eventually make its minimum wage one of the nation’s highest. It will rise incrementally to $10 an hour by January 2016. The measure’s backers didn’t explain how employers would suddenly decide to hire more workers at higher wages.
Geologists believe that California’s vast Monterey Shale formation may contain as much as 15 billion barrels of recoverable oil and could create nearly 2 million new jobs. Almost anywhere else, such bounty would be considered a godsend; in California, the legislature views it as an opportunity to take a public stand against carbon fuels. The state produces only one-sixth of the natural gas it consumes and less than 40 percent of its gasoline (it purchases the most gasoline in the nation). Yet in 2014, the legislature made hydraulic fracturing—or fracking—far more difficult to undertake.
In 2012, Democratic supermajorities in the state senate and the assembly—and, to be fair, a majority of voters—approved a sales-tax increase along with a steep hike in the income tax on top earners, giving California the highest aggregate tax rates in the nation at precisely the moment that federal income-tax and capital-gains-tax cuts expired. California now draws about half of its revenue from income taxes—and half of that money comes from roughly 150,000 top earners. Each top-bracket Californian pays the equivalent in taxes of 250 other state residents combined. The loss of even a few hundred of these taxpayers to other states each year can drastically affect the state budget.
In California, it has become a truism that the more the legislature raises a tax, the more likely that the service for which the tax is levied will get worse. Californians pay the highest gasoline taxes in the nation, for instance, yet the state’s roads and highways, which that tax is supposed to pay for, usually rate among the worst—47th in a recent Reason Foundation survey. In 2007, the Federal Highway Administration rated only 28 percent of California highways in “good” condition. The legislature allowed the state’s ancient coastal and inland highways—the 101 and the 99—to deteriorate for 30 years before winning voter approval for a $19.9 billion highway bond in 2006 to finance deferred maintenance and some new capacity along those vital routes and others. It is now pushing high-speed rail, a multibillion-dollar boondoggle, the first leg of which, currently tied up in court, will carry few passengers between Fresno and little-visited Corcoran.
California’s budget is heavily weighed down by its out-of-control pension system (see “The Pension Fund That Ate California,” Winter 2013). Unfunded pension liabilities now top $154 billion, according to official state estimates—and some independent analyses put the liability as high as $500 billion. The combination of politically powerful public-employee unions, nearly 60,000 government workers making more than $100,000 per year, and lavish retirements based on such high compensation, have nearly bankrupted the state. Yet reform is difficult when the public-employee unions are among the largest contributors to Democrats in the legislature.
Just how many Californians are leaving the state remains hard to know, given the difficulty of obtaining accurate (and often embarrassing) data. But some estimates put the exodus at nearly a quarter-million a year, or roughly 5,000 people a week. These fed-up expatriates usually cite California’s high taxes, poor state services and infrastructure, and higher-than-average unemployment rate, among other problems. Many are headed for low- or no-income tax states of the South and Southwest, such as Arizona, Nevada, Texas, Utah, and Florida. In terms of demography, the people most opposed to the Democratic-controlled California legislature’s policies are leaving.
Its mishandling of California’s complex water politics exemplifies the legislature’s fecklessness and political hypocrisy. As the state’s population surged throughout the twentieth century, newcomers brought with them an insatiable demand for water—setting up a fateful and recurring conflict between California’s inland farmers and its coastal environmentalists (see “California’s Water Wars,” Summer 2011).
The precarious political balance between California’s wet and dry regions was—and is—highly susceptible to drought. Last year was the driest on record. If drought conditions persist in the Sierra Nevada Mountains and in the agriculturally rich western end of the Central Valley, there will be little, if any, contracted canal-water deliveries available for farmers in 2014—a historic first. Westside farmers are gambling by drilling deeper wells in hopes that such expensive pumping of brackish water from a shrinking aquifer might at least save a percentage of their planted acreage. With the drought cutting further into water deliveries, older nut orchards are already being uprooted and row cropland idled. More than 200,000 acres will immediately go out of production.
Far more irrigated acreage will be destroyed if the drought persists and state and federal environmental policies don’t change. Though the legislature agreed to fund more water-storage and recycling efforts, lawmakers continue to allow controversial water releases from near-dry reservoirs aimed at promoting salmon runs in the San Joaquin River. The five-year-long diversion of contracted northern California irrigation water into the San Francisco Bay Delta continues as well, on the unproved theory that such infusions might improve the habitat of the supposedly declining population of delta smelt, a short-lived three-inch fish. Even in a state of emergency, Governor Brown has not halted the irrigation-water diversions.
Oddly, Hetch Hetchy reservoir in the Sierra Nevada Mountains, which discharges freshwater into huge aqueducts to provide distant San Francisco’s residential water use, has never had any of its flows diverted to the San Joaquin River (which the aqueducts cross) to foster salmon runs or save delta baitfish. Apparently, only farmers, not Bay Area residents whose representatives vote to restore fish populations, are to do without contracted water. In fact, growers believe that in total, over 4 million acre-feet—enough to supply more than 4 million families with their water needs or irrigate over 1 million acres of farmland—have been annually diverted from contracted irrigation.
Nowhere has the state legislature done more damage than in its response to illegal immigration, which has wrought havoc with the state’s finances and politics. To the degree that legislators discuss illegal immigration, it is either to facilitate the arrival of Mexican and Latin American nationals or to make illegal aliens exempt from any laws predicated on being an American citizen. California has the largest number of illegal aliens in the nation; yet the legislature saw fit to extend driver’s licenses to them while making it more difficult for state authorities to transfer arrestees to federal immigration authorities. Stranger still, the legislature passed a bill allowing illegals to practice law in California. Such steps won’t reduce the number of illegals, needless to say.
The problem is not just that California hosts four in ten of the country’s estimated 11 million illegal aliens. Rather, it’s that Spanish-speaking immigrants, largely without high school diplomas, have arrived in numbers large enough to discourage assimilation in a multicultural climate of their hosts, who no longer embrace the ideal of the melting pot. The result is a growing underclass, whose presence is evident in an array of state statistics, from soaring penal-system costs to dismal school test scores.
Half of all students enrolled in the state’s public schools are Latino, many of them children of illegal immigrants. Forty percent of California’s primary school students do not speak English as their first language—a fact rarely mentioned, yet critical for understanding the precipitous drop in school outcomes over the last few decades. The Los Angeles Unified School District faces minority dropout rates approaching 60 percent. California public school students test near the bottom nationally in math and science. The state’s four-year high school graduation rate is 32nd among 53 states, territories, and the District of Columbia. Well over half of incoming freshmen to the California State University system require remediation in math and science. Instead of addressing the calamitous effects that illegal immigration has had on public education, the legislature would rather blame the 35-year-old Proposition 13, which limited state property taxes, for reducing the revenue available to schools.
Massive illegal immigration has done more than damage California’s public schools. Illegals, counted in census tallies, have helped give California the highest poverty rate in the nation—nearly 24 percent. And the fact that American-born children of illegals are entitled to welfare benefits probably helps explain why California is now home to one in three of the nation’s welfare recipients. The cost of Medi-Cal and other social services for the indigent has skyrocketed, draining money from the state budget for, among other things, infrastructure spending. Yet the California legislature either apparently sees no connection between these crises and illegal immigration or finds recognition of such cause and effect politically dangerous.
This year, Latinos will surpass non-Hispanic whites as the state’s largest racial or ethnic group. About 39 percent of the state’s residents are of Latino heritage. What the implications of that oft-cited statistic are no one quite knows, given increasing rates of intermarriage and integration in the second and third generations. But the influx of millions of indigent foreign nationals into California has transformed the statistical profile of “Latinos” and served as justification for state-mandated affirmative-action adjustments for those having little in common with the impoverished new arrivals from central Mexico. If it is politically incorrect to tie massive illegal immigration to the soaring costs of education, law enforcement, health, and welfare systems, it is absolutely forbidden to suggest that the state’s middle- and upper-middle-class Latino population—many with third- and fourth-generation roots in the state—benefit from diversity and affirmative-action programs, regardless of their own class, income level, education, or exact ancestry.
What explains the legislature’s transformation into the dysfunctional body it is today? Some argue that California’s population is now so vast that it is almost impossible for state legislators to gain adequate knowledge about the people and landscapes they ostensibly serve. There is some truth to this. In the 1960s, the 40 state senators on average represented one-third of a million constituents; today, each senatorial district on average is home to 1 million residents. More important, legislative districts have been so gerrymandered that Sacramento is now more or less assured a permanent liberal Democratic majority and an increasingly powerless Republican minority. Not a single seat in the senate, assembly, and congressional races changed party hands in California’s 2004 election. In the 2012 general election, just three of 34 incumbent Democrats lost their races—to other Democrats, thanks to the state’s new top-two primary system.
Term limits—amended in 2012 to allow 12 consecutive years of service in either the assembly or senate—may also partially be to blame. Sacramento has few experienced legislators. Most lawmakers spend their brief time in office planning for their post officia careers, either by courting lobbyists, making deals with the governor to secure lucrative sinecures as administrative grandees on well-paid state commissions and boards, or eyeing another elective office. Corruption is a problem, too. Currently, Democratic state senator Roderick Wright is on paid leave—rather than being expelled—from the legislature after being convicted by a Los Angeles jury of eight felonies related to campaign fraud. Democratic state senator Rod Calderon also went on paid leave to face more than 20 felony counts of bribery, money laundering, and fraud. The most recent example is also the most shocking: Democratic state senator and gun-control advocate Leland Yee was indicted in March for conspiring to commit wire fraud and traffic weapons.
But a more far-reaching explanation for the legislature’s behavior is that the state became both fabulously wealthy—California is home to more billionaires than any other state—and very poor. Those in between are either marginalized politically or, as we’ve seen, moving out. California today is largely a cartographical abstraction. Two profoundly different cultures and landscapes have evolved over the last half-century and now seem arbitrarily lumped together.
An overclass—much of it living in the state’s most heavily populated corridor, within 50 miles of the coast from Berkeley to San Diego—is doing quite well economically, despite the state legislature’s incompetence and job-shrinking policies. Globalization and California’s 600-mile window on the rising Asian nations across the Pacific have allowed Menlo Park and San Diego to develop stronger ties with the Chinese and Japanese economies than with Stockton or Tulare—just three hours away, in the state’s interior. Many of California’s most affluent residents, at least so far, tend to shrug off high taxes, viewing income redistribution through taxation as a sort of psychological penance for their super-wealth. Residents of La Jolla, Santa Monica, and Palo Alto can afford the private schools that are sprouting up in the manner of Southern academies following the court-ordered forced busing of the 1970s. They seek class homogeneity in their gated enclaves, and they don’t worry about the high power bills of the poor residing in the frequently sweltering interior—much less the effect of illegal immigration on medical and social services in that region. They care far more about the environment and gay marriage and other progressive causes than about mundane concerns such as fuel and farm exports and middle-class jobs. They form a cash-laden constituency with enormous pull in the state legislature.
The majority of California’s vast farming acreage and the state’s oil, timber, and water resources are found in the less populous southern and central interiors and in the Sierra foothills. The farms and firms that produce or extract food, lumber, minerals, and fuel are regulated and taxed by legislators who either do not know of the sources of their state’s vast natural wealth or, if they do, assume that these natural riches appear spontaneously. Ironically, many of the predominantly Hispanic poor who live in these parts of the state support logging and fracking and natural-gas power plants, which might lower their electricity bills—currently the highest in the country. Yet the legislative districts representing these areas tend to vote not for candidates with pro-growth views but for liberal-left politicians who mirror the values—and support the agendas—of coastal elites’ ultraprogressive social and environmental agendas.
At first glance, this alliance seems completely at odds with the pocketbook interests of non-coastal workers. But the coastal overclass makes an unspoken political bargain with the representatives of the Hispanic poor: in return for Hispanic support for green legislation, more gun control, or transgendered restrooms, coastal liberals will push de facto state amnesties, the Dream Act, higher taxes on small businesses and the upper middle class, expanded government, and more social services. The poor of my Central Valley town, Selma ($16,000 per-capita income and 15 percent unemployment), might want fracking jobs—but not enough to vote for a Republican who would support, say, trimming Medicaid or reducing benefits to illegals. The aspirational, work-oriented middle class winds up politically orphaned and without a voice in Sacramento.
Bringing sanity back to the California legislature appears hopeless under present conditions—but some of those conditions could change soon.
If the drought persists, water rationing won’t be far behind, and well-heeled residents of the mostly waterless California coast will be forced to choose between their green obsessions and practical policy fixes. The drought would also slash state revenues by idling hundreds of thousands of acres of farmland, while causing the price of fresh fruits and vegetables to spike. That development alone would turn public attention to the several million acre-feet that Bay Area and Los Angeles legislators have squandered by privileging fish over people. Alternatively, if Southern California Edison or Pacific Gas and Electric hike their rates much more, popular demand will likely grow for tapping the state’s vast natural-gas reservoirs. Any outbreak of populism from the California interior would disrupt the fragile elite-poor coalition, especially if impoverished Californians sense that the wealthy are pushing self-serving policies, while quietly separating themselves from the poor, whom they champion in public but avoid in their private lives.
A substantial reduction in illegal immigration could, over time, spur a change of political attitudes among California’s Hispanics, which in turn could shape the future course of the legislature. Without massive influxes of poor Mexican and Latin American nationals, the natural forces of assimilation, integration, and intermarriage would in two generations transform California’s Latino community. With fewer illegal immigrants, a growing Latino middle class would gradually begin to see itself as more diverse and less politically predictable—as individuals defining themselves more in terms of economic interests than of tribal solidarity. Take away the illegal-immigration issue, and most Latinos in central California are more interested in expanding employment in agriculture, logging, gas and oil, and construction than they are in regulating bartenders’ gloves and toy guns. Hispanic support for progressives could dry up if Sacramento’s high-tax, big-government policies wind up smothering economic opportunity for middle-class Latinos.
A 2013 Hoover Institution–sponsored Golden State poll of 1,000 state residents offers some hope that Californians are tiring of the legislature’s neglect of existential crises in favor of pet issues. Only one in seven Californians polled was “very confident” about affording higher taxes. And a majority cited shoring up the economy, expanding jobs, and balancing the state budget as the government’s key priorities. The least important issues? Global warming, gun control, and high-speed rail. Further, a 2014 Golden State poll suggested that the legislature’s core constituencies—youth, Latinos, and liberals—are growing unhappy with the agendas of their favored legislators. For example, 76 percent of young Californians (aged 18 to 29), as well as 81 percent of Latinos and 79 percent of those identified as Democrats felt that they were now either worse off or no better off financially than in the past. Asians, a strong Democratic constituency and currently overrepresented at elite California campuses, grew irate at the legislature’s plan to put a referendum on the ballot to bring back racial preferences in college admissions and hiring.
In sum, the now-dysfunctional California legislature grew out of a destructive political alliance between the state’s poor interior and its rich coastal corridor, while the once-robust middle class either fled or declined into irrelevance. The odd power-coupling will end only when coastal elites begin to suffer the consequences of their progressive utopianism, or when the border closes and Latinos become politically indistinguishable from other Americans tired of subsidizing the pipe dreams of the rich and a welfare state that institutionalizes poverty. In other words, California’s hope lies in a middle-class resurgence.
