Pick a side: Is California broken, or is the state doing pretty well considering the recession?
California isn't broken, wrote Bill Lockyer, California state treasurer, and Stephen Levy, director of the Center for Continuing Study of the California Economy, in a Dec. 20 Op-Ed. Yes it is, argued several readers over the past week.
In their article, Lockyer and Levy acknowledged that California has serious obstacles that it must overcome, but they also pointed to all of the state’s successes, including:
-- California has never failed to make its bond payments on time and in full, not even during the Depression. And there is no chance we will smudge that pristine record.
-- Our critics say we are addicted to spending. But the numbers show that isn't true. Thirty years ago, general fund expenditures totaled about $7.43 for every $100 of personal income. In the 2009-10 fiscal year, that ratio was almost $2 less, at $5.52 for every $100 of personal income. In the current fiscal year, per capita general fund expenditures will total $2,246, less than the $2,289 spent 10 years ago and roughly equal to the inflation-adjusted level of 15 years ago.
-- And what about the claim that we have a hostile business climate? Companies build new facilities, and move or close other facilities, all the time. If you compile anecdotes and look only at the folks who leave, it is easy to buy the "business is fleeing" mantra. But the Public Policy Institute of California reports that from 1992 to 2006, business relocations to other states accounted for just 1.7% of California's job losses. Nationally, an average of about 2% of job loss in states was due to businesses moving out.
-- California's manufacturing and film sectors supposedly are suffering a job exodus. And it's true that California has seen huge manufacturing job losses — 600,000 jobs, or nearly 33% of the total since 2000, were lost. But the nation overall has not fared any better. And in some traditional manufacturing powerhouses, the job loss has been worse. Massachusetts lost 37% of its manufacturing jobs; North Carolina lost 44% and New York 39%. Meanwhile, California's share of the nation's film industry jobs grew slightly from 2000 to 2010, from 44% to 45%.
-- In 2000, California firms captured 42% of the nation's venture-capital funding. In the second quarter of this year, California's share rose to more than 50% — $3.06 billion of $5.9 billion was invested here. Massachusetts ranked a distant second behind California with $698 million. Texas attracted just $212 million. These numbers show that venture capitalists believe California is still the best place in the nation to find innovative entrepreneurs and productive workers.
After the jump, a rebuttal from our readers.
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-- Alexandra Le Tellier
Photo: Bill Lockyer, treasurer of California, speaks during a panel discussion at the Milken Institute State of the State conference in Los Angeles on Oct. 19. Credit: Armando Arorizo / Bloomberg