Keeping California prosperous

The state has many attractions but its government is floundering

The recent announcement that Campbell Soups was closing its canning facility in Sacramento and Comcast was moving its call center out of California made headlines across the state. To many people, these were further signs of California’s impending economic demise.

But were they? Not really. In fact, California currently leads the nation in creating jobs, 300,000 in the last 12 months. San Francisco added 38,300 jobs, San Jose bulked up by nearly 30,000, San Diego added nearly 29,000 jobs, and Orange County’s payrolls grew by 29,600. This steady growth doesn’t make the front pages, but it’s real and significant.

With all the talk about California’s high taxes and strict regulations, it’s easy to forget what attracts people to the state—pleasant weather, stunning landscapes and a rich and diverse culture, not to mention California’s wealth. And let’s not forget that, despite recent cutbacks, the UC and CSU systems are still churning out hundreds of thousands of young minds prepared to take their places in the innovation society.

Veteran analyst Daniel Weintraub, writing in the California Health Report, offers a case in point: “The Wall Street Journal last month published its annual list of the 50 hottest new companies in America, the start-ups most likely to succeed,” he writes. “An astonishing 37 of those 50 firms are headquartered in California.”

The number in Texas, the state Republican lawmakers invariably hold up as the business-friendly model? One.

As Weintraub notes, however, while the private sector is moving forward, state government is floundering. It needs to get its budget balanced, he writes. “It also needs a simpler and more stable tax system, a reliable way to finance education from kindergarten through the universities, and a health and social safety net that catches people when they fall and then helps them get back on their feet and off government assistance.”

Lacking those, he says, California’s weather, culture and geography may not be sufficient to keep the state prosperous.