The Power of Education in California
John Ellis, president of the California Association of Scholars and a former professor at University of California, Santa Cruz, argues that the state university system in which he taught for nearly four decades helped ruin the state’s economy.
[W]hy is the California legislature so irresponsible, not to say goofy? Well, California is extremely rich in state university campuses: the UC and CSUC systems alone amount to 33 campuses, about a third of them mega-campuses of 30-35 thousand students, with another 10 around 20,000. The mega-campuses completely dominate the Assembly districts they are in, and their large concentrations of students and faculty skew the district electorate not just to the left, but to the devoutly politically correct but hopelessly unrealistic left. Virtually all of them routinely send Democrats to Sacramento. College towns with more modest sized campuses play their part too, but mega-campuses make their districts so one-sided that in the last election UC Berkeley’s Assembly seat had no election even though it was vacant: the Democratic nominee still ran unopposed. Where there is real competition between the parties the two sides keep each other honest and realistic, but when Assembly seats are so inevitably left that there is no contest, there is nothing to stop the side that has automatic electability from sliding into fantasy. Those districts provide the margin that allows an immature leftism that has lost contact with reality to control the state legislature and ruin the business climate of the state.
The irony here really cries out for attention: a large state university system needs a free market economy that hums along in top gear so that the revenue needed to support it can be generated. But California’s two unusually well developed state university systems provide enormous local voting power in many Assembly districts for a bitterly anti-capitalist ideology that sabotages the California economy. The campuses are shooting themselves in the foot. The power that those students and faculty chanted about is indeed theirs, and if they used it to elect sensible assemblymen and state senators their problems would be solved by the healthy business climate that would result. The votes that they actually cast are the source of their troubles.
I claim no expertise in California’s troubles and the polemical style here hurts Ellis’ credibility. But he’s no doubt right that the proliferation of large universities throughout the state creates a powerful lobby to continue funding said large universities. I saw a related phenomena in Alabama, where, thanks to George Wallace, there is a state-run community college within easy driving distance of everyone. And Alabama’s a very small state (4.3 million people) with decidedly lower per capita income than California.
Really, though, while Ellis’ argument is framed around higher education, he’s really complaining about California’s regulatory environment.
In 2007 Raymond Keating formulated a Small Business Survival Index, which is a composite of various aspects of the climate for business in a particular state: business and personal taxes, regulations, mandates, and so on. In that index California ranked 49 among the 50 states. Rhode Island ranked just above California, and its unemployment rate is 12.7. At the bottom of the Index is D.C., and its unemployment rate is 12.1.
In the component parts of the SBSI index, California ranks worst of 51 (including D.C.) on top personal tax rates, worst on top capital gains tax rates, 42 on corporate taxes, 43 on health insurance mandates, 46 on electric utility costs, 47 on workman’s compensation costs, rock bottom again on state gas taxes, 45 on state and local government five year spending trends, and 47 on state and local per capita government spending. It also ranks 49 among the states on the US Economic freedom index, and it has the highest state sales tax rate too: where some states have an income tax but no sales tax, and others have a sales tax but no income tax, California has both, AND it has the highest rates in both.
In short, California is a disaster for business. The state has piled up so many taxes, regulations and mandates that businesses are leaving the state.
What’s especially interesting to me is that they managed to do that despite a nearly crippling popular sovereignty constitution that seems to require a referendum for, well, anything.
I have several readers vastly more familiar with California politics than me, so maybe they’ll share some insights in the comments.
UPDATE (Dave Schuler): A quirk in how this post was created resulted in a problem in entering comments. I’ve corrected the problem and you should be able to comment now.