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Hawken Cougar
Senior Contributor

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6 Replies
Nebrfarmr
Veteran Advisor

Re: More on Obama's model for the country.....

I always wondered, that if high wages, high taxes, and high government regulation produced prosperity, why California is in such trouble, and places like Alaska don't even have a State income tax.

Hawken Cougar
Senior Contributor

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Nebrfarmr
Veteran Advisor

Re: More on Obama's model for the country.....

You know, I keep hearing that, and I took it at face value, until I got my most recent issue of Popular Mechanics.

They have an article on oil production, and on page 64, they list the top oil producing States.

 

Texas 533 million barrels

Alaska 209 million barrels

California 196 million barrels

North Dakaota 152 million barrels (projected to around 200 million this year)

 

By my calculations, California has 96% of the oil production per year as Alaska does.


Unless they only have a 4% difference in money coming in, which I doubt, because Alaska doesn't even have a State sales tax, the inequity must somehow be on the spending side.

 

Google has moved a big complex to a suburb of Omaha,

Buck Knives has moved from California to Idaho, the list goes on:

 

http://www.ocregister.com/articles/jobs-304774-http-vranich.html

 

 

A snippet from the above link, boldened to make my point:

 

representatives for economic development agencies are visiting companies to dissect our high taxes, extreme regulatory environment and other expenses to show annual savings of between 20% and 40% after an out-of-state move," Vranich says.

 

GoredHusker
Senior Contributor

Re: More on Obama's model for the country.....

The difference being the population of each state.  With a higher population, it's only logical that California would have a lot higher ependitures at the state gov't level.  South Dakota and Wyoming don't have state taxes either because like Alaska they are abundant in resources but lacking in population.  Don't get me wrong, California has done many political things in the past that they are paying dearly for today.  However, I don't think it's really fair to just look at oil between Alaska and California to push all the blame on state gov't spending for their fiasco. 

 

Gray Davis was a disaster for California.  Davis wanted to improve relations with Mexico, and he succeeded.  California has roughly 12% of the nation's population, but unfortunately they host roughly 33% of the nation's welfare recipients.  It's estimated that 20 million illegals live in California costing the state an estimated 10 billion per year.  Had California's relations with Mexico not been so good, maybe just maybe their budget shortfall wouldn't be quite so high. 

 

Here's something to chew on for a while: 

 

Investor’s Business Daily reports: “With the exception of the governor's office, California has been a virtual one-party state since the 1960s. Now, thanks to decades of anti-business policies promulgated by a series of left-leaning legislatures, its economy and finances are a mess, and it's hemorrhaging jobs, businesses and productive entrepreneurs to other states.”

This brings us to the question of whether Californians have seen the light.  Afraid not.  In the recent election, the Republicans picked up a record 680 seats in statehouses nationwide.  California – none.

Re: More on Obama's model for the country.....

One other factor that has to be considered in any conversation over the situation in California is the ease with which any matter can be taken to referendum.  That can effectively  disable a legislature.

 

We are flirting with that up here in MN.  It looks like it's going to be one constitutional ammendment  vote after another.  Passed one on spending on natural resouces and arts funding a few years back and it's a cluster bleep like you've never seen.  The one big condition that it was sold on was that absolutley no funds would be used to back fill existing programs and initiatives and that's almost exclusively what it has been used for. 

Nebrfarmr
Veteran Advisor

Re: More on Obama's model for the country.....

I agree, it is a myriad of factors, but to simply say that Alaska has oil revenues, is a very one-dimensional side of the equation.

While Alaska has a sparse population, they pay zero State income tax, and actually Alaska citizens get money from the State for living there, which means that while California is bleeding money, raising taxes left and right, and STILL not balancing the budget, Alaska, with only 4% more oil production, has zero income tax, and money left over.

Methinks perhaps spending has something to do with  it.

Also, I seriously doubt Alaska has problems with illegal border crossings.

I was just looking to other's perspectives.