California doing great. Why is that?
They raised taxes on wealthy and hiked minimum wage
A few years ago California was called a failed state that was collapsing under a burden of too much spending. Mitt Romney compared California to bankrupt Greece. Texas Governor Rick Perry said it was anti-business. And Fox News mocked the state non-stop.
But now the state has a $4.6 billion surplus. It has led the nation in job creation and has a minimum wage of $10 an hour. There are still big problems but the California turnaround does prove some things. First, raising taxes does not kill job creation, but it does annoy job creators. At Governor Brown’s urging, voters in 2012 approved, by a healthy margin, a plan to raise taxes on the high end. This new money is the biggest reason why the state went from a $25 billion budget deficit to a projected surplus of almost $5 billion. And instead of building more prisons, California has restored the funding flow to its once-vaunted public university system.
Read more of Timothy Eagan’s article, “Jerry Brown’s Revenge,” in The New York Times. The California experience provides a helpful blueprint for other states and municipalities going forward.