Learning From California: Policy Lessons From Golden State Exodus

[00:00:00] Joe Selvaggi: This is Hubwonk. I’m Joe Selvaggi.

[00:00:09] Welcome to Hubwonk, a podcast of Pioneer Institute, a think tank in Boston. If we view the 50 states as laboratories for policy experimentation, California stands out as the largest and one of the most progressive, boasting the highest top marginal income tax in the nation and an economy larger than India’s.

[00:00:27] California possesses the potential to transform its natural beauty, and favorable climate into an American utopia, something Massachusetts lawmakers can only dream of. Yet despite its vast resources and wealth, California is experiencing an unprecedented resident outflow, marking a dramatic reversal for a state once seen as a destination for those seeking freedom and opportunity.

[00:00:49] What has caused this shift, turning California from a land of promise into one that many of its own residents now find unlivable? And more importantly, What lessons can Massachusetts legislators learn from California’s experience? As our state pursues progressive policies and economic growth, it’s crucial to understand how we might avoid the same consequences and prevent the loss of valuable residents to more competitive regions.

[00:01:13] Joining me today is Tim Anaya, Vice President of the Pacific Research Institute and co-author of the California Left Coast Survivors Guide. With 25 years of experience, including nearly two decades in the California state capitol, Tim Mr. Anaya has served as Senior Advisor to nine Assembly leaders, including former U. S. House Speaker Kevin McCarthy, and as a speechwriter for former California Governor Arnold Schwarzenegger. He will share insights on how, despite its natural advantages, California’s policy choices have led to an expensive, Dangerous and restrictive quality of life, pushing hundreds of thousands of residents to seek a better future elsewhere.

[00:01:50] We will discuss the challenges and opportunities shared by California and Massachusetts, examining how our policy makers can learn from California’s missteps and avoid the unintended consequences that come with them. When I return, I’ll be joined by Tim Anaya of the Pacific Research Institute.

[00:02:18] Okay, we’re back. This is Hubwonk. I’m Joe Selvaggi, and I’m now pleased to be joined by the author of the California Left Coast Survival Guide, Tim Anaya. Welcome to Hubwonk, Tim.

[00:02:29] Tim Anaya: Great to be here, Joe. Thanks for having me.

[00:02:31] Joe Selvaggi: Well, I’m thrilled to have you because I really did enjoy reading your book because it deals with serious policy issues, but it does it in a lighthearted satirical format.

[00:02:41] It’s a survival guide for someone, let’s say, coming from Massachusetts who might be visiting California to sort of get us familiar with some of the policy choices California’s made. I want to dive into all the interesting features that’s very richly footnoted and lots of good detail in it. But before we get into your book, tell us more if you’re a member of the Pacific Research Institute. What is this? It’s a fellow think tank. What is it and what’s your role in the organization?

[00:03:06] Tim Anaya: Sure thing. Well, PRI has been around since 1979. We’re celebrating our 45th anniversary this year. We’re founded in San Francisco as a California free market think tank. So, we put out books, studies, research, media commentaries, put on events.

[00:03:24] on every issue you could think of, both in California and nationally. And so, in kind of thinking of this project, certainly, and how our work really fleshes this out, we like to say we’ve had a 45-year front seat to a lot of bad policymaking, especially here in Sacramento, where I’m at. And so, there really is no one else that we saw doing the kind of level and sophistication of this analysis.

[00:03:52] And so, being a think tank, right, our goal, obviously, is to educate. And to hopefully change hearts and minds and inspire people to go down a freer, more entrepreneurial based policy path. That’s where we came up with the idea, and especially this year, right? With having a Californian at the top of the ticket and our governor going out there talking about the California way quite a bit. We thought, now is the time to put together a book like this.

[00:04:21] Joe Selvaggi: I’m glad you mentioned this. I just want to stipulate for listeners who are not familiar with how books are written. And it takes a long time until it hits the shelf, so this was, in a sense, a desire to either bash a particular political figure, such as, one of our two presidential candidates happens to be someone from California, Kamala Harris, Vice President Kamala Harris, she’s coming from California, but this wasn’t designed to, you know, to target her or her party but rather this is saying look folks this is how we do things in California and if you’ve come from California you think like a Californian this is what makes sense to you if you come from here. Is that fair?

[00:04:58] Tim Anaya: Yeah, I would say actually she probably might be the best book salesman for my book rather than writing this to bash her per se. I think the premise of the book is we see and People from outside California may have seen, and more recently, as he’s been traveling the country, our governor, Gavin Newsom, talking about the policy successes that he calls of his administration, and he kind of lumps that together and calls it the California way.

[00:05:26] And so, it struck us that the ideas that are emanating from California, And the L. A. Times did a better job than I could ever do in describing this. They called California the de facto think tank of the Biden Harris administration. And so we see from soup to nuts basically on all the different policy issues, whether it’s crime, green mandates, taxes and spending, homelessness, housing, you name it, education.

[00:05:56] These ideas. are creeping over the Sierra Nevadas and they’re coming to your city councils, they’re coming to your state legislatures, they’re coming to the federal government. So, it struck us that, well really, regardless of who the elected official is implementing them, these ideas are coming forward and living in what we think of as a policy wilderness.

[00:06:19] Well, what better way to educate people across the country on what’s coming, what are the real-world impacts of those, some from our analysis, some from government data. As you mentioned, we have dozens of pages of sources, so you can really dive into our different studies and the data if you want to more, but also in an entertaining way, really spread the message of here’s what’s coming, here’s what you can experience.

[00:06:46] It is humorous in the book. But it’s not humorous when you have to deal with the brunt of these policies in real life that are hurting people’s freedom and quality of life, denying entrepreneurial opportunities, things like that. So, I would say, any politician who may be referenced in the book or thought of in context of the book, Really, it’s more, these are 45 years of bad ideas enacted by many different politicians. Those politicians you may think of, really, they’re my de facto salespeople for our book.

[00:07:22] Joe Selvaggi: Fair enough. All right, so let’s, I want to start almost at the back of the book where you talk about Ultimately, the effect, how people react to all these ideas, there are a lot of differences between California and Massachusetts, God knows, but we were notorious Massachusetts and California for having a common infatuation with what I’ll call more progressive policy ideas.

[00:07:42] So I don’t want to go down the road of making normative claims or progressive ideas better than more free market ideas. Rather, I just say, let’s get to the end and say, the effect of these policies on the citizens is such that we can say they’re either bad or good, but the effect has been, both for Massachusetts and California, we have a common problem.

[00:08:01] People are packing up and leaving. I will say, I love Boston, I love Massachusetts, it’s a wonderful place. For people to leave in the droves that they are, something must be a little bit wrong. California, I think, is experiencing an even worse situation. We’ve both, in the last census, lost a congressional seat, which means we’re getting smaller relative to the rest of the country. Tell us, take us through, let’s start at the back of the book, which is saying people are leaving. Who’s leaving and how many people are leaving?

[00:08:28] Tim Anaya: So, we saw, starting in 2019, right, remember in every census we’ve seen, right, California is always growing by leaps and bounds, historically gaining congressional seats.

[00:08:39] Well, in 2019, for the first time, we saw 170, 000 net people leave California. And this trend continued for three years, and in 2022, that had grown to 300, 000 net people leaving the state. It, the recent numbers, and we don’t have really good numbers, that, that’s the best, most recent number we have. It’s a little more flat, but what does that mean?

[00:09:05] That means, 1.6 percent of state tax revenue leaving. That’s money that you need to fund the priorities of our state. And so, when you think about it, it really is the ultimate of what we talk about when we talk about the California way. So when you add in all of these issues, primarily affecting certainly costs and our quality of life.

[00:09:27] We did a study on migrating. It’s an issue that, that we do a lot of work on here at PRI and our Wayne Weingarten and my co-author, Kerry Jackson, did a study called California migrating a couple of years ago and they looked at this and they calculated there is something called a California premium. So, in other words, we make those who live here, make 13.7 percent more living in California than you would if you lived in another state. But when you factor in taxes and our certainly high mortgage costs, well, that turns into a 19. 6 percent deficit. So, when you think of that, you’re not making as much net, and then you have all the other issues of living here.

[00:10:11] It’s no wonder people are leaving. It’s no wonder U Haul is going to give us an award for all the business that we give them. We also did another survey, and it’s very interesting when you talk about businesses, because when you think about migrating, you often think a lot about these big corporations, small to medium sized businesses that are leaving California.

[00:10:31] So, we did a survey a few years back of business executives in the desired industries, right, green industries, and we asked them, well, why aren’t you either locating some or all of your operations in California? And of course, they said taxes and regulation were a big thing. But the biggest thing for them were quality of life issues.

[00:10:51] It was, we want to make sure that our employees have good schools for their kids. It wasn’t for them for a trained workforce. It was a recruiting and retention thing for their employees. Same with housing. It’s not that we get a good deal on a house, it’s that our employees can afford to live there. Now, when you ask who’s leaving, that’s the sad thing.

[00:11:12] It’s everybody across the board. So, it’s not, yes, we think it’s the wealthy leaving. It’s everybody leaving. So, it’s the brain drain is leaving, the younger leaving, those who you think might be sticking it out. The young are leaving, middle aged are leaving, the wealthy are leaving too. So, it’s really not a sustainable model, and so it’s my hope that even California policymakers read our book to learn something’s going wrong here, maybe we should do something a little different to stem this negative tide.

[00:11:43] Joe Selvaggi: Wonderful. Well, I’m glad you mentioned quality of life because I think there’s a lot of hand waving. When we talk about high taxes here in Massachusetts, they say, well, there’s high taxes everywhere, whatever. And people aren’t motivated by money or by taxes. You point out the fact it’s very, you can make more in California, but of course you pay more in California.

[00:11:57] But I want to drill down into what you mentioned is Quality of life. People don’t leave just because of taxes. I will concede that. I will say that there’s a lot more to life than just taxes. I also say you pointed out some impressive statistics in preparing for the show. It even amazes me how big California is.

[00:12:11] It’s a huge economy. It’s GDP is larger than the UK. It’s larger than India that has 1. 4 billion people. It’s one seventh of the U. S. population. California matters. It’s huge. 40 million people, 39 million people. When you talk about the changes that are going on across the street that are encouraging the best and brightest to pack up and vote with their feet, leaving behind your sunshine, your beaches, your wonderful economy, your book starts with something we hear a lot about in the, in the national news, which is the scourge of crime, that there, there’s so much going on.

[00:12:43] I’ll say Massachusetts is a fairly safe place. We, we can walk our streets. It’s, it’s, we don’t, 99 percent of the places don’t worry about crime. But in California, there seems to be a rash of crime. It’s certainly not something in the water. It has to be something to do with the policy choices they’re making. What’s going on with crime in California?

[00:13:02] Tim Anaya: So, we had the, California was always known as a tough on crime state in the 1990s and 2000s, and both elected officials and voters put in place. What you would consider pretty tough on crime policies. And then we certainly ran into prison overcrowding problems and also budget issues.

[00:13:20] So by the early 2010s, the 2010s kind of kicked off a decade of sweeping criminal justice policy changes. And what can best be our Steve Smith, who’s our crime fellow, describes it as it’s a movement to decarcerate and decriminalize. And what it’s resulted in is. Mass victimization of Californians. And so, you start with AB 109, which was an effort to reduce prison overcrowding, and it was also a budget savings issue, theoretically, to deal with a real terrible budget deficit we had to deal with at the time.

[00:13:58] And what it did is it shifted thousands of serious and repeat felons from state prison to local jails. And local jails, they didn’t have the money or the manpower to handle this mass influx. And so, because of this shift You had a lot of people being granted de facto early release, or you’re on home house arrest, well we don’t have the manpower to monitor that.

[00:14:23] Then you had issues like Prop 47, which was a voter approved measure that reduced the penalties for a whole bunch of issues. That, I would argue, has spurred the issues we’re facing with retail theft. Car break-ins, out of control homelessness, and all of that, and we can get into that in more detail in a little bit.

[00:14:45] Prop 57, those who were arrested and doing time with the former tough sentencing laws, they were able to be re sentenced at a lower level, and so you got a lot of people basically let out of prison at that time. People who, most reasonable people would agree, these are people who should not be, so you have all of these issues collectively, and yes, they were done in the name of budget savings, but we haven’t seen any savings to the Department of Correction’s budget, ironically, since then.

[00:15:18] And when you ask, why should we care about it in another state? What are we seeing? Well, again, these sweeping policy changes are going nationwide. So, when you talk about zero cash bail, talk about this effort to restrict life without parole sentences, so 16- and 17-year-olds, even though they might deserve the sentence, are not granted such a, all these laws around, when you see what prosecutors are doing, not prosecuting cases, as is a lot of the case in San Francisco and Los Angeles.

[00:15:51] You’re seeing district attorneys around the country; you’re seeing state and federal policymakers look to what’s going on in California and they’re emulating a lot of these policies.

[00:16:03] Joe Selvaggi: Yes, your book has a few, I would say, hair curling stories about what happens with some of these criminals who are let out early. Of course, again, our podcasts on crime have covered the fact that crime doesn’t happen everywhere by everyone. It’s very concentrated in certain areas by certain people. Letting those people out has, as a result, we’ve read here in Massachusetts that retail places in some of the denser urban places are closing.

[00:16:26] Crime is high. Essentially, the people who are victims of crime are often the people who are most vulnerable in society. What have you seen, or where are the results most evident in California? Is it broad sweeping? Are Hollywood and Beverly Hills being affected by this? Is it the least fortunate, the least able to resist this? The consequences of crime predation on them, are they the ones suffering?

[00:16:49] Tim Anaya: Yeah, I think you’re seeing it, it’s certainly more pronounced in urban and suburban areas, but you’re seeing it in some way across the state. So, let’s take retail theft for example. So, you’ve all seen the headlines, right, of San Francisco, of CVSs are closing in droves, or they’re putting virtually the entire store behind locked cases.

[00:17:13] We had an event not too long ago where the CEO of one of the grocery, big California based grocery store chains, Raley’s, gave a talk and he said their company alone, they have about 230 stores along the West Coast, they lose 60 million a year due to retail theft. And he said that’s money I can’t use to lower prices.

[00:17:34] And I can’t use it to raise wages for my employees. Car break ins are off the charts in Oakland, San Francisco, because one of the things that Prop 47 did for our listeners who may not be familiar with it is that it lowered the threshold. to under 950. So, you would basically get a slap on the wrist if you stole up to 950.

[00:17:56] And you could go from one store to the next, and that’s what you’re seeing. And it really, that kind of money source is exacerbating the problems that we’re having with drugs. And that we’re having with, human trafficking. We did an interview with Jim Palmer, who until recently was the CEO of the Orange County Rescue Mission.

[00:18:16] And he said the tragedy of these measures is, for the first time, it gave those who are trapped in this dangerous lifestyle, it gave them a financial resource to fuel their lifestyle. One other point on, when we talk about Prop 57, we had a case right here in Sacramento, that was, I think, typifies it. We had an individual, Smiley Martin, who had been in state prison.

[00:18:43] He was released early, under Prop 57. And right near where I’m taping this podcast today in Sacramento, about 10 blocks away, in September 2022, he went on a mass shooting spree. He and some other accomplices, they shot 19 people and killed 6. Now later, he was found dead in jail, but he never would have been out on the street in the first place to commit these murders were it not for Prop 457.

[00:19:12] And that’s not an isolated example, there are many other examples of that. So, if you want It’s real when you walk down the street, certainly if you walk down Market Street in San Francisco, which is, when you look at a postcard of San Francisco, that’s one of the postcard issues, right? The cable car turnaround and you see the ferry building at the end of the street, you wouldn’t recognize it today if you had visited there in the past. And I would argue, and our research and I think the data shows, a lot of it is because of these sweeping policy changes.

[00:19:46] Joe Selvaggi: Indeed, I’m sure it would give our listeners from Boston a chill. We enjoy walking down our streets, not seeing the window glass that is often accompanying when people break into cars. That doesn’t happen, or at least not anymore, so I don’t think we would welcome those kinds of changes. Let’s shift our conversation to energy. Of course, California is well known for its energy. It’s love of renewable energy and its desire to curb the effects of climate change. You’ve got sunshine, you’ve got wind, gentle breezes off the sea, so I would imagine it’s a good place for renewable energy. Share with our listeners, what are the goals of your legislators to improve the use of renewable energy and what have been, let’s say, at the high level?

[00:20:23] Tim Anaya: That’s the result. Sure. Well, we’re on a major push right now to go to a 100 percent renewable energy power mix by 2045. So they don’t want any natural gas.

[00:20:37] They don’t want any traditional ways, including though nuclear, we’ve gotten a little bit of a reprieve. Out of necessity and feelings on nuclear power, which, you know, California’s had a very kind of anti-nuclear feeling among the public. Those are thawing a little bit as people come to realize that really the most cheapest and most renewable power source you could have really is renewable in a way, or is nuclear in the way we do it now.

[00:21:06] Don’t think of All the nuclear power plants of the 1970s where you had all the, all the accidents, but, so to that end, they are pushing for more solar power, more wind power, and there are a lot of consequences, of course, of those. It sounds great in practice, but there’s a reality to them. Wind power is great.

[00:21:30] But what do you do on a calm day? That’s what cheap and actually cleaner natural gas is for, right? It’s how you keep things fueled, how we today keep things running on a, on a very hot day or on a, certainly on a calm wind day. We also have issues too with, needs a lot of land. Where are you going to have that land?

[00:21:50] You can build wind along the coast, but people don’t realize in Northern California, right? You have to secure those big wind platforms. to something and the our coast goes way way way down so it’s not conducive to having these anchored off the coast in as much of the state as you would think because simply just because of the geography You also are seeing NIMBYism, which you see a lot, not in my backyardism.

[00:22:22] Yes, in the more inland parts of the state that are hotter, people are thinking, well, maybe that’s where we could put wind farms, maybe that’s where we could put solar farms. Well, residents don’t want them. And so we use our laws to block as a political hammer to block development that we don’t like. Then we have the California Environmental Quality Act, which is a running theme and complicates all kinds of building in California, including green projects like solar and wind.

[00:22:51] And remember, these that are built off the California coast, you have to go through the added hurdle of the Coastal Commission, which ironically You know, even though you’d think they’d be pursuing these types of projects, they give a hard time to these sort of renewable energy projects. So, all together, it sounds good, but you know, it’s very expensive, you would have to have production, and we’re way behind.

[00:23:16] in the building to meet these 2045 goals. So, you would have to have kind of a World War II level scale of production to come anywhere near meeting these mandates. And then you have all these other issues that you need to work through. So, it sounds great in theory, but we don’t see in reality how you’re going to meet this. And then there are other, of course, consequences of this kind of, kind of policy that I’m sure we’ll get into.

[00:23:42] Joe Selvaggi: Well, I also want to say again, when we imagine California beyond palm trees and sunshine, I think we imagine these massive highways. We here in Massachusetts or Boston, we walk everywhere, not everywhere, but we try to walk everywhere.

[00:23:54] We’ve got these small towns, small streets, California, nobody drives in LA as the song goes, right? So, there’s this push to encourage all cars to go into become electric cars. That presents its own problems because simultaneous with that, again, you’ve got an increase in cars that are electric, but not an increase in charging stations.

[00:24:13] And there’s, I think, I wrote it, read in your book, I’d never heard the term before, road diet, which is trying to reduce the number of highways. So this land of massive highways wants to have fewer highways, more electric cars, but that runs into its own problems. Share with our listeners. What do you see going on in the car world in California?

[00:24:32] Tim Anaya: Yeah, so policy makers want to have 100 percent of cars sold in California by 2035 be electric vehicles. And that’s certainly an example of a California policy that’s spreading to many other states and nationally. But as you mentioned, there are a lot of issues with that. Number one, of course, is the charging stations.

[00:24:51] We don’t have nearly the charging infrastructure that we should. It would be very expensive to build it. Electric residential, electric rate payers are paying more on their electric bills to subsidize these sorts of, of building, along with taxpayers. There are simple issues of, can the grid account for all of the increase in usage when we have 100 percent electric vehicles?

[00:25:17] We did a study a few years ago that forecasts that by 2045, we will be 21 percent short of the power we’ll need every day to run the grid. When we have a hundred percent, electric vehicle mandate in place. And that doesn’t account electric gas going from electric ovens instead of gas ovens and HVAC and all the other electrization that we’re doing here.

[00:25:41] The other issue then you have is one of fairness, right? As we’ve documented in our work, electric vehicles are essentially now kind of something for upper income people. And we’ve documented in our coverage that these lavish subsidies that state. And the federal government gives to those purchasing electric vehicles, they’re largely claimed by the wealthy.

[00:26:03] 79 percent of electric vehicle tax credits and subsidies claim by households making 100, 000 a year. Well, how can someone, a struggling Latino worker in the Central Valley who can barely afford the car they have that may not be the most energy friendly car, may not be the most pollution friendly car.

[00:26:24] Well, the answer to them is, well, just go buy an electric vehicle. You’ll save on gas and all of these things. Well, they can’t afford a 75, 000 car, right? So, there’s, there, that’s the attitude you get from policymakers on that. So, I think that it’s, it, and it’s certainly the direction we’re going. There is no stop on this. But I think the, the issue is going to be one of reality. How are we going to handle this? And I think we’re barreling toward a big mess.

[00:26:55] Joe Selvaggi: Well, to that point, I want to bring in something not in your book. I read today, there were, we can argue, well, we can tolerate, in the interest of the environment, higher energy prices. And maybe you’d be struggling to get an electric car and find a place to charge it. But more than that, it’s, you know, the grid seems to be becoming less reliable. I read in the Wall Street Journal that over the Labor Day weekend, there were parts of California that had day long blackouts. Now it’s 2024, it’s the United States of America, it’s California. Is it true you’re having blackouts?

[00:27:26] Tim Anaya: Yeah, so, um, if anybody watched the USC football game on Saturday night, they actually lost power to a good chunk of the stadium during the game, and that was due to high temperatures in that neck of the woods in Southern California this weekend. It was 109 in Pasadena on Friday and Saturday.

[00:27:48] And so, you know, yes, it is becoming a thing that’s more fact of life. The other thing, due to wildfires, right, a lot of our big, the big Napa of wildfire that your listeners may remember from a few years ago that was devastating. That was allegedly caused by power lines, by PG& E power lines. We have a huge issue going on with that, of a project to harden the electric lines and bury them underground.

[00:28:16] But one of the things power utilities do now, when there’s that kind of high wind warning, that’s the, the red flag for fire conditions, they shut power off. So, you’re seeing now, purposefully, people are going without power for two, three, four days or more because of this. But I think another important point, as we talk about this issue of electricity and we’re pushing for electric, because of all the new green mandates, we’re paying more for electricity.

[00:28:44] It’s not like we’re going to be saving going to this. We did a study a few years ago called ZAPT, and we found that Californians pay 2.5 billion 56 percent higher average electricity prices than the U. S. average, but we use, we’re actually very efficient. We use 34 percent less energy. And it’s 500 bucks a year that people pay more for electricity because of state government green mandates.

[00:29:10] So Gavin Newsom can say what he will on our energy prices that he did a few weeks ago. It’s just not the reality. So, it’s kind of a, you know, you’re seeing it all, right? Right. You’re seeing brownouts, you’re paying more, we’re having to pay more as ratepayers and taxpayers for all of this infrastructure, and then there’s the real question of, can we achieve it all? Is this going to collapse into a heaping mess? And it seems like that’s where we’re headed.

[00:29:36] Joe Selvaggi: Yes, indeed. We covered power on a recent podcast episode, and it does seem ironic that the more power we try to bring online, the more expensive everything is and the less reliable it is. It seems like we’re going backwards.

[00:29:46] I want to shift our conversation to California’s love of banning things. So, we hear about this. We like it here in Massachusetts. We banned plastic bags here in some towns. But let me quote from your book, all the things that are being banned in California. Again, this speaks to our quality-of-life questions.

[00:30:01] Banning polystyrene tape Takeout food containers, natural gas connections and new home construction, new gas stations, plastic shampoo and conditioner bottles in hotels, milk and juice cartons, condiment packages, plastic straws and utensils, and gasoline powered lawn equipment. Okay, that’s a lot. It seems like there’s just a fondness.

[00:30:21] People want these things, but they’re banned. So, I just want to come back to the plastic bags. We did a podcast saying it’s absurd to ban plastic bags because anything you use to substitute them is, is worse for the environment, meaning you’re essentially going backwards. Plastic bags are actually environmentally useful.

[00:30:39] Say more about California having second thoughts about banning plastic and perhaps maybe, you mentioned, you know, they’re softening on nuclear power. Maybe they’re softening on bans. What do you have to say about that?

[00:30:51] Tim Anaya: Well, I would say that that issue of plastic bags was a huge issue this legislative session.

[00:30:57] Because when we enacted the plastic bag ban, I think this was 2013 or 14, sometimes in there, and there was some, a little bit of reason to that, right? Because local communities had been adopting plastic bag bans, and there was some thought, well, it’s better for certainty to have a unified statewide. But the issue is, well, what was the alternative?

[00:31:19] So we went to these kinds of heavier plastic bags that are multi use bags, and you could also have paper bags, and they charge you 10 cents, 15 cents, 20 cents for these bags. Well, what they found is, well, you didn’t really cause much improvement after that. So now they’re going back and they’re saying, well, we want to ban those bags now, too.

[00:31:42] And so if you have something where I think we learned from the 1930s that prohibition didn’t really work, um, well, if the first ban didn’t work, Is the second ban really going to work? And it really goes back to, what’s all of these, right? These things are a convenience. You know, people, reasonable people will do their part.

[00:32:03] A lot of these policies, if I were to lump them together, it’s, it’s a solution in search of a problem in some ways. You have strange anecdotes about these things that aren’t reality. Is there some littering of bags? Sure, but we have anti littering laws on the books. We could enforce those laws rather than ban something that is probably more than a convenience for most shoppers.

[00:32:30] Joe Selvaggi: Yeah, indeed. Alright, so, again, that might be written off as an annoyance, so let’s talk about a more serious topic, taxes. You knew we’d get to that eventually. California is a wonderful state in that it provides Massachusetts with some sort of, we can point fingers and say, yeah, sure, our taxes are high, but California is worse.

[00:32:45] So, laid on the line, how bad is it to be an earner in California? Perhaps a high earner in California? What does the tax burden look like for Californians?

[00:32:54] Tim Anaya: So, we have the highest state sales tax rate. We have the highest state gas tax rate. We have the highest top rate. We have the sixth highest combined state and local tax burden.

[00:33:09] But then we also have the continual push for, that’s not enough, certainly, even though it produces because of our over reliance on Capital gains taxes, it produces kind of boom bust budget cycles and legislators routinely spend it all when we have a good year and they then are stuck with a huge deficit when really revenue goes to a more normal level, heaven forbid, goes to a recessionary level.

[00:33:38] And so you have the conversation in sacrament about what’s more, what can we do more, how can we need to close tax loopholes, we need to think about A wealth tax, or these issues of unrealized income, taxes on that. There have been discussions about, now I don’t believe this is constitutional, but if anyone will try it, I’m sure California will, they want to have a sliding scale, so when you leave California, they want to tax you on a sliding scale for ten years after you leave the state.

[00:34:06] So even when you’re a refugee and manage to escape California, some have been kicking around a proposal to do that. Of course, on property taxes, California led the way on Prop 13 and limiting property taxes. That’s a good thing, but there’s a continual push of Corporations are not paying their fair share, and, um, managers of commercial property and owners of commercial property are not paying their fair share, so they want to have a split role where commercial property would be taxed differently than residential property.

[00:34:39] Of course, that would be taxed property. Terrible thing for all the issues we’re having with the commercial office building market and even apartment, owners of apartment complexes, things like that. So, it is as bad as you would imagine.

[00:34:54] Joe Selvaggi: I want to change our conversation to the business climate. Of course, as our listeners know, and I often say this, government doesn’t have its own money. It has to only rely on the money someone has already made before they can tax it. So, we imagine, I think here in Massachusetts, California to be this land of opportunity, sort of the America of America, right? Where I don’t care if it was people in the gold rush going there for prospecting or even modern times, Silicon Valley bringing us all these fantastic new inventions.

[00:35:18] We imagine California is a land of opportunity where anything is possible. Entrepreneurialism ought to be alive and well. I would imagine the spirit of California. Thank you. But I’ve read in your book, recent legislation, something called EB 5, which seems to target the very spirit of entrepreneurialism, try to, in a sense, contain it. Describe for our listeners, what is it and what do you think its influence is on, on let’s say the entrepreneurial spirit that we, we cherish in, in, in America?

[00:35:44] Tim Anaya: Sure. So, AB 5 is a law that was enacted in 2019, and it really attacks. That’s the independent contractor, the independent entrepreneur, the gig worker. And the, really the goal of those who push the law and the legislators who are behind it, right, is we want you to be an employee at a company. Hopefully, a union employee, hourly or not, doesn’t matter, but basically, we know better for you that every Californian should be an employee at a company, and we think a unionized employee.

[00:36:22] And so, there is a long list of industries that were affected. If you were politically well connected, you got yourself exempted from the law. They call it a carve out. But, from Barbarology, Cosmetology, go down the list, there were so many industries where really it forced you to reinvent how you do work.

[00:36:46] Some people naturally left the state because of it. Some people had to take the time and expense to form their own LLC or their business, which is government. Yeah, they say it’s easy, but you have to pay incorporation fees and other taxes. You have a lot of tax issues with that. And so, what it really did was Being a gig worker, being an entrepreneur, it’s the way to climb the economic ladder.

[00:37:15] It’s the best way for economic empowerment and economic advancement. Also, keep in mind, this law came online just as we were going into the pandemic, so when you had people who lost their jobs, who needed to work at home, needed to do gig work to provide for their families, they couldn’t because they had to deal with the effects of this law.

[00:37:36] Now, the proponents of this law will say we’re looking out for the little guy, and we’re looking out for those who are being exploited by employers. Well, let’s look at minority communities, right? The biggest route to entrepreneurship, right, is People owning landscaping businesses and yard work. Those are issues.

[00:37:58] Yeah, you could be a one-man band in your own company, right? But you want to hire a guy to help you out for a day. That’s an issue you’ve got to think about for AB5. Truckers. People don’t realize that in shipping, A lot of the people who drive those big trucks, they’re independent contractors. In fact, they have ongoing litigation with the state over their status under AB5.

[00:38:21] Especially for people who, you don’t need a lot of education to have, do gig work, bookkeeping. Or, in our world, right, writing things. That, that was a huge issue. There was a huge hullabaloo with reporters, whether they were going to be covered. A lot of journalism now is freelance work. Photography, all these, these sorts of things.

[00:38:44] And so, the, um, when we talk about ideas that are spreading to other states, this one for sure is spreading to other states. It’s also spreading to Washington, D. C., because there’s a federal bill, the PRO Act, that hasn’t gotten through Congress, but this is one that we’re looking at this at the national level, and that is directly from Sacramento.

[00:39:07] So, it really is chilling when we know just how important entrepreneurship is for the economy, for the people. We know how important entrepreneurship is for helping to lift people out of poverty, help people climb the economic ladder, help people, so much innovation is done by small entrepreneurs. And so that law, AB5, my colleague Kerry Jackson called it perhaps the cruelest law ever enacted and it really is, and I think it really in a nutshell shows that That’s the ugly side of all the laws we’re talking about here from California, because I would argue it’s, it’s really a very punitive law and it hurts those who the proponents claim to be helping.

[00:39:52] Joe Selvaggi: Indeed, those first few rungs on the ladder of success here in America, as you mentioned, are maybe gig workers and entrepreneurs. That’s how you get from nothing to something. We can all trace our roots back to someone who took that first step. We’re getting, we’ve over, run over our time. So, I want to try to.

[00:40:07] Tie it up with a bow and bring some of our ideas together. You mentioned the relationship California has with the, the ideas that start in California sort of permeate out into the world. We’ve also mentioned the fact that people dissatisfied with California, more frankly Massachusetts for that matter, either because taxes are too high or cost of living is too high or quality of life is too low, they have the power to vote with their feet and go somewhere else where those policies aren’t embraced.

[00:40:30] You can choose which laboratory of democracy out of 50 states you want to live in. If these policies we talk about wind up either through a particular candidate or through California’s influence on the entire country, if we make the U.S. into California, what do you think will happen? Without that competition, without those other states, other viewpoints being able to, in a sense, manifest those in their own respective states, what do you see as a sort of future if, if America becomes California right.

[00:41:02] Tim Anaya: Well, I think you’re going to see certainly less prosperity, less opportunity. You’re going to see a decline in quality of life collectively. These types of policies that we’ve discussed about crime spread across the country. We didn’t get into education, but certainly education freedom is important.

[00:41:24] And future generations. May not be prepared for the workforce or to be, to meet the demands of the global economy. And so that’s why I think the book here is so important because people who are living in not just Massachusetts, but Tennessee and Kentucky and Oklahoma and Florida and around the country, right?

[00:41:47] You’re not expecting these ideas coming. You thought you fled. You thought you got away from the wildness of California. But these ideas are coming. They are inspiring policy makers across the country. Or there may be federal policies that are enacted by regulation or by statute in Congress. And so, I think this book, my hope is that, yes, you’ll be entertained, but I want you to know what it really is, what we’re dealing with here, what are the policies that you can expect, and that you have a few little nuggets of, here’s really what happened.

[00:42:25] And hopefully, we will give you the intellectual knowledge you need to push back. So, when these ideas come up in your state legislative houses, you can go to a committee hearing and say, here’s the impact from California. We don’t want that here. And so, I think a way to close certainly is that I think everyone outside California needs to be certainly wary but be mindful that these policies are spreading nationwide.

[00:42:55] It may not be tomorrow, it may not be next year, but they’re coming, and that movement is coming. Often legislation isn’t enacted at one time, it takes multiple times to get it. So, our hope is that You’ll get the Left Co Survivors Guide, you’ll learn what’s going on here, and you’ll be inspired to learn more.

[00:43:13] We have a whole website that has, you know, we didn’t want to have a dusty, boring policy book, so we have put together on our website all the other resources. So, if you want to do a deep dive on these issues, if a particular policy is coming, you have that at your fingertips as well. So, I hope you don’t all live in the wilderness, the policy wilderness, like we are in California, but I think our book here gives you the tools you need to navigate it, and hopefully put a stop to it before it takes root.

[00:43:44] Joe Selvaggi: Yes, it’s a wonderful resource. As I say to my friends, policy friends on the right and the left, maybe we don’t need to make a policy, see how bad it goes, and learn for ourselves. Maybe we can look elsewhere, and We’ve learned from other states mistakes, and I think your book is a great example of how we can potentially learn how our, the policies we imagine might be helpful actually turn out in real life.

[00:44:06] So it’s, I think, a valuable resource for policy people who are considering alternatives. So where can our listeners find your writing, your PRI, and where can they buy your California Survivors Guidebook?

[00:44:18] Tim Anaya: Sure, so we’re at Amazon and all your favorite online bookstores. It’s in both paperback and hardcover, so whichever you prefer, you can get. And if you go to leftcoastsurvivorsguide.com, that’ll give you more information on the book and the resources that I talked about that you can, that you can find. So, you can read more than what’s, what’s just in the book. And you can follow us on social media. I’m at Tim Anaya and PRI is at Pacific Research.

[00:44:46] Joe Selvaggi: Well, wonderful. Well, thank you from the right coast to the left coast. Thank you for joining me today on Hubwonk Today, Tim. You’ve been a great fund of information. Thank you.

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