California ranks as second-worst run state

After-effects of real estate bubble continue to hamper economy

By Dean Calbreath
Originally published October 12, 2010 at 6:29 p.m., updated October 13, 2010 at 11:47 a.m.

Jerry Brown and Meg Whitman are vying to control a state that was described as the worst-run state in the country in a recent survey.

California ranks only above Kentucky as the second worst-run state in the nation, according to a survey last week by 24/7 Wall Street, a website covering business and the economy.

Here are some of the state's weakest points:

The nation's third-highest unemployment rate, after Nevada and Michigan.

The second-deepest drop in housing prices, after Nevada.

The third-worst high-school graduation rate, after Mississippi and Texas.

The eighth-worst health insurance coverage, with Texas at the bottom of the list.

The worst credit rating, ranked A- by Moody's, which is just a notch over junk bond status.

The 11th-highest debt per capita. Mississippi, West Virginia and Arkansas languish at the bottom of that list.

Some of those low scores - including the jobless rate and the housing prices - are related to the state's real estate boom-and-bust, which hit the Sunbelt States particularly hard.

Some of the low scores - including graduation rates and health care - may be connected to our higher than average proportion of first-generation immigrants, who tend to have higher dropout rates and, as a result, find lower-paying jobs that may not offer healthcare.

But some of the low scores, including the low credit rating and debt per capita, are more related to the recurring budgetary problems in Sacramento. The problems range from a bloated pension system to a recessionary decline in tax revenues, which has thrown most state governments deeply into the red. (Click HERE for a recent column in The New York Times mentioning pension problems in California and other states.) The state's credit rating has been on a downhill slide for the past couple years, because of the legislature's inability to craft a workable budget on time.

In a column in The Los Angeles Times yesterday, Joe Mathews, a fellow of the New America Foundation, argued that the state's current political system is simply unworkable.

"It is an unholy mix of three irreconcilable parts: an election system designed to produce majorities; a legislative system that requires so many two-thirds votes that it nearly amounts to minority rule; and an inflexible initiative process that permits voters to create a special set of laws outside the checks and balances of legislation and budgets," Mathews said. "Though elements of these systems exist in democracies around the world, no other place is so foolish as to combine them."

In his column, Mathews focuses on the initiative process - which commits the state to paying for programs that cannot be cut back by the legislature. But the other "irreconcilable parts" deserve a look as well.

http://www.signonsandiego.com/news/2010 ... run-state/