California Dreaming No More

California used to be the dream state to live in. However, things have been changing during the past several years. There are many reasons for the shift including the high cost of living, including paying about $1 more per gallon for gasoline than in other states, "smash-and-grab" crimes that are plaguing many large cities with mobs of thieves making off with expensive goods in brazen, mostly nighttime raids, shuttered businesses as a result of the increase in crime, filthy streets, crumbling infrastructure, an increase in the homeless living on the streets, and a new zero-bail policy now in effect in counties like Los Angeles, ending the years-long standard of setting cash bail amounts for defendants commensurate with the severity of the crime they are accused of committing -- a process critics say favors the rich while doing little to protect public safety. The new policy eliminates the existing cash bail system for all but the most serious of crimes.

California has a $73 billion budget deficit. This is unsustainable. Why is it so high? One reason is the migration of citizens out of the state and related loss of income tax revenue. Another is large businesses closing or leaving the state thereby reducing the corporate tax receipts. Moreover, there are benefits being paid out to support undocumented immigrants so that they can have free health care and reduced college tuition in the states’ community colleges and state universities if certain conditions are met.

California is a leader within the nation in supporting undocumented immigrants in their path to obtain a college degree. If an undocumented person is considered a “non-resident” student in CA looking to go to college or access higher education, they will pay much higher tuition fees than resident students. However, California has a set of laws that can provide them with in-state tuition and state-based financial aid, if they meet the eligibility requirements.

At California colleges and public universities, the amount of tuition undocumented immigrants pay is decided by the schools. They determine your “California residency for tuition purposes” based on your legal presence in the state, continuous physical presence for more than one year and intent and ability to stay in California indefinitely. This does not refer to their U.S. citizenship, permanent residency status, or lack thereof.

If they are considered a non-resident for tuition purposes, they will pay approximately three times more than a resident student. However, if they are eligible, they can submit a non-resident tuition waiver, and get their fees reduced.

The new contributing factor that explains the higher cost of living is that fast food workers in the state now get a minimum wage increase of $20 per hour. The new law applies to national food chains and franchises with at least 60 locations — but wage increase exceptions are applied.

In a news conference last year, Governor Newsom spoke with reporters about a loophole rule that exempted fast food restaurants from the minimum wage increase so long as they sold bread that was made in-house. When asked about the bakery exception by KCRA, Newsom said, “That’s part of the sausage-making.”

Newsom was recently lambasted after Bloomberg reported that Bay Area billionaire Greg Flynn, who owns two dozen Panera Bread franchises around California, would not be affected by the minimum wage increase. Bloomberg suggested that Flynn’s Newsom campaign donations may have helped him get excused from the new law.

California has become a nanny state. Unless it reverses the policies discussed in this blog, we will continue to see an exodus often of high technology companies and well-educated workers, both of which are the backbone of a strong economy and sound fiscal foundation. It’s no longer accurate to describe one’s living preference as “California Dreaming.”

Posted by Steven Mintz, Ph.D., aka Ethics Sage, on April 15, 2024. You can sign up for his newsletter and learn more about his activities at: https://www.stevenmintzethics.com/.